FedEx’s mandatory Management Discussion and Analysis

Companies must be aware of the variables that drive the economics of their business, both for their revenues and
expenses- Some of these drivers are internal to the company, and controllable (e-g-, advertising spending), and others
are external, and less controllable, if at all (e-g-, interest rates)- In good times, management will often credit their fine
performance to the decisions they’ve made about the controllable variables- In bad times, they often point to the
uncontrollable drivers to explain disappointing results-

Review FedEx’s mandatory Management Discussion and Analysis (“MD&A”) accompanying their annual report, for fiscal
years 2015 and 2016-

Assume the role of a research analyst, and prepare a report, in your own words, summarizing the part of the
commentary in the MD&A of 2015 that discusses the business drivers impacting the expenses of that year- (Search for
the section with MD&A entitled “Operating Income”-)



Sample Solution