FedEx Corp. (NYSE:FDX)

Current Provision

The current provision for income taxes exhibits a generally increasing trend from May 31, 2020, through May 31, 2024, starting at 35 million US dollars and rising to 1,667 million US dollars. There is a notable sharp increase between May 31, 2020, and May 31, 2021, where the provision increased by over 600 million US dollars. After peaking in 2024, the current provision decreases slightly in 2025 to 1,396 million US dollars, indicating a possible moderation in current tax liabilities.

Deferred Provision (Benefit)

The deferred provision initially shows substantial positive values, indicating deferred tax expense, increasing from 348 million US dollars in 2020 to a peak of 802 million US dollars in 2021, then declining to 322 million in 2022 before rising slightly to 446 million in 2023. However, from 2024 onward, there is a significant shift as these figures turn negative, with -162 million US dollars in 2024 and -47 million in 2025, suggesting the recognition of deferred tax benefits during these years rather than expenses.

Provision for Income Taxes

The overall provision for income taxes reflects the combined effect of current and deferred provisions. It escalates notably from 383 million US dollars in 2020 to a peak of 1,443 million US dollars in 2021, then declines to 1,070 million US dollars in 2022. This is followed by an upward trend, reaching 1,505 million US dollars in 2024 before decreasing slightly to 1,349 million US dollars in 2025. The fluctuations in this total provision closely mirror the changes in both current and deferred provisions but are moderated by the offsetting deferred tax benefits in the later years.

Summary and Insights

The data indicates that the company experienced a substantial increase in current income tax liabilities over the five-year period, peaking in 2024. Deferred tax expenses were initially positive and considerable but reversed to benefits in the last two years, which helped to moderate the overall tax provision. This shift from deferred tax expense to benefit may be related to timing differences, tax planning strategies, or changes in tax regulations impacting the company's deferred tax assets and liabilities. The overall pattern suggests that while current tax obligations remain high, the company has recorded deferred benefits that partially offset these liabilities in the most recent years analyzed.

The statutory federal income tax rate remained constant at 21% throughout the analyzed periods, indicating no changes in the legislated tax obligations at the federal level.

The effective tax rate exhibited notable fluctuations over the years. In the fiscal year ending May 31, 2020, the effective tax rate was slightly higher than the statutory rate at 23%. It then decreased to 21.6% in 2021 and rose marginally to 21.9% in 2022, staying close to the statutory baseline.

From 2023 onward, the effective tax rate increased more significantly, reaching 25.9% in 2023 and then remaining elevated at 25.8% in 2024, before slightly decreasing to 24.8% in 2025. This pattern suggests an increased tax burden relative to prior years, which could be attributed to factors such as changes in the composition of taxable income, differences in the utilization of tax credits or deductions, or shifts in jurisdictional tax effects.

Overall, while the statutory tax rate remained stable, the effective rate's upward trend in recent years points toward increasing tax expenses relative to pre-tax earnings, potentially impacting net profitability and cash flow available for reinvestment or shareholder distributions.

Property, Equipment, Leases, and Intangibles

The gross value of property, equipment, leases, and intangibles increased steadily from 3,819 million USD in 2020 to 4,608 million USD in 2023. However, it slightly declined in the following years, reaching 4,515 million USD by 2025. Accumulated amortization and depreciation for these assets consistently grew from -8,745 million USD in 2020 to -10,965 million USD in 2023, before experiencing a reduction to -10,434 million USD in 2025. This pattern indicates initial growth in asset acquisition followed by modest depreciation adjustments or disposals in later years.

Employee Benefits

The gross employee benefits decreased significantly from 1,448 million USD in 2020 to 725 million USD in 2025, showing a consistent downward trend. Corresponding amortization or liability entries for employee benefits only began appearing in 2024 and increased negatively from -68 million USD to -291 million USD in 2025. This suggests a reduction in outstanding employee benefit obligations or a modified accounting treatment towards the end of the period.

Self-Insurance Accruals

Self-insurance accruals steadily increased from 647 million USD in 2020 to 1,247 million USD in 2025, reflecting a rising provision for self-insured risks. This consistent upward movement over the years indicates a growing recognition of liabilities related to insurance accruals.

Other Items

The other assets fluctuated modestly, starting at 579 million USD in 2020, dipping to 454 million USD by 2023, and rising again to 591 million USD in 2025. The related liabilities identified as 'other' showed significant volatility with values ranging from -375 million USD in 2020 to -42 million USD in 2025, with interim sharp fluctuations. This variability may suggest episodic adjustments or reclassifications within this category.

Net Operating Loss and Credit Carryforwards

Net operating loss and credit carryforwards demonstrated fluctuations, starting at 1,262 million USD in 2020, decreasing to 934 million USD in 2021, and subsequently increasing to 1,306 million USD by 2024 before falling to 1,123 million USD in 2025. This pattern reflects variability in the company's tax loss and credit positions over the examined timeframe.

Deferred Tax Assets and Valuation Allowances

Gross deferred tax assets maintained a stable trend, ranging between 7,555 million USD in 2020 and peaking at 8,391 million USD in 2024, before a slight decline to 8,201 million USD in 2025. Valuation allowances against deferred tax assets increased in magnitude from -450 million USD in 2020 to -537 million USD in 2024, with a minor decrease to -523 million USD in 2025, indicating a cautious stance on realizability risks of deferred tax assets.

Net Deferred Tax Assets (Liabilities)

Deferred tax liabilities mirrored the trends in accumulated amortization and other liabilities, increasing from -9,120 million USD in 2020 to a high of -11,027 million USD in 2023, then slightly decreasing to -10,767 million USD in 2025. Consequently, the net deferred tax assets (liabilities) showed an increasing net liability position changing from -1,815 million USD in 2020 to -3,326 million USD in 2023, with a gradual reduction to -3,089 million USD by 2025. This trend suggests growing deferred tax liabilities outweighing deferred tax assets, which could have implications for future tax payments and financial planning.

Noncurrent deferred tax assets

The value of noncurrent deferred tax assets shows variability over the period under review. It initially increased from 1347 million USD in 2020 to 1418 million USD in 2021, indicating a rise in recognized deferred tax assets. However, thereafter, it demonstrates a declining trend until 2023, dropping to 1163 million USD. This decrease may imply a reduction in deductible temporary differences or adjustments in tax planning strategies. The value later rises to 1313 million USD in 2024 but falls again to 1116 million USD in 2025, marking an overall downward movement in the later years of the period analyzed.

Noncurrent deferred tax liabilities

The noncurrent deferred tax liabilities display a general upward trend from 3162 million USD in 2020 to a peak of 4489 million USD in 2023. This increase suggests growing obligations related to taxable temporary differences or future tax payments. After reaching this peak, the liabilities decrease slightly to 4482 million USD in 2024 and further to 4205 million USD in 2025, indicating a modest reversal but remaining substantially higher than the initial figures from 2020. This pattern may reflect changes in tax regulations, asset revaluations, or other adjustments affecting long-term tax liabilities.

Overall observation

The contrasting trends between the deferred tax assets and liabilities suggest that while the company’s future deductible items have fluctuated and generally decreased, its future taxable obligations have increased over the period, especially until 2023 before a slight reduction. This divergence could impact the company’s net deferred tax position and reflects the dynamic nature of its tax-related accounting estimates and obligations.

Total Assets

Reported total assets show a consistent upward trend from 73,537 million US dollars in May 2020 to approximately 87,627 million US dollars in May 2025, indicating a steady growth in asset base over the six-year period. Adjusted total assets follow a similar pattern, increasing from 72,190 million to 86,511 million US dollars in the same timeframe, with adjusted values slightly lower than reported values each year, reflecting adjustments primarily related to income tax considerations.

Total Liabilities

Reported total liabilities increased from 55,242 million US dollars in May 2020 to a peak of 61,055 million in May 2022 and 2023, before declining to 59,553 million in May 2025. Adjusted total liabilities mirror this pattern but remain consistently lower than the reported figures, moving from 52,080 million in 2020 to 55,348 million in 2025, showing a relative stabilization and a slight reduction after 2022.

Common Stockholders’ Investment

Reported common stockholders’ investment increased steadily from 18,295 million US dollars in May 2020 to 28,074 million in May 2025. The adjusted common stockholders’ investment figures are consistently higher, starting at 20,110 million and rising to 31,163 million over the same period. This upward trajectory suggests ongoing capital accumulation and retained earnings growth, supported by adjustments that enhance equity positions.

Net Income

Reported net income exhibits significant volatility. It surged sharply from 1,286 million in May 2020 to 5,231 million in May 2021, then declined to 4,092 million by May 2025. Adjusted net income follows the same trend but with higher absolute values, starting at 1,634 million and peaking at 6,033 million in 2021 before gradually decreasing to 4,045 million in 2025. The peak in 2021 could be attributable to extraordinary items or tax effects that, when adjusted, illustrate a more favorable profitability profile. Subsequent declines may indicate normalization of earnings or market conditions affecting profitability.

Overall Observations

The financial data reveal a company experiencing steady growth in its asset and equity base over the six years, with liabilities stabilizing after initial increases. Adjustments for deferred income taxes and similar effects generally increase equity and net income figures while reducing liabilities and total assets marginally. The net income volatility, highlighted by the peak in 2021 and a downward trend thereafter, deserves further scrutiny to understand underlying drivers such as market conditions, operational changes, or accounting treatments. The adjusted figures provide a clearer view of financial health by mitigating distortions from tax timing differences and other adjustments.

Net Profit Margin

The reported net profit margin showed a significant increase from 1.86% in 2020 to a peak of 6.23% in 2021, followed by a decline in subsequent years, stabilizing around 4.65% by 2025. The adjusted net profit margin mirrored this trend but consistently presented slightly higher values than reported, peaking at 7.19% in 2021 and declining thereafter to 4.6% in 2025. This suggests that adjustments for deferred income tax positively impacted margin metrics, particularly during peak performance years.

Total Asset Turnover

The reported total asset turnover ratio improved steadily from 0.94 in 2020 to a high of 1.09 in 2022, followed by a slight decreasing trend, ending at 1.00 in 2025. The adjusted figures were consistently marginally higher than the reported ones, rising from 0.96 in 2020 to 1.10 in 2022 and then declining gradually to 1.02 by 2025. The data indicates an overall efficiency improvement in asset utilization up to 2022, with a mild reduction afterward.

Financial Leverage

Reported financial leverage decreased steadily from 4.02 in 2020 to 3.12 in 2025, indicating a reduction in the use of debt or equity financing relative to assets. Adjusted leverage figures also declined from 3.59 to 2.78 over the same period, showing a similar downward trend with consistently lower leverage ratios than reported values. This pattern suggests a conservative approach towards leveraging over time, potentially reducing financial risk.

Return on Equity (ROE)

Reported ROE experienced a sharp rise from 7.03% in 2020 to 21.64% in 2021, followed by a decline and stabilization around 14.58% by 2025. Adjusted ROE followed a comparable pattern but was slightly higher than reported in early years, peaking at 22.61% in 2021 before declining to 12.98% in 2025. The substantial spike in 2021 indicates a period of enhanced profitability and capital efficiency, with a subsequent normalization over time.

Return on Assets (ROA)

The reported ROA increased from 1.75% in 2020 to 6.32% in 2021, then reduced and stabilized near 4.67% by 2025. Adjusted ROA showed a similar trajectory but consistently higher values, ranging from 2.26% in 2020 to a peak of 7.42% in 2021, descending to 4.68% in 2025. This confirms improved asset profitability with adjustments considered, particularly in peak years.

Overall Observations

Across all metrics, the year 2021 stands out with peak profitability and efficiency indicators, reflecting a notably strong performance. Since then, measures of profitability and efficiency have generally declined but remain above 2020 levels. The adjusted data consistently show improved performance over reported figures, highlighting the impact of tax adjustments on financial results. Leverage trends indicate a strategic reduction in reliance on debt or equity financing, which could reflect a focus on strengthening the balance sheet. Asset turnover and profitability ratios suggest some normalization after the 2021 spike, implying stabilization in operational performance.

Reported Net Income

The reported net income exhibits substantial volatility over the examined period. Beginning at $1,286 million in 2020, it sharply increased to a peak of $5,231 million in 2021. Subsequently, it declined to $3,826 million in 2022 and showed moderate increases and decreases in the following years, reaching $4,092 million by 2025. This pattern suggests a significant spike in 2021 followed by a stabilization phase with some fluctuations.

Adjusted Net Income

Adjusted net income follows a trend similar to reported net income, starting from $1,634 million in 2020. It peaked at $6,033 million in 2021, higher than the reported figure for the same year. Following 2021, adjusted net income decreased to $4,148 million in 2022 and then exhibited relatively minor fluctuations, ending at $4,045 million in 2025. The adjusted figures generally exceed the reported values, indicating material effects from income tax adjustments.

Reported Net Profit Margin

The reported net profit margin reflects a similar trend to net income values, starting at 1.86% in 2020 and sharply increasing to 6.23% in 2021, the highest margin recorded. Thereafter, it declined to 4.09% in 2022, followed by a gradual increase to 4.94% in 2024, and a slight decrease to 4.65% in 2025. This indicates fluctuating profitability with a peak in 2021 that was not sustained in subsequent years.

Adjusted Net Profit Margin

The adjusted net profit margin begins at 2.36% in 2020 and rises to its highest level of 7.19% in 2021, surpassing the reported margin by a notable margin. Afterward, it decreases to 4.44% in 2022. It experiences a modest recovery to 4.9% in 2023, then slightly declines to 4.75% and 4.6% in 2024 and 2025 respectively. These adjusted margins indicate that tax-related adjustments contribute positively to reported profitability, with the most substantial effects evident in the peak year of 2021.

Overall Observations

Both reported and adjusted net income and net profit margins peaked sharply in 2021. This suggests an extraordinary event or favorable market conditions in 2021 that significantly boosted profitability. Subsequently, both metrics decreased, reflecting either normalization of operations or less favorable economic conditions. Adjusted figures consistently present higher profitability measures than reported, demonstrating the impact of deferred income tax adjustments. From 2022 onward, profitability metrics exhibit more stability, with moderate fluctuations but no return to the peak levels of 2021.

The analysis of the financial data over the six-year period reveals several notable trends regarding the total assets and asset turnover ratios.

Total Assets (Reported and Adjusted)

Reported total assets consistently increased from 73,537 million US dollars in 2020 to a peak of 87,143 million US dollars in 2023. Subsequently, the reported assets slightly declined to 87,007 million in 2024 before a marginal rise to 87,627 million in 2025. Adjusted total assets followed a similar upward pattern, increasing from 72,190 million in 2020 to a high of 85,980 million in 2023, then experiencing a modest decrease to 85,694 million in 2024 and a slight recovery to 86,511 million in 2025. This pattern indicates steady growth in the asset base through 2023 with a stabilization phase and minor fluctuations thereafter.

Total Asset Turnover Ratios (Reported and Adjusted)

Reported total asset turnover showed an upward trend from 0.94 in 2020, peaking at 1.09 in 2022, followed by a decrease to 1.03 in 2023 and a gradual decline to 1.01 in 2024 and 1.00 in 2025. Adjusted total asset turnover presented a closely aligned trajectory, increasing from 0.96 in 2020 to 1.10 in 2022, then decreasing to 1.05 in 2023 and further declining to 1.02 in 2024 and 2025. Despite the slight downturn post-2022, the asset turnover ratios remained above the initial 2020 levels, implying efficient utilization of assets overall but with a reduction in turnover effectiveness after reaching the peak.

In summary, the data indicates a period of asset growth paired with improving asset utilization efficiency up until 2022. After this peak, asset growth plateaued with minor corrections, and asset turnover ratios experienced gradual decreases, suggesting a modest decline in the efficiency of using assets to generate revenue in the most recent years analyzed.

The financial data over the six-year period reveals several notable trends concerning the company's assets, equity, and financial leverage.

Total Assets

Both reported and adjusted total assets exhibit a steady increase from May 31, 2020, through May 31, 2023, reaching peaks of US$87,143 million and US$85,980 million respectively. However, in the subsequent two years, total assets slightly decline or plateau, with reported total assets decreasing marginally to US$87,007 million and then slightly rising to US$87,627 million, while adjusted total assets show a minor decline to US$85,694 million followed by a modest increase to US$86,511 million. This pattern indicates a relatively stable asset base with limited expansion in the most recent years.

Common Stockholders’ Investment

There is a consistent upward trajectory in both reported and adjusted common stockholders' investment throughout the entire period. Reported common stockholders’ investment grows from US$18,295 million in 2020 to US$28,074 million in 2025. Adjusted common stockholders’ investment demonstrates a similar pattern, increasing from US$20,110 million to US$31,163 million over the same timeframe. The increase in adjusted figures surpasses that of the reported ones each year, suggesting the adjustments likely recognize additional equity components or corrections enhancing shareholders’ equity representation.

Financial Leverage Ratios

Financial leverage ratios (total assets divided by common stockholders’ investment) show a clear downward trend from 2020 to 2025, both in reported and adjusted terms. The reported financial leverage ratio declines from 4.02 in 2020 to 3.12 in 2025, while the adjusted financial leverage ratio decreases from 3.59 to 2.78 during the same period. This reduction in leverage indicates an improvement in the equity proportion relative to total assets, reflecting either reduced reliance on debt or increased equity capitalization, enhancing the company’s financial stability and potentially lowering financial risk.

Overall, the data suggest a period of asset growth followed by stabilization, accompanied by steadily increasing equity levels and a decreasing trend in financial leverage. The adjustments to the reported figures consistently produce higher equity values and lower leverage ratios, indicating a conservative interpretation of the financial position when deferred tax effects and other adjustments are considered. This pattern underscores improving financial strength and a cautiously managed capital structure over the analyzed timeframe.

Reported Net Income

The reported net income showed a strong increase from 2020 to 2021, rising sharply from $1,286 million to $5,231 million. Following this peak, it declined to $3,826 million in 2022, then exhibited a mild upward trend in the subsequent years, reaching $4,331 million in 2024 before a slight dip to $4,092 million in 2025.

Adjusted Net Income

The adjusted net income followed a similar pattern to the reported figures, with a substantial rise from $1,634 million in 2020 to $6,033 million in 2021. Afterward, it decreased to $4,148 million in 2022, increased modestly in 2023 to $4,418 million, but then declined gradually over the next two years to $4,169 million in 2024 and $4,045 million in 2025. Overall, the adjusted net income maintained a more consistent decline post-2021 compared to the reported net income.

Reported Common Stockholders’ Investment

This metric showed steady growth across the entire period, increasing from $18,295 million in 2020 to $28,074 million in 2025. This consistent upward trajectory suggests ongoing capital accumulation or retained earnings reinvestment by the company.

Adjusted Common Stockholders’ Investment

The adjusted stockholders’ investment also rose steadily, from $20,110 million in 2020 to $31,163 million in 2025. This increase was proportionally larger than the reported figures, indicating adjustments have led to higher equity base figures throughout the period.

Reported Return on Equity (ROE)

The reported ROE exhibited significant variability, peaking at 21.64% in 2021 after rising from 7.03% in 2020. Thereafter, it declined to approximately 15%–16% in the subsequent years, finishing at 14.58% in 2025. Despite this decrease, the ROE remained at a moderate and relatively stable level after the peak year.

Adjusted Return on Equity (ROE)

The adjusted ROE mirrored the reported ROE's general trend but at slightly different levels. It peaked at 22.61% in 2021 after starting at 8.13% in 2020. There was a gradual decline thereafter, falling to 12.98% in 2025. The adjusted ROE showed a somewhat more pronounced downward trend post-2021 compared to the reported ROE.

Overall Analysis

The company's financial performance demonstrated a notable surge in profitability in fiscal year 2021, as evidenced by both reported and adjusted net income and ROE metrics. Following this surge, a reversion to lower but relatively stable profit levels is observed through 2025. Equity levels consistently increased during the analyzed period, reflecting potential reinvestment strategies or capital retention. The adjusted figures generally presented higher equity values but lower ROE outcomes towards the end of the period, implying the adjustments may be moderating returns when accounting for tax-related factors. The trends suggest the company experienced a peak profitability year in 2021, with subsequent years marked by steady equity growth and more moderate profitability ratios.

Net Income Trends

The reported net income demonstrates substantial volatility throughout the periods, peaking notably in the year ending May 31, 2021, at 5,231 million US dollars, followed by a decline to 3,826 million in 2022. Subsequently, it shows moderate increases in the years 2023 and 2024, reaching 4,331 million, before a slight decrease to 4,092 million in 2025. The adjusted net income follows a similar pattern but tends to be consistently higher than the reported figures, indicating the impact of adjustments such as deferred taxes. The highest adjusted net income was also recorded in 2021 at 6,033 million, with a gradual reduction thereafter, leveling off near 4,000 million in the last period.

Total Assets Evolution

Both reported and adjusted total assets exhibit a steady upward trend over the six-year span. Reported total assets increased from 73,537 million US dollars in 2020 to 87,627 million in 2025. Adjusted total assets are slightly lower than reported figures in all periods but show a parallel growth trajectory, moving from 72,190 million to 86,511 million over the same timeframe. The incremental asset growth appears stable, without sharp fluctuations, suggesting consistent asset base expansion.

Return on Assets (ROA) Patterns

The reported ROA shows significant improvement from 1.75% in 2020 to a peak of 6.32% in 2021, followed by a gradual decrease to 4.67% by 2025. The adjusted ROA reflects a similar pattern but at consistently higher percentages than the reported ROA, starting at 2.26% in 2020 and peaking at 7.42% in 2021. After the peak, adjusted ROA trends downward more gradually, ending closely aligned with the reported ROA at 4.68% in 2025. This disparity between reported and adjusted ROA suggests that adjustments related to income taxes positively influence profitability metrics before normalization over time.

Overall Analysis

The data reveals a peak performance year in 2021 across net income and ROA metrics, followed by moderation in subsequent years. The adjustments applied consistently enhance net income and ROA, indicating the significance of deferred tax impacts in financial reporting. Asset growth remains steady without volatility, underpinning stable operational scale. The convergence of reported and adjusted profitability ratios towards the later years suggests stabilizing financial adjustments and potentially consistent tax accounting treatment moving forward.