filings.toolsItem 1B. UNRESOLVED STAFF COMMENTS
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Item 1B. UNRESOLVED STAFF COMMENTS
None.
| ITEM 2. | PROPERTIES |
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FedEx Express Group
FedEx Express Segment
FedEx Express’s principal owned and leased properties include its aircraft, vehicles, national, regional and metropolitan sorting facilities, administration buildings, FedEx Drop Boxes and data processing and telecommunications equipment.
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Aircraft and Vehicles
As of May 31, 2016, FedEx Express’s aircraft fleet consisted of the following:
| Description | Owned | Leased | Total | Maximum Gross Structural Payload (Pounds per Aircraft)(1) | ||||||||||||
| Boeing B777F | 27 | 0 | 27 | 233,300 | ||||||||||||
| Boeing MD11 | 32 | 24 | 56 | 192,600 | ||||||||||||
| Boeing MD10-30 | 12 | 1 | 13 | 175,900 | ||||||||||||
| Boeing MD10-10 | 30 | 0 | 30 | 137,500 | ||||||||||||
| Boeing 747-400 | 2 | 0 | 2 | 261,400 | ||||||||||||
| Boeing 767F | 29 | 3 | 32 | 127,100 | ||||||||||||
| Airbus A300-600 | 32 | 36 | 68 | 106,600 | ||||||||||||
| Airbus A310-300 | 10 | 0 | 10 | 83,170 | ||||||||||||
| Boeing B757-200 | 119 | 0 | 119 | (2) | 63,000 | |||||||||||
| ATR 72-202/212 | 21 | 0 | 21 | 17,970 | ||||||||||||
| ATR 42-300/320 | 26 | 0 | 26 | 12,070 | ||||||||||||
| Cessna 208B | 239 | 0 | 239 | 2,830 | ||||||||||||
| Total | 579 | 64 | 643 | |||||||||||||
| (1) | Maximum gross structural payload includes revenue payload and container weight. |
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| (2) | Includes seven aircraft not currently in operation and awaiting completion of modification. |
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| • | The B777Fs are two-engine, wide-bodied cargo aircraft that have a longer range and larger capacity than any other aircraft we operate. |
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| • | The MD11s are three-engine, wide-bodied aircraft that have a longer range and larger capacity than MD10s. |
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| • | The MD10s are three-engine, wide-bodied aircraft that have received an Advanced Common Flightdeck modification, which includes a conversion to a two-pilot cockpit, as well as upgrades of electrical and other systems. |
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| • | The B747s are four-engine, long-range, wide-bodied cargo aircraft. These aircraft are leased to and operated by a third party. |
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| • | The B767Fs are two-engine, long-range, wide-bodied cargo aircraft. |
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| • | The A300s and A310s are two-engine, wide-bodied aircraft that have a longer range and more capacity than B757s. |
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| • | The B757s are two-engine, narrow-bodied aircraft configured for cargo service. |
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| • | The ATR and Cessna 208 turbo-prop aircraft are leased to independent operators to support FedEx Express operations in areas where demand does not justify use of a larger aircraft. These operators use the aircraft to move FedEx packages to and from airports served by FedEx Express’s larger jet aircraft. The lease agreements generally call for the lessee to provide the flight crews, maintenance, fuel and other supplies required to operate the aircraft, and FedEx Express reimburses the lessee for these items. The lease agreements are for terms not exceeding one year and are generally cancelable upon 30 days’ notice. |
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An inventory of spare engines and parts is maintained for each aircraft type.
At May 31, 2016, FedEx Express operated approximately 57,000 ground transport vehicles, including pickup-and-delivery vans, larger trucks called container transport vehicles and over-the-road tractors and trailers.
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Aircraft Purchase Commitments
The following table is a summary of the number and type of aircraft we were committed to purchase as of May 31, 2016, with the year of expected delivery:
| B767F(1) | B777F(2) | Total | ||||||||||
| 2017 | 12 | — | 12 | |||||||||
| 2018 | 16 | 2 | 18 | |||||||||
| 2019 | 13 | 2 | 15 | |||||||||
| 2020 | 12 | 3 | 15 | |||||||||
| 2021 | 10 | 3 | 13 | |||||||||
| Thereafter | 16 | 6 | 22 | |||||||||
| Total | 79 | 16 | 95 | |||||||||
| (1) | As of May 31, 2016, our obligation to purchase four of these aircraft was conditioned upon there being no event that causes FedEx Express or its employees to not be covered by the RLA. |
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| (2) | As of May 31, 2016, our obligation to purchase seven of these aircraft was conditioned upon there being no event that causes FedEx Express or its employees to not be covered by the RLA. |
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As of May 31, 2016, deposits and progress payments of $413 million had been made toward aircraft purchases and other planned aircraft-related transactions. Also see Note 17 of the accompanying consolidated financial statements for more information about our purchase commitments.
Sorting and Handling Facilities
At May 31, 2016, FedEx Express operated the following major sorting and handling facilities:
| Location | Acres | Square Feet | Sorting Capacity (per hour) (1) | Lessor | Lease Expiration Year | |||||||||||||
| National | ||||||||||||||||||
| Memphis, Tennessee | 784 | 3,768,345 | 475,000 | Memphis-Shelby County Airport Authority | 2036 | |||||||||||||
| Indianapolis, Indiana | 316 | 2,509,000 | 214,000 | Indianapolis Airport Authority | 2028 | |||||||||||||
| Regional | ||||||||||||||||||
| Fort Worth, Texas | 168 | 948,000 | 76,000 | Fort Worth Alliance Airport Authority | 2021 | |||||||||||||
| Newark, New Jersey | 70 | 595,000 | 156,000 | Port Authority of New York and New Jersey | 2030 | |||||||||||||
| Oakland, California | 75 | 448,935 | 63,000 | City of Oakland | 2036 | |||||||||||||
| Greensboro, N. Carolina | 165 | 593,000 | 29,000 | Piedmont Triad Airport Authority | 2031 | |||||||||||||
| Metropolitan | ||||||||||||||||||
| Chicago, Illinois | 66 | 597,000 | 23,000 | City of Chicago | 2018/2028 | (5) | ||||||||||||
| Los Angeles, California | 34 | 305,300 | 57,000 | City of Los Angeles | 2021/2025 | (6) | ||||||||||||
| International | ||||||||||||||||||
| Anchorage, Alaska(2) | 64 | 332,000 | 25,000 | State of Alaska, Department of Transportation and Public Facilities | 2023 | |||||||||||||
| Paris, France(3) | 111 | 1,238,000 | 63,000 | Aeroports de Paris | 2029 | |||||||||||||
| Cologne, Germany(3) | 11 | 325,000 | 20,000 | Cologne Bonn Airport | 2040 | |||||||||||||
| Guangzhou, China(4) | 155 | 873,006 | 64,000 | Guangdong Airport Management Corp. | 2029 | |||||||||||||
| Osaka, Japan(4) | 17 | 425,206 | 9,000 | Kansai Airports | 2024 |
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| (1) | Documents and packages. |
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| (2) | Handles international express package and freight shipments to and from Asia, Europe and North America. |
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| (3) | Handles intra-Europe express package and freight shipments, as well as international express package and freight shipments to and from Europe. |
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| (4) | Handles intra-Asia express package and freight shipments, as well as international express package and freight shipments to and from Asia. |
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| (5) | Property is held under two separate leases — lease for original hub expires in 2018, and lease for new facility expires in 2028. |
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| (6) | Property is held under two separate leases — lease for sorting and handling facility expires in 2021, and lease for ramp expansion expires in 2025. |
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FedEx Express’s primary sorting facility, which serves as the center of its multiple hub-and-spoke system, is located at the Memphis International Airport. FedEx Express’s facilities at the Memphis International Airport also include aircraft hangars, aircraft ramp areas, vehicle parking areas, flight training and fuel facilities, administrative offices and warehouse space. In May 2016, FedEx Express opened the FedEx Cold Chain Center at its Memphis hub. Designed to protect the integrity of temperature-sensitive healthcare and perishable shipments, the facility added approximately 83,000 square feet to FedEx Express’s facilities at Memphis International Airport and forms an integral part of the FedEx global cold chain network.
FedEx Express leases these facilities from the Memphis-Shelby County Airport Authority (the “Authority”). The lease obligates FedEx Express to maintain and insure the leased property and to pay all related taxes, assessments and other charges. The lease is subordinate to, and FedEx Express’s rights thereunder could be affected by, any future lease or agreement between the Authority and the U.S. government.
FedEx Express has additional international sorting-and-handling facilities located at Narita Airport in Tokyo, Stansted Airport outside London and Pearson Airport in Toronto. FedEx Express also has a substantial presence at airports in Hong Kong, Taiwan, Dubai and Miami.
Administrative and Other Properties and Facilities
The World Headquarters of FedEx Express is located in southeastern Shelby County, Tennessee. FedEx Express owns or leases 636 facilities for city station operations in the United States. In addition, 588 city stations are owned or leased throughout FedEx Express’s international network. The majority of these leases are for terms of five to ten years. City stations serve as a sorting and distribution center for a particular city or region. We believe that suitable alternative facilities are available in each locale on satisfactory terms, if necessary.
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As of May 31, 2016, FedEx Express had approximately 41,000 Drop Boxes. FedEx Express customers can also ship from approximately 22,000 staffed drop-off locations, including FedEx Office centers and FedEx Authorized ShipCenters. Internationally, FedEx Express had approximately 13,000 drop-off locations.
TNT Express Segment
TNT Express corporate offices are located in Hoofddorp, The Netherlands. As of May 31, 2016, TNT Express had over 900 facilities worldwide, including road hubs, air hubs, depots and office facilities. These facilities are strategically located to cover the geographic areas served by TNT Express. TNT Express operates a central air hub near Liege, Belgium and a central European road hub in Duiven, The Netherlands. Approximately 42,000 vehicles, including 1,000 trailers, support TNT Express’s business.
FedEx Ground Segment
FedEx Ground’s corporate offices are located in the Pittsburgh, Pennsylvania area. As of May 31, 2016, FedEx Ground had approximately 51,000 company-owned trailers and owned or leased 575 facilities, including 33 hubs. In addition, approximately 52,000 owner-operated vehicles support FedEx Ground’s business. Of the 373 facilities that support FedEx Home Delivery, 303 are co-located with existing FedEx Ground facilities. Leased facilities generally have terms of five years or less. The 33 hub facilities are strategically located to cover the geographic area served by FedEx Ground. The hub facilities average approximately 388,000 square feet and range in size from approximately 107,000 to 825,500 square feet.
FedEx Freight Segment
FedEx Freight’s corporate headquarters are located in Memphis, Tennessee, with some administrative offices for the FedEx Freight business in Harrison, Arkansas. As of May 31, 2016, the FedEx Freight segment operated approximately 65,000 vehicles and trailers and approximately 370 service centers, which are strategically located to provide service throughout North America. These facilities range in size from approximately 860 to 220,000 square feet of office and dock space. FedEx Custom Critical’s headquarters are located in Green, Ohio.
FedEx Services Segment
FedEx Services’ corporate headquarters are located in Memphis, Tennessee. FedEx Services leases state-of-the-art technology centers in Collierville, Tennessee and Colorado Springs, Colorado. These facilities house personnel responsible for strategic software development and other functions that support FedEx’s technology and e-commerce solutions.
FedEx Office’s corporate headquarters are located in Plano, Texas in leased facilities. As of May 31, 2016, FedEx Office operated approximately 1,800 customer facing centers, including 25 locations in Canada, and also operated 33 centralized production centers. Substantially all FedEx Office centers are leased, generally for terms of five to ten years with varying renewal options. FedEx Office centers are generally located in strip malls, office buildings or stand-alone structures and customer facing centers average 3,900 square feet in size.
FedEx Services has an agreement with OfficeMax North America, Inc. to offer FedEx Express and FedEx Ground shipping services at OfficeMax retail locations (approximately 640 locations). Additionally, the FedEx Authorized Ship Center program offers U.S. domestic and international FedEx Express and FedEx Ground shipping and drop-off services through a network of approximately 5,500 franchised and independent “pack and ship” retail locations.
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| ITEM 3. | LEGAL PROCEEDINGS |
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FedEx and its subsidiaries are subject to legal proceedings and claims that arise in the ordinary course of their business. For a description of material pending legal proceedings, see Note 18 of the accompanying consolidated financial statements.
| ITEM 4. | MINE SAFETY DISCLOSURES |
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Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding executive officers of FedEx is as follows (included herein pursuant to Instruction 3 to Item 401(b) of Regulation S-K and General Instruction G(3) of Form 10-K):
| Name and Office | Age | Positions and Offices Held and Business Experience | ||
| Frederick W. Smith Chairman, President and Chief Executive Officer | 71 | Chairman, President and Chief Executive Officer of FedEx since January 1998; Chairman of FedEx Express since 1975; Chairman, President and Chief Executive Officer of FedEx Express from April 1983 to January 1998; Chief Executive Officer of FedEx Express from 1977 to January 1998; and President of FedEx Express from June 1971 to February 1975. | ||
| David J. Bronczek President and Chief Executive Officer, FedEx Express | 62 | President and Chief Executive Officer of FedEx Express since January 2000; Executive Vice President and Chief Operating Officer of FedEx Express from January 1998 to January 2000; Senior Vice President — Europe, Middle East and Africa of FedEx Express from June 1995 to January 1998; Senior Vice President — Europe, Africa and Mediterranean of FedEx Express from June 1993 to June 1995; Vice President — Canadian Operations of FedEx Express from February 1987 to March 1993; and several sales and operations managerial positions at FedEx Express from 1976 to 1987. Mr. Bronczek serves as a director of International Paper Company, an uncoated paper and packaging company. |
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| Name and Office | Age | Positions and Offices Held and Business Experience | ||
| Robert B. Carter Executive Vice President — FedEx Information Services and Chief Information Officer | 57 | Executive Vice President — FedEx Information Services and Chief Information Officer of FedEx since January 2007; Executive Vice President and Chief Information Officer of FedEx from June 2000 to January 2007; Corporate Vice President and Chief Technology Officer of FedEx from February 1998 to June 2000; Vice President — Corporate Systems Development of FedEx Express from September 1993 to February 1998; Managing Director — Systems Development of FedEx Express from April 1993 to September 1993. Mr. Carter serves as a director of New York Life Insurance Company, a mutual life insurance company. | ||
| Michael L. Ducker President and Chief Executive Officer, FedEx Freight Corporation | 62 | President and Chief Executive Officer of FedEx Freight Corporation since January 2015; Executive Vice President and Chief Operating Officer and President of International for FedEx Express from December 2009 to January 2015; Executive Vice President and President of International of FedEx Express from December 1999 to December 2009; Senior Vice President of Asia/Pacific of FedEx Express from September 1995 to December 1999; and various management positions in operations at FedEx Express from 1978 to 1995. Mr. Ducker serves as a director of International Flavors & Fragrances Inc., a global creator of flavors and fragrances used in consumer products. | ||
| T. Michael Glenn Executive Vice President — Market Development and Corporate Communications | 60 | Executive Vice President — Market Development and Corporate Communications of FedEx since January 1998; Senior Vice President — Marketing, Customer Service and Corporate Communications of FedEx Express from June 1994 to January 1998; Senior Vice President — Marketing and Corporate Communications of FedEx Express from December 1993 to June 1994; Senior Vice President — Worldwide Marketing Catalog Services and Corporate Communications of FedEx Express from June 1993 to December 1993; Senior Vice President — Catalog and Remail Services of FedEx Express from September 1992 to June 1993; Vice President — Marketing of FedEx Express from August 1985 to September 1992; and various management positions in sales and marketing and senior sales specialist of FedEx Express from 1981 to 1985. Mr. Glenn serves as a director of Pentair plc, a diversified industrial manufacturing company operating in water and technical products business segments, and as a director of Level 3 Communications, Inc., a global communications services company. |
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| Name and Office | Age | Positions and Offices Held and Business Experience | ||
| Alan B. Graf, Jr. Executive Vice President and Chief Financial Officer | 62 | Executive Vice President and Chief Financial Officer of FedEx since January 1998; Executive Vice President and Chief Financial Officer of FedEx Express from February 1996 to January 1998; Senior Vice President and Chief Financial Officer of FedEx Express from December 1991 to February 1996; Vice President and Treasurer of FedEx Express from August 1987 to December 1991; and various management positions in finance and a senior financial analyst of FedEx Express from 1980 to 1987. Mr. Graf serves as a director of Mid-America Apartment Communities, Inc., a real estate investment trust that focuses on acquiring, constructing, developing, owning and operating apartment communities, and as a director of NIKE, Inc., a designer and marketer of athletic footwear, apparel, equipment and accessories for sports and fitness activities. | ||
| Henry J. Maier President and Chief Executive Officer, FedEx Ground | 62 | President and Chief Executive Officer of FedEx Ground since June 2013; Executive Vice President — Strategic Planning and Communications of FedEx Ground from September 2009 to June 2013; Senior Vice President — Strategic Planning and Communications of FedEx Ground from December 2006 to September 2009; Vice President — Marketing of FedEx Services from March 2000 to December 2006; Vice President — Marketing and Communications of FedEx Ground from June 1999 to March 2000; and various management positions in logistics, sales, marketing and communications with RPS, Inc. and Caliber Logistics, Inc. from 1986 to 1999. | ||
| Christine P. Richards Executive Vice President, General Counsel and Secretary | 61 | Executive Vice President, General Counsel and Secretary of FedEx since June 2005; Corporate Vice President — Customer and Business Transactions of FedEx from March 2001 to June 2005; Senior Vice President and General Counsel of FedEx Services from March 2000 to June 2005; Staff Vice President — Customer and Business Transactions of FedEx from November 1999 to March 2001; Vice President — Customer and Business Transactions of FedEx Express from 1998 to November 1999; and various legal positions with FedEx Express from 1984 to 1998. |
Executive officers are elected by, and serve at the discretion of, the Board of Directors. There is no arrangement or understanding between any executive officer and any person, other than a director or executive officer of FedEx or of any of its subsidiaries acting in his or her official capacity, pursuant to which any executive officer was selected. There are no family relationships between any executive officer and any other executive officer or director of FedEx.
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PART II
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