filings.toolsItem 2. PROPERTIES
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Item 2. PROPERTIES
FedEx Express Segment
FedEx Express’s principal owned and leased properties include its aircraft, vehicles, major sorting and handling facilities, administration buildings, FedEx Drop Boxes and data processing and telecommunications equipment.
Aircraft and Vehicles
As of May 31, 2018, FedEx Express’s aircraft fleet consisted of the following:
| Description | Owned | Leased | Total | Maximum Gross Structural Payload (Pounds per Aircraft) | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Boeing 747-400 | 2 | — | 2 | 261,400 | ||||||||||||
| Boeing B777F | 31 | 3 | 34 | 233,300 | ||||||||||||
| Boeing MD11 | 45 | 12 | 57 | 192,600 | ||||||||||||
| Boeing MD10-30 | 13 | — | 13 | 175,900 | ||||||||||||
| Boeing MD10-10 | 25 | — | 25 | 137,500 | ||||||||||||
| Boeing 767F | 57 | — | 57 | (1) | 127,100 | |||||||||||
| Airbus A300-600 | 33 | 35 | 68 | 106,600 | ||||||||||||
| Airbus A310-300 | 10 | — | 10 | 83,170 | ||||||||||||
| Boeing B757-200 | 119 | — | 119 | 63,000 | ||||||||||||
| ATR-72 | 21 | — | 21 | 17,970 | ||||||||||||
| ATR-42 | 25 | — | 25 | 12,070 | ||||||||||||
| Cessna 208B | 239 | — | 239 | 2,830 | ||||||||||||
| Total | 620 | 50 | 670 |
| (1) | Includes one aircraft not currently in operation and undergoing pre-service modification. |
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At May 31, 2018, FedEx Express operated approximately 90,000 vehicles (including approximately 28,000 owner-operated vehicles that support TNT Express) in its integrated global network.
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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, 2018, with the year of expected delivery:
| Cessna SkyCourier 408 | ATR 72-600F | B767F(1) | B777F(2) | Total | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | — | — | 15 | 3 | 18 | |||||||||||||||
| 2020 | — | — | 16 | 6 | 22 | |||||||||||||||
| 2021 | 12 | 5 | 10 | — | 27 | |||||||||||||||
| 2022 | 12 | 6 | 10 | 3 | 31 | |||||||||||||||
| 2023 | 12 | 6 | 6 | — | 24 | |||||||||||||||
| Thereafter | 14 | 13 | — | — | 27 | |||||||||||||||
| Total | 50 | 30 | 57 | 12 | 149 |
| (1) | As of May 31, 2018, our obligation to purchase four B767F aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the RLA. |
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| (2) | As of May 31, 2018, our obligation to purchase three B777F aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the RLA. |
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As of May 31, 2018, we had $1.2 billion in deposits and progress payments on 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.
On June 18, 2018, FedEx Express entered into agreements to purchase 12 incremental B777F aircraft and 12 incremental B767F aircraft. Six of the B777F and one of the B767F aircraft purchases are conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the RLA (the RLA condition was removed from three previously ordered B777F aircraft). The B777F aircraft are expected to be delivered between 2021 and 2025. The B767F aircraft are expected to be delivered between 2020 and 2022. As part of these agreements, one B777F and one B767F aircraft delivery were accelerated from 2020 to 2019.
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Sorting and Handling Facilities
At May 31, 2018, 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 | 484,000 | Memphis-Shelby County Airport Authority | 2036 | |||||||||||
| Indianapolis, Indiana | 370 | 2,509,000 | 216,000 | 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 | 23,000 | Piedmont Triad Airport Authority | 2031 | |||||||||||
| Metropolitan | ||||||||||||||||
| Chicago, Illinois | 54 | 481,350 | 23,000 | City of Chicago | 2028 | |||||||||||
| Los Angeles, California | 34 | 305,300 | 57,000 | City of Los Angeles | 2021/2025(2) | |||||||||||
| International | ||||||||||||||||
| Anchorage, Alaska(3) | 64 | 332,000 | 25,000 | State of Alaska, Department of Transportation and Public Facilities | 2023 | |||||||||||
| Paris, France(4) | 111 | 1,238,000 | 63,000 | Aeroports de Paris | 2048 | |||||||||||
| Cologne, Germany(4) | 11 | 325,000 | 20,000 | Cologne Bonn Airport | 2040 | |||||||||||
| Guangzhou, China(5) | 155 | 873,006 | 62,000 | Guangdong Airport Management Corp. | 2029 | |||||||||||
| Osaka, Japan(5) | 17 | 425,206 | 9,000 | Kansai Airports | 2024 |
| (1) | Documents and packages. |
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| (2) | Property is held under two separate leases — the lease for the sorting and handling facility expires in 2021, and the lease for the ramp expansion expires in 2025. |
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| (3) | Handles international express package and freight shipments to and from Asia, Europe and North America. |
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| (4) | 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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| (5) | 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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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, the FedEx Cold Chain Center, administrative offices and warehouse space.
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 major 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.
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TNT Express operates a central air hub near Liege, Belgium and a central European road hub in Duiven, The Netherlands.
Administrative and Other Properties and Facilities
The World Headquarters of FedEx Express is located in southeastern Shelby County, Tennessee. FedEx Express international headquarters are located in Hoofddorp, The Netherlands. FedEx Express owns or leases 659 facilities for city station operations in the U.S. In addition, 566 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.
As of May 31, 2018, TNT Express had over 1,000 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.
As of May 31, 2018, FedEx Express had approximately 36,000 Drop Boxes. FedEx Express customers can also ship from approximately 28,000 staffed drop-off locations, including FedEx Office stores and FedEx Authorized ShipCenters. Internationally, FedEx Express had approximately 48,000 drop-off locations, including approximately 26,000 TNT Express drop-off locations.
FedEx Ground Segment
FedEx Ground’s corporate offices are located in the Pittsburgh, Pennsylvania area. As of May 31, 2018, FedEx Ground owned or leased 601 facilities, including 37 hubs. In addition, approximately 62,000 owner-operated vehicles support FedEx Ground’s business. Of the 411 facilities that support FedEx Home Delivery, 373 are co-located with existing FedEx Ground facilities. Leased facilities generally have terms of five years or less. The 37 hub facilities are strategically located to cover the geographic area served by FedEx Ground. The hub facilities average approximately 458,000 square feet and range in size from approximately 107,000 to 1,002,000 square feet.
FedEx Freight Segment
FedEx Freight’s corporate headquarters are located in Memphis, Tennessee, with some administrative offices in Harrison, Arkansas. As of May 31, 2018, FedEx Freight operated approximately 27,000 vehicles and 370 service centers, which are strategically located to provide service throughout North America. These facilities range in size from approximately 1,000 to 220,000 square feet of office and dock space.
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, 2018, FedEx Office operated approximately 1,900 customer-facing stores and also operated 32 centralized production centers. Substantially all FedEx Office stores are leased, generally for terms of five to ten years with varying renewal options. FedEx Office stores are generally located in strip malls, office buildings or stand-alone structures and customer-facing stores average approximately 3,700 square feet in size.
FedEx Services has an agreement with Office Depot, Inc. to offer U.S. domestic and international FedEx Express and FedEx Ground shipping and drop-off services at Office Depot and OfficeMax retail locations (approximately 1,400 locations). Additionally, the FedEx Authorized ShipCenter program offers U.S. domestic and international FedEx Express and FedEx Ground shipping and drop-off services through a network of over 5,000 franchised and independent “pack and ship” retail locations.
During 2018 we entered into an agreement to place up to 500 new FedEx Office locations within select U.S. Walmart stores nationwide during 2019 and 2020.
FedEx Trade Networks
FedEx Trade Networks’ corporate headquarters are located in Memphis, Tennessee. In total, FedEx Trade Networks Transport & Brokerage has approximately 140 offices in 120 service locations throughout North America and in Africa, Asia-Pacific, Europe, India, Latin America and the Middle East. In addition, FedEx Supply Chain has approximately 110 facilities through which it operates its supply chain logistics services, and FedEx Custom Critical operates approximately 150 ExpressCenters.
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