8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 18, 2010

FEDEX CORPORATION

(Exact name of registrant as specified in its charter)

Commission File Number 1-15829

Delaware (State or other jurisdiction of incorporation)	62-1721435 (IRS Employer Identification No.)
942 South Shady Grove Road, Memphis, Tennessee (Address of principal executive offices)	38120 (ZIP Code)

Registrant’s telephone number, including area code: (901) 818-7500

FEDERAL EXPRESS CORPORATION

(Exact name of registrant as specified in its charter)

Commission File Number 1-7806

Delaware (State or other jurisdiction of incorporation)	71-0427007 (IRS Employer Identification No.)
3610 Hacks Cross Road, Memphis, Tennessee (Address of principal executive offices)	38125 (ZIP Code)

Registrant’s telephone number, including area code: (901) 369-3600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

The information in this Report, including the exhibit, is being furnished pursuant to Item 2.02 of Form 8-K and General Instruction B.2 thereunder. Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

SECTION 2. FINANCIAL INFORMATION.

Item 2.02. Results of Operations and Financial Condition.

Attached as Exhibit 99.1 and incorporated herein by reference is a copy of FedEx Corporation’s press release, dated March 18, 2010, announcing its and its wholly owned subsidiary Federal Express Corporation’s financial results for the fiscal quarter ended February 28, 2010.

SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being furnished as part of this Report.

Exhibit
Number		Description
	99.1	Press Release of FedEx Corporation dated March 18, 2010.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

	FedEx Corporation
Date: March 18, 2010	By:	/s/ HERBERT C. NAPPIER
		Herbert C. Nappier
		Staff Vice President and Corporate Controller
	Federal Express Corporation
Date: March 18, 2010	By:	/s/ J. RICK BATEMAN
		J. Rick Bateman
		Vice President and Worldwide Controller

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EXHIBIT INDEX

Exhibit
Number		Description
	99.1	Press Release of FedEx Corporation dated March 18, 2010.

E-1

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

FedEx Corp. Third Quarter Net Income Grows
as Economy Strengthens
Full-Year Earnings Guidance Increased;
FedEx International Priority Package Volume Grows 18 Percent

MEMPHIS, Tenn., March 18, 2010 ... FedEx Corp. (NYSE: FDX) today reported earnings of $0.76 per diluted share for the third quarter ended February 28, compared to $0.31 per diluted share a year ago.

“Outstanding execution of our business strategy and an improving global economy drove solid financial performance in the third quarter,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer.

Third Quarter Results

FedEx Corp. reported the following consolidated results for the third quarter:

• Revenue of $8.70 billion, up 7% from $8.14 billion a year ago

• Operating income of $416 million, up 129% from $182 million last year

• Operating margin of 4.8%, up from 2.2% the previous year

• Net income of $239 million, up 146% from last year’s $97 million

Revenue and earnings increased as a result of higher shipment growth, particularly in international express and at FedEx Ground. Strict cost controls also benefited results. Increased net fuel costs, an operating loss at FedEx Freight and the partial reinstatement of certain employee compensation programs impacted the quarter’s results. One fewer operating day year over year at each of the transportation segments also negatively affected results.

Outlook

FedEx expects earnings per share of $1.17 to $1.37 per diluted share in the fourth quarter, and $3.60 to $3.80 for fiscal 2010, which reflect the current market outlook for fuel prices and a continued modest recovery in the global economy. Previously, the company expected earnings per share of $3.45 to $3.75 for fiscal 2010. The company reported a loss of $2.82 per share in last year’s fourth quarter, which included $3.46 per share of charges primarily related to the impairment of goodwill. The company’s capital spending forecast for fiscal 2010 is now $2.9 billion, up from $2.6 billion, due to additional investments in Boeing 777 aircraft.

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“In the fourth quarter, we expect to grow our revenue and earnings through increased demand for our superior services. Yield management will continue to be a top priority across all of our operating companies,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “With our improved performance and outlook, we are reinstating various employee compensation programs, which will dampen earnings growth in the fourth quarter and fiscal year 2011. We are also continuing to invest in long-term projects that improve service and reduce operating costs, such as long-range, fuel-efficient 777 freighters.”

FedEx Express Segment

For the third quarter, the FedEx Express segment reported:

• Revenue of $5.44 billion, up 8% from $5.05 billion a year ago

• Operating income of $265 million, up from $45 million last year

• Operating margin of 4.9%, up from 0.9% the previous year

Led by exports from Asia, FedEx International Priority^® (IP) average daily package volume increased 18% and IP freight revenue increased 49%. U.S. domestic average daily package volume grew 1%, while revenue per package declined slightly.

Operating profit and margin improvements were driven by volume and revenue growth, particularly in higher-margin IP package and IP freight services, as well as continued actions to control spending.

FedEx Ground Segment

For the third quarter, the FedEx Ground segment reported:

• Revenue of $1.91 billion, up 7% from last year’s $1.79 billion

• Operating income of $258 million, up 32% from $196 million a year ago

• Operating margin of 13.5%, up from 10.9% the previous year

FedEx Ground average daily package volume grew 5% year over year, primarily due to growth in the business-to-business market. Yield improved 2% primarily due to higher package weight. FedEx SmartPost average daily volume grew 46% due primarily to market share gains.

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Operating income and margin increased due to higher package volume and yield, lower self-insurance expenses and improved performance at FedEx SmartPost.

FedEx Freight Segment

For the third quarter, the FedEx Freight segment reported:

• Revenue of $1.04 billion, up 14% from last year’s $914 million

• Operating loss of $107 million, compared to an operating loss of $59 million a year ago

• Operating margin of (10.3%), compared to (6.5%) the previous year

Less-than-truckload (LTL) average daily shipments increased 26% and LTL yield declined 8% year over year due to the effects of discounted pricing. Operating loss increased in the quarter due to lower yields and higher purchased transportation costs.

FedEx Freight and FedEx National LTL implemented a 5.9% general rate increase on February 1, 2010 and are aggressively pursuing opportunities to increase yields.

FedEx Services Segment

FedEx Services segment revenue for the third quarter, which included the operations of FedEx Office, was down 11% year over year, due to declines in copy product revenues and the September 1, 2009 realignment of FedEx SupplyChain Systems to the FedEx Express reporting segment.

Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $33 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 280,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit news.fedex.com.

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Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs and third quarter fiscal 2010 Statistical Book. These materials, as well as a Webcast of the earnings release conference call to be held at 8:30 a.m. EDT on March 18 are available on the company’s Web site at www.fedex.com/us/investorrelations. A replay of the conference call Webcast will be posted on our Web site following the call.

Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, legal challenges or changes related to FedEx Ground’s owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and filings with the SEC.

Media Contact: Jess Bunn 901-818-7463
Investor Contact: Mickey Foster 901-818-7468
Home Page: fedex.com

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FEDEX CORP. FINANCIAL HIGHLIGHTS

Third Quarter Fiscal 2010
(In millions, except earnings per share and FTEs)
(Unaudited)

	Three Months Ended									Nine Months Ended
	February 28									February 28
	2010			2009			%			2010			2009			%
Revenue:
FedEx Express segment	$	5,440		$	5,050			8	%	$	15,678		$	17,567			(11	%)
FedEx Ground segment		1,910			1,793			7	%		5,477			5,343			3	%
FedEx Freight segment		1,040			914			14	%		3,090			3,467			(11	%)
FedEx Services segment		406			458			(11	%)		1,322			1,499			(12	%)
Other & eliminations		(95	)		(78	)		(22	%)		(261	)		(231	)		(13	%)
Total Revenue		8,701			8,137			7	%		25,306			27,645			(8	%)
Operating Expenses:
Salaries and employee benefits		3,549			3,414			4	%		10,350			10,502			(1	%)
Purchased transportation		1,220			1,060			15	%		3,429			3,519			(3	%)
Rentals and landing fees		593			609			(3	%)		1,764			1,838			(4	%)
Depreciation and amortization		488			496			(2	%)		1,470			1,479			(1	%)
Fuel		810			636			27	%		2,220			3,270			(32	%)
Maintenance and repairs		404			449			(10	%)		1,215			1,507			(19	%)
Other		1,221			1,291			(5	%)		3,556			3,934			(10	%)
Total Operating Expenses		8,285			7,955			4	%		24,004			26,049			(8	%)
Operating Income (Loss):
FedEx Express segment		265			45			489	%		714			930			(23	%)
FedEx Ground segment		258			196			32	%		705			604			17	%
FedEx Freight segment		(107	)		(59	)		(81	%)		(117	)		62			(289	%)
Total Operating Income		416			182			129	%		1,302			1,596			(18	%)
Other Income (Expense):
Interest, net		(19	)		(19	)		—			(52	)		(38	)		37	%
Other, net		(16	)		(4	)	NM				(28	)		(7	)	NM
Total Other Income (Expense)		(35	)		(23	)		52	%		(80	)		(45	)		78	%
Pretax Income		381			159			140	%		1,222			1,551			(21	%)
Provision for Income Taxes		142			62			129	%		457			577			(21	%)
Net Income	$	239		$	97			146	%	$	765		$	974			(21	%)
Diluted Earnings Per Share	$	0.76		$	0.31			145	%	$	2.43		$	3.12			(22	%)
Weighted Average Diluted Common and Common Equivalent Shares		315			312			1	%		314			312			1	%
Capital Expenditures	$	432		$	600			(28	%)	$	1,981		$	1,987			(0	%)
Average Full-Time Equivalents (000s)		250			248			1	%		244			251			(3	%)

5

FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

Third Quarter Fiscal 2010
(In millions)

	Feb. 28, 2010
	(Unaudited)			May 31, 2009
ASSETS
Current Assets
Cash and cash equivalents	$	1,549		$	2,292
Receivables, less allowances		3,937			3,391
Spare parts, supplies and fuel, less allowances		380			367
Deferred income taxes		517			511
Prepaid expenses and other		300			555
Total current assets		6,683			7,116
Property and Equipment, at Cost		30,675			29,260
Less accumulated depreciation and amortization		16,672			15,843
Net property and equipment		14,003			13,417
Other Long-Term Assets
Goodwill		2,229			2,229
Pension assets		833			311
Other assets		1,128			1,171
Total other long-term assets		4,190			3,711
	$	24,876		$	24,244
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current Liabilities
Current portion of long-term debt	$	283		$	653
Accrued salaries and employee benefits		959			861
Accounts payable		1,489			1,372
Accrued expenses		1,641			1,638
Total current liabilities		4,372			4,524
Long-Term Debt, Less Current Portion		1,668			1,930
Other Long-Term Liabilities
Deferred income taxes		1,384			1,071
Pension, postretirement healthcare and other benefit obligations		931			934
Self-insurance accruals		949			904
Deferred lease obligations		768			802
Deferred gains, principally related to aircraft transactions		274			289
Other liabilities		150			164
Total other long-term liabilities		4,456			4,164
Commitments and Contingencies
Common Stockholders’ Investment
Common stock, $0.10 par value, 800 million shares authorized		31			31
Additional paid-in capital		2,168			2,053
Retained earnings		13,546			12,919
Accumulated other comprehensive loss		(1,362	)		(1,373	)
Treasury stock, at cost		(3	)		(4	)
Total common stockholders’ investment		14,380			13,626
	$	24,876		$	24,244

6

FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS

Third Quarter Fiscal 2010
(In millions)
(Unaudited)

	Nine Months Ended
	February 28
	2010			2009
Operating Activities:
Net income	$	765		$	974
Noncash charges:
Depreciation and amortization		1,470			1,479
Other, net		363			277
Changes in operating assets and liabilities, net		(690	)		(509	)
Net cash provided by operating activities		1,908			2,221
Investing Activities:
Capital expenditures		(1,981	)		(1,987	)
Proceeds from asset dispositions and other		31			35
Net cash used in investing activities		(1,950	)		(1,952	)
Financing Activities:
Proceeds from debt issuance		—			1,000
Principal payments on debt		(632	)		(1	)
Dividends paid		(103	)		(103	)
Other, net		29			4
Net cash (used in) provided by financing activities		(706	)		900
Effect of exchange rate changes on cash		5			(35	)
Net (decrease) increase in cash and cash equivalents		(743	)		1,134
Cash and cash equivalents at beginning of period		2,292			1,539
Cash and cash equivalents at end of period	$	1,549		$	2,673

7

FEDEX EXPRESS SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Third Quarter Fiscal 2010
(Dollars in millions)
(Unaudited)

	Three Months Ended									Nine Months Ended
	February 28									February 28
	2010			2009			%			2010			2009			%
FINANCIAL HIGHLIGHTS
Revenue	$	5,440		$	5,050			8	%	$	15,678		$	17,567			(11	%)
Operating Expenses:
Salaries and employee benefits		2,136			2,064			3	%		6,215			6,252			(1	%)
Purchased transportation		292			241			21	%		830			871			(5	%)
Rentals and landing fees		397			400			(1	%)		1,178			1,220			(3	%)
Depreciation and amortization		254			241			5	%		757			721			5	%
Fuel		694			551			26	%		1,903			2,823			(33	%)
Maintenance and repairs		261			318			(18	%)		789			1,093			(28	%)
Intercompany charges		497			530			(6	%)		1,436			1,595			(10	%)
Other		644			660			(2	%)		1,856			2,062			(10	%)
Total Operating Expenses		5,175			5,005			3	%		14,964			16,637			(10	%)
Operating Income	$	265		$	45			489	%	$	714		$	930			(23	%)
Operating Margin		4.9	%		0.9	%	4.0 pts				4.6	%		5.3	%	(0.7 pts)
OPERATING STATISTICS
Operating Weekdays		62			63			(2	%)		190			190			—
AVG DAILY VOLUME / POUNDS
Average Daily Package Volume (000s):
U.S. Overnight Box		1,190			1,177			1	%		1,157			1,122			3	%
U.S. Overnight Envelope		601			622			(3	%)		608			621			(2	%)
U.S. Deferred		949			907			5	%		876			855			2	%
Total U.S. Domestic Package		2,740			2,706			1	%		2,641			2,598			2	%
International Priority		530			450			18	%		511			482			6	%
International Domestic		317			281			13	%		315			300			5	%
Total Average Daily Packages		3,587			3,437			4	%		3,467			3,380			3	%
Average Daily Freight Pounds (000s):
U.S.		7,906			7,664			3	%		7,217			7,431			(3	%)
International Priority		2,577			1,590			62	%		2,427			2,041			19	%
International Airfreight		1,184			1,251			(5	%)		1,230			1,575			(22	%)
Total Avg Daily Freight Pounds		11,667			10,505			11	%		10,874			11,047			(2	%)
YIELD
Revenue Per Package:
U.S. Overnight Box	$	19.16		$	19.02			1	%	$	18.73		$	22.24			(16	%)
U.S. Overnight Envelope		10.70			10.85			(1	%)		10.41			12.18			(15	%)
U.S. Deferred		11.77			11.94			(1	%)		11.53			13.44			(14	%)
Total U.S. Domestic Package		14.74			14.77			(0	%)		14.43			16.94			(15	%)
International Priority		53.23			53.12			0	%		52.59			59.89			(12	%)
International Domestic		7.22			6.63			9	%		7.12			7.81			(9	%)
Composite Package Yield	$	19.76		$	19.13			3	%	$	19.39		$	22.25			(13	%)
Revenue Per Freight Pound:
U.S.	$	1.07		$	1.08			(1	%)	$	1.07		$	1.22			(12	%)
International Priority		2.06			2.21			(7	%)		1.97			2.28			(14	%)
International Airfreight		0.84			0.88			(5	%)		0.79			1.04			(24	%)
Composite Freight Yield	$	1.26		$	1.23			2	%	$	1.24		$	1.39			(11	%)
Average Full-Time Equivalents (000s)		130			129			1	%		127			129			(2	%)

8

FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Third Quarter Fiscal 2010
(Dollars in millions)
(Unaudited)

	Three Months Ended									Nine Months Ended
	February 28									February 28
	2010			2009			%			2010			2009			%
FINANCIAL HIGHLIGHTS
Revenue	$	1,910		$	1,793			7	%	$	5,477		$	5,343			3	%
Operating Expenses:
Salaries and employee benefits		289			278			4	%		859			824			4	%
Purchased transportation		771			725			6	%		2,197			2,241			(2	%)
Rentals		63			58			9	%		184			167			10	%
Depreciation and amortization		83			85			(2	%)		251			246			2	%
Fuel		3			3			—			6			8			(25	%)
Maintenance and repairs		41			35			17	%		119			109			9	%
Intercompany charges		207			180			15	%		587			538			9	%
Other		195			233			(16	%)		569			606			(6	%)
Total Operating Expenses		1,652			1,597			3	%		4,772			4,739			1	%
Operating Income	$	258		$	196			32	%	$	705		$	604			17	%
Operating Margin		13.5	%		10.9	%	2.6 pts				12.9	%		11.3	%	1.6 pts
OPERATING STATISTICS
Operating Weekdays		62			63			(2	%)		190			190			—
Average Daily Package Volume (000s)
FedEx Ground		3,674			3,511			5	%		3,526			3,440			3	%
FedEx SmartPost		1,489			1,020			46	%		1,248			790			58	%
Yield (Revenue Per Package)
FedEx Ground	$	7.75		$	7.62			2	%	$	7.63		$	7.72			(1	%)
FedEx SmartPost	$	1.59		$	1.67			(5	%)	$	1.53		$	1.92			(20	%)

9

FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Third Quarter Fiscal 2010
(Dollars in millions)
(Unaudited)

	Three Months Ended									Nine Months Ended
	February 28									February 28
	2010			2009			%			2010			2009			%
FINANCIAL HIGHLIGHTS
Revenue	$	1,040		$	914			14	%	$	3,090		$	3,467			(11	%)
Operating Expenses:
Salaries and employee benefits		532			529			1	%		1,552			1,735			(11	%)
Purchased transportation		191			104			84	%		477			435			10	%
Rentals		29			34			(15	%)		85			102			(17	%)
Depreciation and amortization		49			59			(17	%)		150			166			(10	%)
Fuel		112			83			35	%		310			439			(29	%)
Maintenance and repairs		36			33			9	%		105			117			(10	%)
Intercompany charges1		99			29		NM				249			80		NM
Other		99			102			(3	%)		279			331			(16	%)
Total Operating Expenses		1,147			973			18	%		3,207			3,405			(6	%)
Operating (Loss) Income		($107	)		($59	)		(81	%)		($117	)	$	62			(289	%)
Operating Margin		(10.3	%)		(6.5	%)	(3.8 pts)				(3.8	%)		1.8	%	(5.6 pts)
OPERATING STATISTICS
LTL Operating Weekdays		61			62			(2	%)		188			188			—
LTL Shipments Per Day (000s)		83.4			66.0			26	%		79.1			76.4			4	%
Weight Per LTL Shipment (lbs)		1,133			1,121			1	%		1,124			1,129			(0	%)
LTL Revenue/CWT	$	16.82		$	18.21			(8	%)	$	17.24		$	19.46			(11	%)

1 —   During the first quarter of fiscal 2010, approximately 2,700 FedEx Freight segment employees were transferred to the FedEx Services segment. These employees represented the sales, marketing, IT, pricing, customer service, claims and credit and collection functions of the FedEx Freight segment. For 2010, the costs of these functions are being allocated to the FedEx Freight segment through intercompany charges. There is no net impact to the FedEx Freight segment operating income and margin.

10