Reference no: EM13570881

Note the locations of the following (page numbers are the ones "printed" on the pages, not the page numbers of the .pdf file):

Income Statement - page 39

Balance Sheet - page 41

Stockholders' Equity Statement - page 43

Note 6: Long-Term Debt - page 49

Note 7: Leases - page 50

Note 13: Retirement Plans - page 54, with the table of benefit obligations and plan assets on page 58, and the table of expense detail on page 60

Answer the following:

1. FedEx reports no capital leases in its footnote or on its balance sheet (the footnote states that capital leases are not material).Without that information, what discount rate would you use to calculate the present value of its future operating lease payments?

2. Using the rate you determined in question 1., estimate the present value of future operating lease payments at May 31, 2013.You may round to the nearest whole percentage point if you're doing this calculation with the present value tables.

3. Assume that the financial statements as reported for FedEx yield the following for fiscal year 2013:

4. RNOA = $1,621 (NOPAT) / $14,511 (Avg. NOA) = 11.2%

5. NOPM = $1,621 (NOPAT) / $44,287 (Revenue) = 3.7%

6. NOAT = $44,287 (Revenue) / $14,511 (Avg. NOA) = 3.05

7. What would RNOA, NOPM, and NOAT be if you factored in the capitalization of operating leases? How would this affect your analysis of FedEx?

8. Are FedEx's postemployment benefit plans paid for "out of pocket", or are they funded, similar to a pension?How can you tell?

9. For pension plans only, were returns on plan assets better or worse than expected for fiscal year 2013?For fiscal year 2012?How can you tell?

10. How much was paid to FedEx retirees under pension plans for fiscal year 2013?

11. What effect did pension plans have on FedEx's cash flows in fiscal year 2013?

12. Did the number of FedEx common shares held in treasury increase or decrease from May 31, 2012 to May 31, 2013?What caused the increase or decrease?

13. What was the carrying value (book value) of FedEx's debt (including the current portion) as of May 31, 2013?What was the fair value of the debt at that date?What kinds of factors might explain a difference such as the one you observe?

    Note that you do not need any reference points beyond the Annual Report to answer these questions.