FedEx Corp. (NYSE:FDX)

Current Provision

The current provision displays notable fluctuations over the examined years. It begins relatively moderate at 200 million USD in May 2019, sharply declines to 35 million USD in May 2020, then exhibits a significant increase to 641 million USD in May 2021. This upward trajectory continues in subsequent years, reaching 748 million USD in May 2022, 945 million USD in May 2023, and culminating at 1,667 million USD in May 2024. The overall trend indicates an accelerating rise in current income tax obligations, particularly pronounced from May 2021 onwards.

Deferred Provision (Benefit)

The deferred provision shows more variability and less linear progression. It starts with a benefit of 85 million USD in May 2019 (negative value), then reverses to a charge of 348 million USD in May 2020. Following this, the deferred provision increases further to 802 million USD in May 2021. A marked decline occurs in May 2022 to 322 million USD, followed by a moderate increase to 446 million USD in May 2023. In May 2024, the deferred provision shifts again to a benefit of 162 million USD (negative value). These oscillations suggest volatility in timing differences affecting tax liabilities and assets over the period.

Provision for Income Taxes

The aggregate provision for income taxes, which encompasses both current and deferred components, reflects considerable variation. It begins at 115 million USD in May 2019, rises significantly to 383 million USD in May 2020, and sharply escalates to 1,443 million USD in May 2021. This is followed by a reduction to 1,070 million USD in May 2022, then an increase to 1,391 million USD in May 2023, and a further slight increase to 1,505 million USD in May 2024. The trend reveals an overall increase in total tax expenses, with some intermediate years showing temporary moderation.

Summary of Observations

The current provision for income taxes displays sustained growth, especially after 2020, indicating increased taxable income or changes in tax policies resulting in higher current tax liabilities. Conversely, the deferred provision experienced considerable volatility, reflecting fluctuations in temporary differences and possibly adjustment of tax assets and liabilities. The total income tax provision is subject to these dynamics, exhibiting a general upward trend with interim fluctuations. Overall, the data suggests increasing tax expense pressures accompanied by variable deferred tax impacts over the analyzed period.

Statutory Federal Income Tax Rate

The statutory federal income tax rate remained constant at 21% throughout the entire period from May 31, 2019, to May 31, 2024, indicating no changes in federal tax legislation impacting the company's statutory tax obligations during these years.

Effective Tax Rate

The effective tax rate exhibited variability over the period analyzed. It started significantly below the statutory rate at 17.6% in May 2019, increased sharply to 23% in May 2020, showing a notable rise in tax burden or changes in tax benefits. Subsequently, the rate decreased slightly to 21.6% in May 2021 and stabilized near the statutory level at 21.9% in May 2022. In the more recent years, the effective tax rate increased again, reaching 25.9% in May 2023 and marginally declining to 25.8% in May 2024. This upward trend in the last two years suggests increased taxable income or reduced tax credits/deductions affecting the company's overall tax expense relative to earnings.

Property, equipment, leases, and intangibles (Assets)

The value increased sharply from 592 million USD in 2019 to 3,819 million USD in 2020, followed by a steady growth reaching 4,608 million USD in 2023. A slight decline to 4,597 million USD occurred in 2024, indicating a stabilization phase after rapid asset accumulation.

Employee benefits (Assets)

Employee benefits assets show fluctuation, rising from 1,256 million USD in 2019 to a peak of 1,448 million USD in 2020, then steadily declining to 744 million USD by 2024. This decline suggests reduced benefits assets or possible utilization of these benefits over time.

Self-insurance accruals

There has been a consistent increase in self-insurance accruals from 585 million USD in 2019 to 1,183 million USD in 2024, indicating growing reserves for insurance-related liabilities.

Other (Assets)

The other assets category remained relatively stable with minor fluctuations, starting at 510 million USD in 2019 and ending at 561 million USD in 2024, with a dip in some years, suggesting variability in smaller asset components.

Net operating loss/credit carryforwards

These tax attributes experienced an initial rise from 1,139 million USD in 2019 to 1,262 million USD in 2020, followed by a drop to 934 million USD in 2021, then steadily increasing again to 1,306 million USD in 2024, signaling variable but overall increasing tax loss carryforward potential.

Deferred tax assets, gross

Deferred tax assets nearly doubled from 4,082 million USD in 2019 to 7,755 million USD in 2020, then stabilized around 8,000 million USD through 2024. This level suggests substantial recognition of future tax benefits.

Valuation allowances

Valuation allowances, which reduce deferred tax assets, decreased from -590 million USD in 2019 to -382 million USD in 2021, then gradually rose to -537 million USD by 2024. This reflects some recovery in the confidence of realizable tax benefits after an initial reduction.

Deferred tax assets (net of valuation allowances)

Net deferred tax assets increased significantly from 3,492 million USD in 2019 to over 7,300 million USD in 2020, after which values fluctuated mildly around 7,700 to 7,800 million USD through 2024, indicating sustained tax asset recognition net of allowances.

Property, equipment, leases, and intangibles (Liabilities)

Corresponding deferred tax liabilities grew negatively from -4,633 million USD in 2019 to -10,815 million USD in 2024, showing continuous accumulation of tax obligations related to these assets.

Employee benefits (Liabilities)

Employee benefits liabilities appeared only in 2024 at -68 million USD, suggesting the recognition of related deferred tax obligations in the latest period.

Other (Liabilities)

Other liabilities fluctuated with an increasing negative balance from -340 million USD in 2019 to -140 million USD in 2024, though the trend is variable, reflecting changes in miscellaneous deferred tax liabilities.

Deferred tax liabilities (Total)

Overall deferred tax liabilities have more than doubled, moving from -4,973 million USD in 2019 to approximately -11,023 million USD in 2024, illustrating a significant rise in tax obligations associated with temporary differences.

Net deferred tax assets (liabilities)

The net deferred tax position worsened from -1,481 million USD in 2019 to -3,169 million USD in 2024, indicating that deferred tax liabilities have grown faster than deferred tax assets, increasing the net deferred tax liability over the period.

The financial data reveals distinct trends in the noncurrent deferred tax assets and liabilities over the six-year period from May 31, 2019, to May 31, 2024.

Noncurrent deferred tax assets

The noncurrent deferred tax assets, included within other assets, exhibited relatively minor fluctuations. Starting at 1,340 million USD in 2019, this figure increased slightly to 1,418 million USD in 2021, then experienced a decline in 2022 and 2023 to 1,163 million USD, before rising again to 1,313 million USD by 2024. Overall, the balance remained within a narrow range, indicating relative stability with minor year-to-year variations.

Noncurrent deferred tax liabilities

In contrast, the noncurrent deferred tax liabilities showed a consistent upward trajectory throughout the period. The liabilities increased substantially from 2,821 million USD in 2019 to 4,489 million USD in 2023, with a slight decrease to 4,482 million USD in 2024. This represents a significant growth in deferred tax obligations, suggesting an accumulation of taxable temporary differences over these years.

When comparing the two categories, deferred tax liabilities grew at a notably faster pace and to a much higher absolute level compared to the relatively stable deferred tax assets. This divergence points to an increasing net deferred tax liability position over the period under review.

The financial data over the six-year period from May 31, 2019, to May 31, 2024, reveals several noteworthy trends and changes in the company's asset base, liabilities, equity, and profitability, with adjustments made for deferred income tax considerations.

Total Assets

Reported total assets show a strong upward trend from US$54,403 million in 2019 to a peak of US$87,143 million in 2023, with a slight decrease to US$87,007 million in 2024. Adjusted total assets follow a similar progression, rising from US$53,063 million in 2019 to US$85,980 million in 2023 before a modest decline to US$85,694 million in 2024. The consistent growth over the period indicates expansion in the company's asset base, although the slight decrease in the last year suggests stabilization or moderate contraction.

Total Liabilities

Reported total liabilities increased markedly from US$36,646 million in 2019 to US$61,055 million in 2022 and 2023, before decreasing to US$59,425 million in 2024. Adjusted total liabilities mirror this trend, growing from US$33,825 million in 2019 to US$56,566 million in 2023, then falling to US$54,943 million in 2024. The growth in liabilities over the initial years aligns with asset growth; however, the recent reduction in liabilities could indicate improved financial management or deleveraging.

Common Stockholders’ Investment

Reported common stockholders’ investment rose steadily through the years, from US$17,757 million in 2019 to US$27,582 million in 2024. Adjusted common stockholders’ investment shows a similar upward path but at a slightly higher level, increasing from US$19,238 million in 2019 to US$30,751 million in 2024. This sustained growth in equity suggests strong reinvestment of earnings or capital infusion, supporting the company’s expanded asset base.

Net Income

Reported net income demonstrates significant volatility. Initially, it rose from US$540 million in 2019 to US$1,286 million in 2020, then surged sharply to US$5,231 million in 2021. This was followed by a decline to US$3,826 million in 2022, with modest increases in 2023 and 2024, reaching US$4,331 million. Adjusted net income presents somewhat different dynamics; it increases steadily from US$455 million in 2019 to peak at US$6,033 million in 2021, drops to US$4,148 million in 2022, slightly recovers to US$4,418 million in 2023, but then decreases to US$4,169 million in 2024. The differences between reported and adjusted net income highlight the impact of deferred tax adjustments, with the fluctuations suggesting external or operational factors affecting profitability during these years.

Net Profit Margin Trends

The reported net profit margin shows an overall upward trend from 0.77% in 2019 to 4.94% in 2024, with a notable peak at 6.23% in 2021 followed by a dip in 2022. The adjusted net profit margin follows a similar trajectory, rising from 0.65% in 2019 to a peak of 7.19% in 2021 before stabilizing around 4.75%-4.90% in the subsequent years. This indicates improving profitability over the period, with adjustments reflecting slightly higher margins in earlier years.

Total Asset Turnover Patterns

Both reported and adjusted total asset turnover ratios declined sharply from 2019 to 2020, from approximately 1.28-1.31 to around 0.94-0.96, indicative of reduced efficiency in asset utilization during that period. From 2020 onward, there is a gradual recovery, with total asset turnover ratios improving and stabilizing near 1.01-1.10 by 2024. The adjusted ratios marginally exceed the reported figures during most periods, suggesting some reconciliations that enhance the perceived asset turnover efficiency.

Financial Leverage Evolution

Reported financial leverage increased significantly from 3.06 in 2019 to 4.02 in 2020, then declined steadily to 3.15 by 2024. Adjusted financial leverage also rose in 2020 but to a lesser extent, peaking at 3.59 before declining consistently to 2.79 in 2024. The steady decline post-2020 suggests a trend of deleveraging and improved capital structure management, with the adjustments consistently showing lower leverage levels compared to reported figures, implying conservative adjustments.

Return on Equity (ROE) Developments

Reported ROE exhibits a significant rise from 3.04% in 2019 to a peak of 21.64% in 2021, followed by a decrease stabilizing around 15.2%-15.7% through 2023-2024. Adjusted ROE mirrors this pattern with a slightly higher spike at 22.61% in 2021, but then declines to 13.56% by 2024. The volatility reflects substantial improvements in profitability and capital efficiency peaking in 2021, with some contraction in subsequent years yet maintaining a higher level than in earlier periods.

Return on Assets (ROA) Movements

The reported ROA increases from 0.99% in 2019 to 6.32% in 2021, then dips slightly to 4.98% by 2024. Adjusted ROA trends higher overall, from 0.86% in 2019 to a peak of 7.42% in 2021, before moderating around 4.86% in 2024. This pattern is consistent with the profit margin and asset turnover trends, showing enhanced asset profitability culminating in 2021, with some normalization afterward.

Net Income Trends

Reported net income showed a significant increase from 540 million in 2019 to a peak of 5,231 million in 2021, followed by a decrease to 3,826 million in 2022. Thereafter, it gradually increased to 4,331 million by 2024. Adjusted net income followed a similar trend, rising from 455 million in 2019 to 6,033 million in 2021, then dropping to 4,148 million in 2022. The figures recovered slightly to 4,169 million in 2024.

Net Profit Margin Analysis

The reported net profit margin improved from 0.77% in 2019 to a high of 6.23% in 2021, before declining to 4.09% in 2022 and subsequently increasing to 4.94% in 2024. Adjusted net profit margin demonstrated a similar pattern, starting at 0.65% in 2019, peaking at 7.19% in 2021, then dropping to 4.44% in 2022 and stabilizing around 4.75% in 2024.

Comparison Between Reported and Adjusted Data

Adjusted net income and profit margins are consistently higher than reported figures, indicating that adjustments, likely related to deferred income tax, favorably impact profit assessment. The gap between reported and adjusted figures is most pronounced in the 2020 and 2021 periods, suggesting significant tax-related adjustments affecting those years.

Overall Insights

The data reflects strong financial performance improvements up to 2021, followed by a notable decline in 2022, possibly due to external or operational challenges. The subsequent recovery in 2023 and 2024 suggests resilience and effective management. Continued differences between reported and adjusted metrics underscore the importance of considering tax adjustments for a more comprehensive profitability evaluation.

The data reveals several notable trends in the total assets and asset turnover ratios over the six-year period.

Total Assets

Reported total assets increased steadily from 54,403 million US dollars in 2019 to a peak of 87,143 million in 2023, followed by a slight decline to 87,007 million in 2024. The adjusted total assets, which consider deferred income tax adjustments, exhibited a similar upward trajectory, rising from 53,063 million in 2019 to 85,980 million in 2023 before a minor drop to 85,694 million in 2024. This consistent growth over the years reflects an expansion in asset base, with a minor contraction in the most recent year.

Total Asset Turnover

The reported total asset turnover ratio began at 1.28 in 2019, indicating relatively high efficiency in asset utilization. However, it sharply declined to 0.94 in 2020, likely reflecting operational challenges or lower revenue generation relative to assets during that period. Thereafter, the ratio showed a gradual improvement, increasing to 1.09 in 2022 before slightly decreasing to 1.01 in 2024. The adjusted asset turnover ratios follow a very similar pattern, starting at 1.31 in 2019, dipping to 0.96 in 2020, and then recovering to 1.10 in 2022, with a mild decrease to 1.02 in 2024. This pattern suggests a recovery phase after 2020, but efficiency has not returned to the initial high levels seen in 2019.

Overall, the data highlights a period of asset growth accompanied by a transient decrease in asset utilization efficiency, followed by partial recovery. The adjustment for deferred income tax slightly lowers the asset base but does not materially alter the trends observed in asset turnover ratios. The minor declines in 2024 in both total assets and turnover ratios may warrant further monitoring to assess whether these represent the start of a new trend or temporary fluctuations.

The analysis of the annual financial data over the six-year period reveals several notable trends in the company's asset base, equity, and financial leverage ratios.

Total Assets

Reported total assets increased steadily from $54,403 million in 2019 to a peak of $87,143 million in 2023, before slightly declining to $87,007 million in 2024. The adjusted total assets follow a similar upward trajectory, rising from $53,063 million in 2019 to $85,980 million in 2023, then marginally decreasing to $85,694 million in 2024. This overall growth indicates expansion in the company’s asset base over the period, with a stabilization or slight contraction in the most recent year.

Common Stockholders’ Investment

Reported common stockholders' investment exhibits consistent growth, increasing from $17,757 million in 2019 to $27,582 million in 2024. The adjusted figures show a slightly higher base and similar upward trend, rising from $19,238 million in 2019 to $30,751 million in 2024. This steady increase suggests sustained reinvestment and equity growth, enhancing the company’s capital structure.

Financial Leverage (Ratio)

Financial leverage ratios demonstrate a decreasing trend throughout the analyzed period. Reported financial leverage declined from 3.06 in 2019 to 3.15 in 2024, with some fluctuation including a peak of 4.02 in 2020 and a gradual decrease thereafter. Adjusted financial leverage consistently declined from 2.76 in 2019 to 2.79 in 2024, reaching a low at 2.79 in 2024 from a peak of 3.59 in 2020. This trend implies a gradual reduction in reliance on debt relative to equity, indicating an improving financial stability and lower financial risk profile over time.

Overall, the data indicate growth in the company’s asset base and equity position, accompanied by a steady decrease in financial leverage. The company appears to have strengthened its equity base relative to its debt, potentially reflecting a strategic move toward less leveraged financing and improved balance sheet robustness over the six-year period.

The financial data reveals several notable trends and shifts over the six-year period ending May 31, 2024. Both reported and adjusted financial figures indicate fluctuations in net income, stockholders' investment, and return on equity (ROE), with varying degrees of divergence between reported and adjusted measures.

Net Income Trends

The reported net income demonstrates significant volatility, starting at $540 million in 2019, peaking sharply at $5,231 million in 2021, and then declining to $4,331 million by 2024. Adjusted net income follows a similar pattern but generally shows higher values than reported income for most years except 2019, indicating that non-recurring or deferred income tax adjustments have a substantial positive impact on net income, especially during the peak years of 2020 and 2021.

Common Stockholders’ Investment

Reported common stockholders’ investment consistently increases year over year, from $17,757 million in 2019 to $27,582 million in 2024. The adjusted figures, which factor in tax-related adjustments, are uniformly higher than reported values throughout the entire period, suggesting additional valuations or reinvested earnings that are beneficial to shareholders’ equity. The steady growth in this metric indicates a stable increase in shareholders' equity base over time.

Return on Equity (ROE) Analysis

ROE shows considerable variation. The reported ROE rises from 3.04% in 2019 to a substantial peak of 21.64% in 2021 before settling around 15% in subsequent years. Adjusted ROE reflects a similar trajectory but with somewhat higher variability; it peaks at 22.61% in 2021 but then declines to 13.56% by 2024. The difference between reported and adjusted ROE points to the impact of deferred or adjusted income tax elements on profitability ratios, with adjustments tending to amplify ROE during peak years and reducing it in the later years.

Overall, the data suggests that the company experienced a period of robust profitability around 2020-2021, as reflected in both reported and adjusted net income and associated metrics. Following that peak, there was a moderate decline or stabilization in profitability by 2024, although the equity base continued to grow steadily. Adjustments related to income tax have a meaningful effect on reported figures, enhancing net income and ROE during certain periods and thereby providing a more nuanced perspective on financial performance beyond the reported results alone.

The analysis of the annual income and asset data reveals several notable trends over the six-year period.

Net Income

The reported net income experienced a substantial increase from 2019 to 2021, rising from $540 million to $5,231 million, followed by a decline in 2022 to $3,826 million. Subsequent years show a moderate recovery to $4,331 million in 2024. Similarly, adjusted net income rose steadily from $455 million in 2019 to a peak of $6,033 million in 2021. Thereafter, it declined to $4,148 million in 2022 but rebounded to $4,418 million in 2023 before slightly decreasing to $4,169 million in 2024. The adjusted figures indicate generally higher profitability compared to reported figures, particularly pronounced during peak years.

Total Assets

Reported total assets demonstrated consistent growth from $54,403 million in 2019 to a peak of $87,143 million in 2023, with a slight decline to $87,007 million in 2024. Adjusted total assets follow a nearly identical pattern, increasing from $53,063 million in 2019 to $85,980 million in 2023, before a minor decrease to $85,694 million in 2024. The steady asset base growth suggests ongoing investments or acquisitions over the period.

Return on Assets (ROA)

Reported ROA rose markedly from 0.99% in 2019 to a high of 6.32% in 2021, then diminished to 4.45% in 2022, followed by a gradual increase to 4.98% in 2024. Adjusted ROA shows a similar trajectory but with slightly higher values, increasing from 0.86% in 2019 to 7.42% in 2021, then decreasing to 4.89% in 2022 and stabilizing near 4.86% in 2024. This pattern reflects efficiency improvements up to 2021, a subsequent decline, and stabilization thereafter.

Overall Trends and Insights

The data suggests that both reported and adjusted net income and ROA peaked in 2021, followed by a period of decline and relative stabilization. Total assets grew steadily throughout the entire period, indicating sustained capital base expansion. The divergence between reported and adjusted net income and ROA highlights the impact of tax adjustments on performance measurement, with adjusted metrics generally showing stronger profitability. The recent slight decline in adjusted net income and ROA in 2024 may warrant further investigation to understand underlying factors.