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 equipment	3 to 30 years
Information technology	2 to 10 years
Vehicles and trailers	3 to 15 years
Facilities and other	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 $3.4 billion in 2019, $3.1 billion in 2018 and $2.9 billion in 2017. Depreciation and amortization expense includes amortization of assets under capital lease.

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

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

US$ in millions

		May 31, 2019		May 31, 2018		May 31, 2017		May 31, 2016		May 31, 2015		May 31, 2014
	Aircraft and related equipment
	Package handling and ground support equipment
	Information technology
	Vehicles and trailers
	Facilities and other
	Property and equipment, at cost
	Accumulated depreciation and amortization
	Net property and equipment

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
Property and equipment, at cost	Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.	FedEx Corp.’s property and equipment, at cost increased from 2017 to 2018 and from 2018 to 2019.
Net property and equipment	Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.	FedEx Corp.’s net property and equipment increased from 2017 to 2018 and from 2018 to 2019.

FedEx Corp., Property, Plant and Equipment Ratios

		May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
	Average age
	Estimated total useful life (years)
	Estimated age, time elapsed since purchase (years)
	Estimated remaining life (years)

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).

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 2017 to 2018 but then slightly improved from 2018 to 2019.
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 increased from 2017 to 2018 but then slightly declined from 2018 to 2019 not reaching 2017 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 deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.
Estimated remaining life		FedEx Corp.’s estimated remaining life of depreciable property, plant and equipment increased from 2017 to 2018 but then declined significantly from 2018 to 2019.

		May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
	Selected Financial Data (US$ in millions)
	Accumulated depreciation and amortization
	Property and equipment, at cost
	Ratio
	Average age¹

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 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 2017 to 2018 but then slightly improved from 2018 to 2019.

		May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
	Selected Financial Data (US$ in millions)
	Property and equipment, at cost
	Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations
	Ratio
	Estimated total useful life (years)¹

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 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 increased from 2017 to 2018 but then slightly declined from 2018 to 2019 not reaching 2017 level.

		May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
	Selected Financial Data (US$ in millions)
	Accumulated depreciation and amortization
	Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations
	Ratio
	Time elapsed since purchase (years)¹

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 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 deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

		May 31, 2019	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015	May 31, 2014
	Selected Financial Data (US$ in millions)
	Net property and equipment
	Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations
	Ratio
	Estimated remaining life (years)¹

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 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 increased from 2017 to 2018 but then declined significantly from 2018 to 2019.

	FedEx Corp.	Other companies (not purchased previously)
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Relative Valuation
Discounted Cash Flow (DCF) Valuation
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Long-term Trends
Analysis
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Common-Size Financial Statements
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Analysis
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FedEx Corp. (FDX)

Analysis of Property, Plant and Equipment

Property, Plant and Equipment Accounting Policy

Property, Plant and Equipment Disclosure

Property, Plant and Equipment Ratios (Summary)

Average Age

Estimated Total Useful Life

Estimated Age, Time Elapsed since Purchase

Estimated Remaining Life