An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

FedEx Corp., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

	May 31, 2020	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015
Total undiscounted future operating lease payments	—	18,115	18,102	17,874	17,813	16,385
Discount rate¹	—	3.50%	3.60%	3.60%	3.75%	4.44%

Total present value of future operating lease payments	—	15,238	15,142	14,974	14,789	13,115

Based on: 10-K (filing date: 2020-07-20), 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).

¹ Weighted-average interest rate for FedEx Corp.’s debt

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.50%
2020	2,497	2020	2,497	2,413
2021	2,263	2021	2,263	2,113
2022	2,028	2022	2,028	1,829
2023	1,779	2023	1,779	1,550
2024	1,486	2024	1,486	1,251
2025 and thereafter	8,062	2025	1,486	1,209
		2026	1,486	1,168
		2027	1,486	1,128
		2028	1,486	1,090
		2029	1,486	1,053
		2030	632	433
Total:	18,115		18,115	15,238

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

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.60%
2019	2,471	2019	2,471	2,385
2020	2,177	2020	2,177	2,028
2021	1,951	2021	1,951	1,755
2022	1,762	2022	1,762	1,530
2023	1,548	2023	1,548	1,297
2024 and thereafter	8,193	2024	1,548	1,252
		2025	1,548	1,209
		2026	1,548	1,167
		2027	1,548	1,126
		2028	1,548	1,087
		2029	453	307
Total:	18,102		18,102	15,142

Based on: 10-K (filing date: 2018-07-16).

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.60%
2018	2,445	2018	2,445	2,360
2019	2,230	2019	2,230	2,078
2020	1,931	2020	1,931	1,737
2021	1,709	2021	1,709	1,484
2022	1,540	2022	1,540	1,290
2023 and thereafter	8,019	2023	1,540	1,246
		2024	1,540	1,202
		2025	1,540	1,160
		2026	1,540	1,120
		2027	1,540	1,081
		2028	319	216
Total:	17,874		17,874	14,974

Based on: 10-K (filing date: 2017-07-17).

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 3.75%
2017	2,475	2017	2,475	2,386
2018	2,243	2018	2,243	2,084
2019	1,953	2019	1,953	1,749
2020	1,668	2020	1,668	1,440
2021	1,451	2021	1,451	1,207
2022 and thereafter	8,023	2022	1,451	1,163
		2023	1,451	1,121
		2024	1,451	1,081
		2025	1,451	1,042
		2026	1,451	1,004
		2027	768	512
Total:	17,813		17,813	14,789

Based on: 10-K (filing date: 2016-07-18).

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.44%
2016	2,128	2016	2,128	2,038
2017	2,241	2017	2,241	2,055
2018	1,751	2018	1,751	1,537
2019	1,511	2019	1,511	1,270
2020	1,265	2020	1,265	1,018
2021 and thereafter	7,489	2021	1,265	975
		2022	1,265	933
		2023	1,265	894
		2024	1,265	856
		2025	1,265	819
		2026	1,164	722
Total:	16,385		16,385	13,115

Based on: 10-K (filing date: 2015-07-14).

FedEx Corp., adjustments to financial statements

US$ in millions

	May 31, 2020	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015
Adjustment to Total Assets
Total assets (as reported)	73,537	54,403	52,330	48,552	46,064	37,069
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—	15,238	15,142	14,974	14,789	13,115
Total assets (adjusted)	73,537	69,641	67,472	63,526	60,853	50,184
Adjustment to Total Debt
Total debt (as reported)	22,003	17,581	16,585	14,931	13,867	7,268
Add: Operating lease liability (before adoption of FASB Topic 842)²	—	15,238	15,142	14,974	14,789	13,115
Add: Current portion of operating lease liabilities	1,923	—	—	—	—	—
Add: Operating lease liabilities, less current portion	12,195	—	—	—	—	—
Total debt (adjusted)	36,121	32,819	31,727	29,905	28,656	20,383

Based on: 10-K (filing date: 2020-07-20), 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).

^{1, 2} Equal to total present value of future operating lease payments.

FedEx Corp., Financial Data: Reported vs. Adjusted

FedEx Corp., adjusted financial ratios

	May 31, 2020	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015
Total Asset Turnover¹
Reported total asset turnover	0.94	1.28	1.25	1.24	1.09	1.28
Adjusted total asset turnover	0.94	1.00	0.97	0.95	0.83	0.95
Debt to Equity²
Reported debt to equity	1.20	0.99	0.85	0.93	1.01	0.48
Adjusted debt to equity	1.97	1.85	1.63	1.86	2.08	1.36
Return on Assets³ (ROA)
Reported ROA	1.75%	0.99%	8.74%	6.17%	3.95%	2.83%
Adjusted ROA	1.75%	0.78%	6.78%	4.72%	2.99%	2.09%

Based on: 10-K (filing date: 2020-07-20), 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).

¹ See details »

² See details »

³ See details »

Financial 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 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	FedEx Corp.’s adjusted debt to equity ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	FedEx Corp.’s adjusted ROA deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

FedEx Corp., Financial Ratios: Reported vs. Adjusted

	May 31, 2020	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenue	69,217	69,693	65,450	60,319	50,365	47,453
Total assets	73,537	54,403	52,330	48,552	46,064	37,069
Activity Ratio
Total asset turnover¹	0.94	1.28	1.25	1.24	1.09	1.28
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Revenue	69,217	69,693	65,450	60,319	50,365	47,453
Adjusted total assets	73,537	69,641	67,472	63,526	60,853	50,184
Activity Ratio
Adjusted total asset turnover²	0.94	1.00	0.97	0.95	0.83	0.95

Based on: 10-K (filing date: 2020-07-20), 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).

2020 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 69,217 ÷ 73,537 = 0.94

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 69,217 ÷ 73,537 = 0.94

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 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

	May 31, 2020	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total debt	22,003	17,581	16,585	14,931	13,867	7,268
Common stockholders’ investment	18,295	17,757	19,416	16,073	13,784	14,993
Solvency Ratio
Debt to equity¹	1.20	0.99	0.85	0.93	1.01	0.48
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt	36,121	32,819	31,727	29,905	28,656	20,383
Common stockholders’ investment	18,295	17,757	19,416	16,073	13,784	14,993
Solvency Ratio
Adjusted debt to equity²	1.97	1.85	1.63	1.86	2.08	1.36

Based on: 10-K (filing date: 2020-07-20), 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).

2020 Calculations

¹ Debt to equity = Total debt ÷ Common stockholders’ investment
= 22,003 ÷ 18,295 = 1.20

² Adjusted debt to equity = Adjusted total debt ÷ Common stockholders’ investment
= 36,121 ÷ 18,295 = 1.97

Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	FedEx Corp.’s adjusted debt-to-equity ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

	May 31, 2020	May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income	1,286	540	4,572	2,997	1,820	1,050
Total assets	73,537	54,403	52,330	48,552	46,064	37,069
Profitability Ratio
ROA¹	1.75%	0.99%	8.74%	6.17%	3.95%	2.83%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income	1,286	540	4,572	2,997	1,820	1,050
Adjusted total assets	73,537	69,641	67,472	63,526	60,853	50,184
Profitability Ratio
Adjusted ROA²	1.75%	0.78%	6.78%	4.72%	2.99%	2.09%

Based on: 10-K (filing date: 2020-07-20), 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).

2020 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 1,286 ÷ 73,537 = 1.75%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 1,286 ÷ 73,537 = 1.75%

Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	FedEx Corp.’s adjusted ROA deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

FedEx Corp. (NYSE:FDX)

Analysis of Operating Leases

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Adjustments to Financial Statements for Operating Leases

FedEx Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

FedEx Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)