Paying users zone. Data is covered by hidden.

  • Get to FedEx Corp. for $15.99, or

  • get to whole website for at least 3 months from $49.99.

Microsoft Excel LibreOffice Calc


Analysis of Property, Plant and Equipment

Difficulty: Advanced


Property, Plant and Equipment Accounting Policy

Expenditures for major additions, improvements and flight equipment modifications are capitalized when such costs are determined to extend the useful life of the asset or are part of the cost of acquiring the asset. Expenditures for equipment overhaul costs of engines or airframes prior to their operational use are capitalized as part of the cost of such assets as they are costs required to ready the asset for its intended use. Maintenance and repairs costs are charged to expense as incurred, except for certain aircraft engine maintenance costs incurred under third-party service agreements. These agreements result in costs being expensed based on cycles or hours flown and are subject to annual escalation. These service contracts transfer risk to third-party service providers and generally fix the amount FedEx pays for maintenance to the service provider as a rate per cycle or flight hour, in exchange for maintenance and repairs under a predefined maintenance program. FedEx capitalizes certain direct internal and external costs associated with the development of internal-use software. Gains and losses on sales of property used in operations are classified within operating expenses and historically have been nominal.

For financial reporting purposes, FedEx records depreciation and amortization of property and equipment on a straight-line basis over the asset's service life or related lease term, if shorter. For income tax purposes, depreciation is computed using accelerated methods when applicable.

The depreciable lives and net book value of FedEx's property and equipment are as follows (dollars in millions):

Range
Wide-body aircraft and related equipment 15 to 30 years
Narrow-body and feeder aircraft and related equipment 5 to 18 years
Package handling and ground support equipmen 3 to 30 years
Information technology 2 to 10 years
Vehicle 3 to 15 years
Facilities and othe 2 to 40 years

Substantially all property and equipment have no material residual values. The majority of aircraft costs are depreciated on a straight-line basis over 15 to 30 years. FedEx periodically evaluates the estimated service lives and residual values used to depreciate the property and equipment.

Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations, was $3.1 billion in 2018, $2.9 billion in 2017 and $2.6 billion in 2016. Depreciation and amortization expense includes amortization of assets under capital lease.

Source: FedEx Corp., Annual Report


Property, Plant and Equipment Disclosure

FedEx Corp., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions

Microsoft Excel LibreOffice Calc
May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
Aircraft and related equipment hidden hidden hidden hidden hidden hidden
Package handling and ground support equipment hidden hidden hidden hidden hidden hidden
Information technology hidden hidden hidden hidden hidden hidden
Vehicles hidden hidden hidden hidden hidden hidden
Facilities and other hidden hidden hidden hidden hidden hidden
Property and equipment, at cost hidden hidden hidden hidden hidden hidden
Accumulated depreciation and amortization hidden hidden hidden hidden hidden hidden
Net property and equipment hidden hidden hidden hidden hidden hidden

Source: Based on data from FedEx Corp. Annual Reports

Item Description The company
Property and equipment, at cost Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation. FedEx Corp.'s property and equipment, at cost increased from 2016 to 2017 and from 2017 to 2018.
Net property and equipment Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment. FedEx Corp.'s net property and equipment increased from 2016 to 2017 and from 2017 to 2018.

Property, Plant and Equipment Ratios (Summary)

FedEx Corp., Property, Plant and Equipment Ratios

Microsoft Excel LibreOffice Calc
May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
Average age hidden% hidden% hidden% hidden% hidden% hidden%
Estimated total useful life (years) hidden hidden hidden hidden hidden hidden
Estimated age, time elapsed since purchase (years) hidden hidden hidden hidden hidden hidden
Estimated remaining life (years) hidden hidden hidden hidden hidden hidden
Ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient. FedEx Corp.'s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018.
Estimated total useful life Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors. FedEx Corp.'s estimated total useful life of depreciable property, plant and equipment declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.
Estimated time elapsed since purchase The approximate age in years of a company's fixed assets. Useful for comparison purposes. FedEx Corp.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.
Estimated remaining life FedEx Corp.'s estimated remaining life of depreciable property, plant and equipment declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

Average Age

Microsoft Excel LibreOffice Calc
May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization hidden hidden hidden hidden hidden hidden
Property and equipment, at cost hidden hidden hidden hidden hidden hidden
Ratio
Average age1 hidden% hidden% hidden% hidden% hidden% hidden%

2018 Calculations

1 Average age = 100 × Accumulated depreciation and amortization ÷ Property and equipment, at cost
= 100 × hidden ÷ hidden = hidden%

Ratio Description The company
Average age As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient. FedEx Corp.'s average age of depreciable property, plant and equipment deteriorated from 2016 to 2017 and from 2017 to 2018.

Estimated Total Useful Life

Microsoft Excel LibreOffice Calc
May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
Selected Financial Data (USD $ in millions)
Property and equipment, at cost hidden hidden hidden hidden hidden hidden
Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations hidden hidden hidden hidden hidden hidden
Ratio
Estimated total useful life (years)1 hidden hidden hidden hidden hidden hidden

2018 Calculations

1 Estimated total useful life (years) = Property and equipment, at cost ÷ Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations
= hidden ÷ hidden = hidden

Ratio Description The company
Estimated total useful life Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors. FedEx Corp.'s estimated total useful life of depreciable property, plant and equipment declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Estimated Age, Time Elapsed Since Purchase

Microsoft Excel LibreOffice Calc
May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
Selected Financial Data (USD $ in millions)
Accumulated depreciation and amortization hidden hidden hidden hidden hidden hidden
Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations hidden hidden hidden hidden hidden hidden
Ratio
Time elapsed since purchase (years)1 hidden hidden hidden hidden hidden hidden

2018 Calculations

1 Time elapsed since purchase (years) = Accumulated depreciation and amortization ÷ Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations
= hidden ÷ hidden = hidden

Ratio Description The company
Estimated time elapsed since purchase The approximate age in years of a company's fixed assets. Useful for comparison purposes. FedEx Corp.'s estimated time elapsed since purchase of depreciable property, plant and equipment improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level.

Estimated Remaining Life

Microsoft Excel LibreOffice Calc
May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
Selected Financial Data (USD $ in millions)
Net property and equipment hidden hidden hidden hidden hidden hidden
Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations hidden hidden hidden hidden hidden hidden
Ratio
Estimated remaining life (years)1 hidden hidden hidden hidden hidden hidden

2018 Calculations

1 Estimated remaining life (years) = Net property and equipment ÷ Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations
= hidden ÷ hidden = hidden

Ratio Description The company
Estimated remaining life FedEx Corp.'s estimated remaining life of depreciable property, plant and equipment declined from 2016 to 2017 but then slightly increased from 2017 to 2018.