10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED August 31, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                     TO                     

Commission File Number: 1-15829

FEDEX CORPORATION

(Exact name of registrant as specified in its charter)

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

(901) 818-7500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock	Outstanding Shares at September 17, 2014
Common Stock, par value $0.10 per share	283,246,379

FEDEX CORPORATION

INDEX

	PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets August  31, 2014 and May 31, 2014		2
Condensed Consolidated Statements of Income Three Months Ended August 31, 2014 and 2013		4
Condensed Consolidated Statements of Comprehensive Income Three Months Ended August 31, 2014 and 2013		5
Condensed Consolidated Statements of Cash Flows Three Months Ended August 31, 2014 and 2013		6
Notes to Condensed Consolidated Financial Statements		7
Report of Independent Registered Public Accounting Firm		23
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition		24
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk		46
ITEM 4. Controls and Procedures		46
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings		47
ITEM 1A. Risk Factors		47
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds		47
ITEM 6. Exhibits		47
Signature		49
Exhibit Index		E-1
Exhibit 10.1
Exhibit 10.2
Exhibit 12.1
Exhibit 15.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

- 1 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

	August 31,
	2014		May 31,
	(Unaudited)		2014
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,416	$	2,908
Receivables, less allowances of $170 and $164		5,487		5,460
Spare parts, supplies and fuel, less allowances of $216 and $212		481		463
Deferred income taxes		497		522
Prepaid expenses and other		369		330
Total current assets		9,250		9,683
PROPERTY AND EQUIPMENT, AT COST		40,866		40,691
Less accumulated depreciation and amortization		21,442		21,141
Net property and equipment		19,424		19,550
OTHER LONG-TERM ASSETS
Goodwill		2,775		2,790
Other assets		1,138		1,047
Total other long-term assets		3,913		3,837
	$	32,587	$	33,070

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 2 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE DATA)

	August 31,
	2014			May 31,
	(Unaudited)			2014
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	1		$	1
Accrued salaries and employee benefits		1,103			1,277
Accounts payable		1,973			1,971
Accrued expenses		2,076			2,063
Total current liabilities		5,153			5,312
LONG-TERM DEBT, LESS CURRENT PORTION		4,735			4,736
OTHER LONG-TERM LIABILITIES
Deferred income taxes		2,107			2,114
Pension, postretirement healthcare and other benefit obligations		3,313			3,484
Self-insurance accruals		1,047			1,038
Deferred lease obligations		748			758
Deferred gains, principally related to aircraft transactions		200			206
Other liabilities		163			145
Total other long-term liabilities		7,578			7,745
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS’ INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of August 31, 2014 and May 31, 2014		32			32
Additional paid-in capital		2,629			2,643
Retained earnings		20,921			20,429
Accumulated other comprehensive loss		(3,694	)		(3,694	)
Treasury stock, at cost		(4,767	)		(4,133	)
Total common stockholders’ investment		15,121			15,277
	$	32,587		$	33,070

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 3 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

	Three Months Ended August 31,
	2014			2013
REVENUES	$	11,684		$	11,024
OPERATING EXPENSES:
Salaries and employee benefits		4,189			4,077
Purchased transportation		2,054			1,879
Rentals and landing fees		660			640
Depreciation and amortization		651			639
Fuel		1,120			1,104
Maintenance and repairs		556			480
Other		1,467			1,410
		10,697			10,229
OPERATING INCOME		987			795
OTHER INCOME (EXPENSE):
Interest, net		(48	)		(27	)
Other, net		(2	)		(2	)
		(50	)		(29	)
INCOME BEFORE INCOME TAXES		937			766
PROVISION FOR INCOME TAXES		331			277
NET INCOME	$	606		$	489
EARNINGS PER COMMON SHARE:
Basic	$	2.13		$	1.54
Diluted	$	2.10		$	1.53
DIVIDENDS DECLARED PER COMMON SHARE	$	0.40		$	0.30

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 4 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN MILLIONS)

	Three Months Ended August 31,
	2014			2013
NET INCOME	$	606		$	489
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax of $9 in 2014 and $10 in 2013		(31	)		(79	)
Amortization of unrealized pension actuarial gains/losses and other, net of tax of $18 in 2014 and $25 in 2013		31			42
		—			(37	)
COMPREHENSIVE INCOME	$	606		$	452

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 5 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN MILLIONS)

	Three Months Ended August 31,
	2014			2013
Operating Activities:
Net income	$	606		$	489
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		651			639
Provision for uncollectible accounts		35			37
Stock-based compensation		48			45
Deferred income taxes and other noncash items		25			89
Changes in assets and liabilities:
Receivables		(86	)		10
Other assets		(30	)		(31	)
Accounts payable and other liabilities		(257	)		(343	)
Other, net		(10	)		(6	)
Cash provided by operating activities		982			929
Investing Activities:
Capital expenditures		(720	)		(572	)
Proceeds from asset dispositions and other		4			10
Cash used in investing activities		(716	)		(562	)
Financing Activities:
Proceeds from stock issuances		97			131
Excess tax benefit on the exercise of stock options		10			14
Dividends paid		(57	)		(48	)
Purchase of treasury stock		(791	)		(278	)
Cash used in financing activities		(741	)		(181	)
Effect of exchange rate changes on cash		(17	)		(7	)
Net (decrease) increase in cash and cash equivalents		(492	)		179
Cash and cash equivalents at beginning of period		2,908			4,917
Cash and cash equivalents at end of period	$	2,416		$	5,096

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 6 -

FEDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) General

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. These interim financial statements of FedEx Corporation (“FedEx”) have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission (“SEC”) instructions for interim financial information, and should be read in conjunction with our Annual Report on Form 10-K for the year ended May 31, 2014 (“Annual Report”). Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in our Annual Report.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly our financial position as of August 31, 2014, and the results of our operations and cash flows for the three-month periods ended August 31, 2014 and 2013. Operating results for the three-month period ended August 31, 2014 are not necessarily indicative of the results that may be expected for the year ending May 31, 2015.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2015 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. The pilots of Federal Express Corporation (“FedEx Express”), which represent a small number of FedEx Express’s total employees, are employed under a collective bargaining agreement. The contract became amendable in March 2013, and the parties are currently in negotiations. In addition to our pilots at FedEx Express, certain non-U.S. employees are unionized.

STOCK-BASED COMPENSATION. We have two types of equity-based compensation: stock options and restricted stock. The key terms of the stock option and restricted stock awards granted under our incentive stock plans and all financial disclosures about these programs are set forth in our Annual Report.

Our stock-based compensation expense was $48 million for the three-month period ended August 31, 2014 and $45 million for the three-month period ended August 31, 2013. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report.

RECENT ACCOUNTING GUIDANCE. New accounting rules and disclosure requirements can significantly impact our reported results and the comparability of our financial statements. These matters are described in our Annual Report.

We believe that no other new accounting guidance was adopted or issued during the first three months of 2015 that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on our financial reporting.

STOCK REPURCHASE PROGRAM AND DIVIDENDS. In 2014, our Board of Directors authorized a new share repurchase program of up to 32 million shares of common stock. Repurchases were made at the company’s discretion, based on ongoing assessments of the capital needs of the business, the market price of its common stock and general market conditions. During the first quarter of 2015, we repurchased 5.3 million shares of FedEx common stock at an average price of $148 per share for a total of $791 million. As of August 31, 2014, no shares remained under the existing share repurchase authorizations.

On August 15, 2014, our Board of Directors declared a quarterly dividend of $0.20 per share of common stock. The dividend will be paid on October 1, 2014 to stockholders of record as of the close of business on September 10, 2014. Each quarterly dividend payment is subject to review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis at the end of each fiscal year.

- 7 -

(2) Accumulated Other Comprehensive Income (Loss)

The following table provides changes in accumulated other comprehensive income (loss) (“AOCI”), net of tax, reported in our condensed consolidated financial statements for the three-month periods ended August 31 (in millions; amounts in parentheses indicate debits to AOCI):

	2014			2013
Foreign currency translation gain (loss):
Balance at beginning of period	$	77		$	102
Translation adjustments		(31	)		(79	)
Balance at end of period		46			23
Retirement plans adjustments:
Balance at beginning of period		(3,771	)		(3,922	)
Reclassifications from AOCI		31			42
Balance at end of period		(3,740	)		(3,880	)
Accumulated other comprehensive loss at end of period	$	(3,694	)	$	(3,857	)

The following table presents details of the reclassifications from AOCI for the three-month periods ended August 31 (in millions; amounts in parentheses indicate debits to earnings):

	Amount Reclassified from AOCI						Affected Line Item in the Income Statement
	2014			2013
Retirement plans:
Amortization of actuarial losses and other	$	(78	)	$	(95	)	Salaries and employee benefits
Amortization of prior service credits		29			28		Salaries and employee benefits
Total before tax		(49	)		(67	)
Income tax benefit		18			25		Provision for income taxes
AOCI reclassifications, net of tax	$	(31	)	$	(42	)	Net income

(3) Financing Arrangements

We have a shelf registration statement filed with the SEC that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock.

A $1 billion revolving credit facility is available to finance our operations and other cash flow needs and to provide support for the issuance of commercial paper. The revolving credit agreement expires in March 2018. The agreement contains a financial covenant, which requires us to maintain a leverage ratio of adjusted debt (long-term debt, including the current portion of such debt, plus six times our last four fiscal quarters’ rentals and landing fees) to capital (adjusted debt plus total common stockholders’ investment) that does not exceed 70%. Our leverage ratio of adjusted debt to capital was 58% at August 31, 2014. We believe the leverage ratio covenant is our only significant restrictive covenant in our revolving credit agreement. Our revolving credit agreement contains other

- 8 -

customary covenants that do not, individually or in the aggregate, materially restrict the conduct of our business. We are in compliance with the leverage ratio covenant and all other covenants of our revolving credit agreement and do not expect the covenants to affect our operations, including our liquidity or expected funding needs. As of August 31, 2014, no commercial paper was outstanding, and the entire $1 billion under the revolving credit facility was available for future borrowings.

Long-term debt, exclusive of capital leases, had a carrying value of $4.7 billion at August 31, 2014 and May 31, 2014, compared with an estimated fair value of $5.1 billion at August 31, 2014 and $5.0 billion at May 31, 2014. The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of our long-term debt is classified as Level 2 within the fair value hierarchy. This classification is defined as a fair value determined using market-based inputs other than quoted prices that are observable for the liability, either directly or indirectly.

(4) Computation of Earnings Per Share

The calculation of basic and diluted earnings per common share for the three-month periods ended August 31 was as follows (in millions, except per share amounts):

	2014		2013
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	605	$	489
Weighted-average common shares		285		316
Basic earnings per common share	$	2.13	$	1.54
Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	605	$	489
Weighted-average common shares		285		316
Dilutive effect of share-based awards		4		3
Weighted-average diluted shares		289		319
Diluted earnings per common share	$	2.10	$	1.53
Anti-dilutive options excluded from diluted earnings per common share		2.1		9.8

⁽¹⁾  Net earnings available to participating securities were immaterial in all periods presented.

(5) Retirement Plans

We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans and postretirement healthcare plans. Key terms of our retirement plans are provided in our Annual Report. Our retirement plans costs for the three-month periods ended August 31 were as follows (in millions):

	2014		2013
U.S. domestic and international pension plans	$	68	$	121
U.S. domestic and international defined contribution plans		94		89
U.S. domestic and international postretirement healthcare plans		20		20
	$	182	$	230

- 9 -

Net periodic benefit cost of the pension and postretirement healthcare plans for the three-month periods ended August 31 included the following components (in millions):

	Pension Plans						Postretirement Healthcare Plans
	2014			2013			2014		2013
Service cost	$	164		$	164		$	10	$	10
Interest cost		275			263			10		10
Expected return on plan assets		(420	)		(373	)		—		—
Recognized actuarial losses and other		49			67			—		—
	$	68		$	121		$	20	$	20

Contributions to our tax qualified U.S. domestic pension plans (“U.S. Pension Plans”) for the three-month periods ended August 31 were as follows:

	2014		2013
Required	$	82	$	150
Voluntary		83		15
	$	165	$	165

In September 2014, we made an additional required contribution of $165 million to our U.S. Pension Plans. Our U.S. Pension Plans have ample funds to meet expected benefit payments.

(6) Business Segment Information

We provide a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively under the respected FedEx brand. Our primary operating companies include FedEx Express, the world’s largest express transportation company; FedEx Ground Package System, Inc. (“FedEx Ground”), a leading North American provider of small-package ground delivery services; and FedEx Freight, Inc. (“FedEx Freight”), a leading U.S. provider of less-than-truckload (“LTL”) freight services.

Our reportable segments include the following businesses:

FedEx Express Segment	FedEx Express (express transportation)
	FedEx Trade Networks (air and ocean freight forwarding and customs brokerage)
	FedEx SupplyChain Systems (logistics services)
FedEx Ground Segment	FedEx Ground (small-package ground delivery)
	FedEx SmartPost (small-parcel consolidator)
FedEx Freight Segment	FedEx Freight (LTL freight transportation)
	FedEx Custom Critical (time-critical transportation)
FedEx Services Segment	FedEx Services (sales, marketing, information technology, communications and back-office functions)
	FedEx TechConnect (customer service, technical support, billings and collections)
	FedEx Office (document and business services and package acceptance)

- 10 -

FedEx Services Segment

The FedEx Services segment operates combined sales, marketing, administrative and information technology functions in shared services operations that support our transportation businesses and allow us to obtain synergies from the combination of these functions. For the international regions of FedEx Express, some of these functions are performed on a regional basis by FedEx Express and reported in the FedEx Express segment in their natural expense line items.

The FedEx Services segment provides direct and indirect support to our transportation businesses, and we allocate all of the net operating costs of the FedEx Services segment (including the net operating results of FedEx Office) to reflect the full cost of operating our transportation businesses in the results of those segments. Within the FedEx Services segment allocation, the net operating results of FedEx Office, which are an immaterial component of our allocations, are allocated to FedEx Express and FedEx Ground. We review and evaluate the performance of our transportation segments based on operating income (inclusive of FedEx Services segment allocations). For the FedEx Services segment, performance is evaluated based on the impact of its total allocated net operating costs on our transportation segments.

Operating expenses for each of our transportation segments include the allocations from the FedEx Services segment to the respective transportation segments. These allocations also include charges and credits for administrative services provided between operating companies. The allocations of net operating costs are based on metrics such as relative revenues or estimated services provided. We believe these allocations approximate the net cost of providing these functions and our allocation methodologies are refined as necessary to reflect changes in our businesses.

During the first quarter of 2015, we ceased allocating to our transportation segments the costs associated with our corporate headquarters division. These costs included services related to general oversight functions, including executive officers and certain legal and finance functions. This change allows for additional transparency and improved management of our corporate oversight costs. Beginning in 2015, these costs are included in “Corporate, eliminations and other” in our segment reporting and reconciliations. Prior year amounts have been revised to conform to the current year segment presentation. This change did not impact our condensed consolidated financial statements included in Note 10.

Other Intersegment Transactions

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment. Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenues of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenues and expenses are eliminated in our consolidated results and are not separately identified in the following segment information, because the amounts are not material.

- 11 -

The following table provides a reconciliation of reportable segment revenues and operating income to our unaudited condensed consolidated financial statement totals for the three-month periods ended August 31 (in millions):

	2014			2013
Revenues
FedEx Express segment	$	6,862		$	6,605
FedEx Ground segment		2,960			2,730
FedEx Freight segment		1,609			1,424
FedEx Services segment		374			375
Eliminations and other		(121	)		(110	)
	$	11,684		$	11,024
Operating Income
FedEx Express segment (1)	$	369		$	273
FedEx Ground segment(1)		545			483
FedEx Freight segment (1)		168			99
Corporate, eliminations and other(1)		(95	)		(60	)
	$	987		$	795

⁽¹⁾ Prior year amounts have been revised to conform to the current year segment presentation regarding the allocation of corporate headquarters costs.

(7) Commitments

As of August 31, 2014, our purchase commitments under various contracts for the remainder of 2015 and annually thereafter were as follows (in millions):

	Aircraft and Aircraft-Related		Other(1)		Total
2015 (remainder)	$	995	$	1,006	$	2,001
2016		1,244		319		1,563
2017		959		171		1,130
2018		1,341		94		1,435
2019		860		55		915
Thereafter		4,461		102		4,563
Total	$	9,860	$	1,747	$	11,607

⁽¹⁾  Primarily equipment, advertising contracts and, for the remainder of 2015, $495 million of quarterly contributions to our U.S. Pension Plans.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of August 31, 2014, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and nine Boeing 777 Freighter (“B777F”) aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act of 1926, as amended. Commitments to purchase aircraft in passenger configuration do not include the attendant costs to modify these aircraft for cargo transport unless we have entered into noncancelable commitments to modify such aircraft. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

- 12 -

We had $519 million in deposits and progress payments as of August 31, 2014 on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our consolidated balance sheets. In addition to our commitment to purchase B777Fs and B767Fs, our aircraft purchase commitments include the Boeing 757 (“B757”) aircraft in passenger configuration, which will require additional costs to modify for cargo transport. Aircraft and aircraft-related contracts are subject to price escalations. The following table is a summary of the key aircraft we are committed to purchase as of August 31, 2014 with the year of expected delivery:

	B757		B767F		B777F		Total
2015 (remainder)		7		12		—		19
2016		—		11		2		13
2017		—		11		—		11
2018		—		10		2		12
2019		—		4		2		6
Thereafter		—		—		12		12
Total		7		48		18		73

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at August 31, 2014 is as follows (in millions):

	Operating Leases
	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2015 (remainder)	$	408	$	1,207	$	1,615
2016		453		1,536		1,989
2017		392		1,625		2,017
2018		326		1,203		1,529
2019		273		1,028		1,301
Thereafter		550		6,542		7,092
Total	$	2,402	$	13,141	$	15,543

Future minimum lease payments under capital leases were immaterial at August 31, 2014. While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations.

(8) Contingencies

Wage-and-Hour. We are a defendant in a number of lawsuits containing various class-action allegations of wage-and-hour violations. The plaintiffs in these lawsuits allege, among other things, that they were forced to work “off the clock,” were not paid overtime or were not provided work breaks or other benefits. The complaints generally seek unspecified monetary damages, injunctive relief, or both. We do not believe that a material loss is reasonably possible with respect to any of these matters.

Independent Contractor — Lawsuits and State Administrative Proceedings. FedEx Ground is involved in numerous class-action lawsuits (including 26 that have been certified as class actions), individual lawsuits and state tax and other administrative proceedings that claim that the company’s owner-operators should be treated as employees, rather than independent contractors.

- 13 -

Most of the class-action lawsuits were consolidated for administration of the pre-trial proceedings by a single federal court, the U.S. District Court for the Northern District of Indiana. The multidistrict litigation court granted class certification in 28 cases and denied it in 14 cases. On December 13, 2010, the court entered an opinion and order addressing all outstanding motions for summary judgment on the status of the owner-operators (i.e., independent contractor vs. employee). In sum, the court ruled on our summary judgment motions and entered judgment in favor of FedEx Ground on all claims in 20 of the 28 multidistrict litigation cases that had been certified as class actions, finding that the owner-operators in those cases were contractors as a matter of the law of 20 states. The plaintiffs filed notices of appeal in all of these 20 cases. The Seventh Circuit heard the appeal in the Kansas case in January 2012 and, in July 2012, issued an opinion that did not make a determination with respect to the correctness of the district court’s decision and, instead, certified two questions to the Kansas Supreme Court related to the classification of the plaintiffs as independent contractors under the Kansas Wage Payment Act. The Kansas Supreme Court heard oral argument on November 5, 2013. The other 19 cases that are before the Seventh Circuit remain stayed pending a decision of the Kansas Supreme Court.

The multidistrict litigation court remanded the other eight certified class actions back to the district courts where they were originally filed because its summary judgment ruling did not completely dispose of all of the claims in those lawsuits. Four of the cases remain pending in their respective district courts, but three of these four matters settled for immaterial amounts. The courts have granted final approval of two of the three settlements, while the other settlement remains subject to court approval. One of the cases is on appeal with the Court of Appeals for the Eleventh Circuit. The other three cases, which had been decided in our favor by the respective district courts in Oregon and California, were appealed to the Ninth Circuit Court of Appeals.

On August 27, 2014, the Ninth Circuit reversed the district court decisions and held that the plaintiffs in California and Oregon were employees as a matter of law. While we do not agree with the court’s decision and will ask the court to reconsider and petition for en banc review by the full Ninth Circuit Court of Appeals, during the first quarter of 2015 we established an accrual for the estimated probable loss in this case that was required to be recognized pursuant to applicable accounting standards. This amount was immaterial. Material exposure above the accrued amount, however, is reasonably possible, and accordingly we have undertaken a process to attempt to estimate a range of reasonably possible loss based on currently available information relating to the case. This process has included attempting to evaluate what facts may arise in the course of discovery and what legal rulings the courts may render and how these facts and rulings might impact FedEx Ground’s loss. For a number of reasons, we are not currently able to estimate a range of reasonably possible loss in excess of the amount accrued. The number and identities of plaintiffs in these lawsuits are uncertain, as they are dependent on how the class of full-time drivers is defined and how many individuals will qualify based on whatever criteria may be established. In addition, the parties have conducted only very limited discovery into damages, which could vary considerably from plaintiff to plaintiff and be dependent on evidence pertaining to individual plaintiffs, which has yet to be produced in the case. Further, the range of potential loss could be impacted substantially by future rulings by the courts, including on the merits of the claims, on FedEx Ground’s defenses, and on evidentiary issues.

With respect to the matters that are pending outside of the Ninth Circuit, it is reasonably possible that potential loss in some of these lawsuits or changes to the independent contractor status of FedEx Ground’s owner-operators could be material. We have undertaken a process to attempt to estimate a range of reasonably possible loss based on currently available information relating to these cases. Similar to our analysis of loss contingency in the Ninth Circuit cases, this process has included attempting to evaluate what facts may arise in the course of discovery and what legal rulings the courts may render and how these facts and rulings might impact FedEx Ground’s loss. As a consequence of many of the same factors described above, as well as others that are specific to these cases, we are not currently able to estimate a range of reasonably possible loss. We do not believe that a material loss is probable in these matters.

In addition, we are defending contractor-model cases that are not or are no longer part of the multidistrict litigation. These cases are in varying stages of litigation, and we do not expect to incur a material loss in any of these matters.

- 14 -

Adverse determinations in matters related to FedEx Ground’s independent contractors, could, among other things, entitle certain of our owner-operators and their drivers to the reimbursement of certain expenses and to the benefit of wage-and-hour laws and result in employment and withholding tax and benefit liability for FedEx Ground, and could result in changes to the independent contractor status of FedEx Ground’s owner-operators in certain jurisdictions. We believe that FedEx Ground’s owner-operators are properly classified as independent contractors and that FedEx Ground is not an employer of the drivers of the company’s independent contractors.

City and State of New York Cigarette Suit. On December 30, 2013, the City of New York filed suit against FedEx Express and FedEx Ground arising from our alleged shipments of cigarettes to New York City residents. The claims against FedEx Express were subsequently dismissed. On March 30, 2014, the complaint was amended adding the State of New York as a plaintiff. Beyond the addition of the State as a plaintiff, the amended complaint contains several amplifications of the previous claims. First, the claims now relate to four shippers, none of which continues to ship in our network. Second, the amended complaint contains a count for violation of the Assurance of Compliance (“AOC”) we had previously entered into with the State of New York, claiming that since 2006, FedEx has made shipments of cigarettes to residences in New York in violation of the AOC. Lastly, the amendment contains new theories of Racketeer Influenced and Corrupt Organizations Act violations. In May 2014, we filed a motion to dismiss almost all of the claims. Loss in this matter is reasonably possible, but the amount of any loss is expected to be immaterial.

Environmental Matters. SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that management reasonably believes could exceed $100,000.

In February 2014, FedEx Ground received oral communications from District Attorneys’ Offices (representing California’s county environmental authorities) and the California Attorney General’s Office (representing the California Division of Toxic Substances Control) that they were seeking civil penalties for alleged violations of the state’s hazardous waste regulations. Specifically, the California environmental authorities alleged that FedEx Ground improperly generates and/or handles, stores and transports hazardous waste from its stations to its hubs in California. In April 2014, FedEx Ground filed a declaratory judgment action in the United States District Court for the Eastern District of California against the Director of the California Division of Toxic Substances Control and the county District Attorneys with whom we have been negotiating. In June 2014, the California Attorney General filed a complaint against FedEx Ground in Sacramento County Superior Court alleging violations of FedEx Ground as described above. The County District Attorneys filed a similar complaint in Sacramento County Superior Court in July 2014. Loss in this matter is reasonably possible, however, the amount of any loss is expected to be immaterial.

On January 14, 2014, the U.S. Department of Justice (“DOJ”) issued a Grand Jury Subpoena to FedEx Express relating to an asbestos matter previously investigated by the U.S. Environmental Protection Agency. On May 1, 2014, the DOJ informed us that it had determined to continue to pursue the matter as a criminal case, citing seven asbestos-related regulatory violations associated with removal of roof materials from a hangar in Puerto Rico during cleaning and repair activity, as well as violation of waste disposal requirements. Loss is reasonably possible; however, the amount of any loss is expected to be immaterial.

Department of Justice Indictment – Internet Pharmacy Shipments. In the past, we received requests for information from the DOJ in the Northern District of California in connection with a criminal investigation relating to the transportation of packages for online pharmacies that may have shipped pharmaceuticals in violation of federal law. In July 2014, the DOJ filed a criminal indictment in the United States District Court for the Northern District of California in connection with the matter. A superseding indictment was filed in August 2014. The indictment alleges that FedEx Corporation, FedEx Express and FedEx Services, together with certain pharmacies, conspired to unlawfully distribute controlled substances, unlawfully distributed controlled substances and conspired to unlawfully distribute misbranded drugs. The superseding indictment adds conspiracy to launder money counts related to services provided to and payments from online pharmacies. We continue to believe that our employees have acted in good faith at all times and that we have not engaged in any illegal activities.

- 15 -

Accordingly, we will vigorously defend ourselves in this matter. If we are convicted, remedies could include fines, penalties, forfeiture and compliance conditions. Given the early stage of this proceeding, we cannot estimate the amount or range of loss, if any; however, it is reasonably possible that it could be material if we are convicted.

Other Matters. In August 2010, a third-party consultant who works with shipping customers to negotiate lower rates filed a lawsuit in federal district court in California against FedEx and United Parcel Service, Inc. (“UPS”) alleging violations of U.S. antitrust law. This matter was dismissed in May 2011, but the court granted the plaintiff permission to file an amended complaint, which FedEx received in June 2011. In November 2011, the court granted our motion to dismiss this complaint, but again allowed the plaintiff to file an amended complaint. The plaintiff filed a new complaint in December 2011, and the matter remains pending before the court. In February 2011, shortly after the initial lawsuit was filed, we received a demand for the production of information and documents in connection with a civil investigation by the DOJ into the policies and practices of FedEx and UPS for dealing with third-party consultants who work with shipping customers to negotiate lower rates. In November 2012, the DOJ served a civil investigative demand on the third-party consultant seeking all pleadings, depositions and documents produced in the lawsuit. We are cooperating with the investigation, do not believe that we have engaged in any anti-competitive activities and will vigorously defend ourselves in any action that may result from the investigation. While the litigation proceedings and the DOJ investigation move forward, and the amount of loss, if any, is dependent on a number of factors that are not yet fully developed or resolved, the amount of any loss is expected to be immaterial.

On June 30, 2014, we received a Statement of Objections from the French Competition Authority (“FCA”) addressed to FedEx Express France, formerly known as TATEX, regarding an investigation by the FCA into anticompetitive behavior that is alleged to have occurred primarily in the framework of trade association meetings that included the former general managers of TATEX prior to our acquisition of that company in July 2012. Given the early stage of this matter, we cannot yet determine the amount or range of potential loss; however, it is reasonably possible that it could be material.

FedEx and its subsidiaries are subject to other legal proceedings that arise in the ordinary course of their business. In the opinion of management, the aggregate liability, if any, with respect to these other actions will not have a material adverse effect on our financial position, results of operations or cash flows.

(9) Supplemental Cash Flow Information

Cash paid for interest expense and income taxes for the three-month periods ended August 31 was as follows (in millions):

	2014			2013
Cash payments for:
Interest (net of capitalized interest)	$	96		$	57
Income taxes	$	190		$	138
Income tax refunds received		(2	)		(34	)
Cash tax payments (refunds), net	$	188		$	104

- 16 -

(10) Condensed Consolidating Financial Statements

We are required to present condensed consolidating financial information in order for the subsidiary guarantors (other than FedEx Express) of our public debt to continue to be exempt from reporting under the Securities Exchange Act of 1934, as amended.

The guarantor subsidiaries, which are wholly owned by FedEx, guarantee $4.5 billion of our debt. The guarantees are full and unconditional and joint and several. Our guarantor subsidiaries were not determined using geographic, service line or other similar criteria, and as a result, the “Guarantor Subsidiaries” and “Non-guarantor Subsidiaries” columns each include portions of our domestic and international operations. Accordingly, this basis of presentation is not intended to present our financial condition, results of operations or cash flows for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting.

- 17 -

CONDENSED CONSOLIDATING BALANCE SHEETS

(UNAUDITED)

August 31, 2014

Condensed consolidating financial statements for our guarantor subsidiaries and non-guarantor subsidiaries are presented in the following tables (in millions):

	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,305	$	430	$	821	$	(140	)	$	2,416
Receivables, less allowances		—		4,341		1,177		(31	)		5,487
Spare parts, supplies, fuel, prepaid expenses and other, less allowances		34		750		66		—			850
Deferred income taxes		—		474		23		—			497
Total current assets		1,339		5,995		2,087		(171	)		9,250
PROPERTY AND EQUIPMENT, AT COST		28		38,489		2,349		—			40,866
Less accumulated depreciation and amortization		22		20,182		1,238		—			21,442
Net property and equipment		6		18,307		1,111		—			19,424
INTERCOMPANY RECEIVABLE		—		1,177		1,409		(2,586	)		—
GOODWILL		—		1,552		1,223		—			2,775
INVESTMENT IN SUBSIDIARIES		21,352		3,679		—		(25,031	)		—
OTHER ASSETS		2,069		850		240		(2,021	)		1,138
	$	24,766	$	31,560	$	6,070	$	(29,809)		$	32,587
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	—	$	1	$	—	$	—		$	1
Accrued salaries and employee benefits		32		915		156		—			1,103
Accounts payable		63		1,398		683		(171	)		1,973
Accrued expenses		502		1,384		190		—			2,076
Total current liabilities		597		3,698		1,029		(171	)		5,153
LONG-TERM DEBT, LESS CURRENT PORTION		4,486		249		—		—			4,735
INTERCOMPANY PAYABLE		2,586		—		—		(2,586	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		4,042		86		(2,021	)		2,107
Other liabilities		1,976		3,238		257		—			5,471
Total other long-term liabilities		1,976		7,280		343		(2,021	)		7,578
STOCKHOLDERS’ INVESTMENT		15,121		20,333		4,698		(25,031	)		15,121
	$	24,766	$	31,560	$	6,070	$	(29,809	)	$	32,587

- 18 -

CONDENSED CONSOLIDATING BALANCE SHEETS

May 31, 2014

	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,756	$	441	$	861	$	(150	)	$	2,908
Receivables, less allowances		2		4,338		1,151		(31	)		5,460
Spare parts, supplies, fuel, prepaid expenses and other, less allowances		59		674		60		—			793
Deferred income taxes		—		501		21		—			522
Total current assets		1,817		5,954		2,093		(181	)		9,683
PROPERTY AND EQUIPMENT, AT COST		28		38,303		2,360		—			40,691
Less accumulated depreciation and amortization		22		19,899		1,220		—			21,141
Net property and equipment		6		18,404		1,140		—			19,550
INTERCOMPANY RECEIVABLE		—		1,058		1,265		(2,323	)		—
GOODWILL		—		1,552		1,238		—			2,790
INVESTMENT IN SUBSIDIARIES		20,785		3,754		—		(24,539	)		—
OTHER ASSETS		2,088		747		250		(2,038	)		1,047
	$	24,696	$	31,469	$	5,986	$	(29,081	)	$	33,070
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	—	$	1	$	—	$	—		$	1
Accrued salaries and employee benefits		55		1,042		180		—			1,277
Accounts payable		2		1,530		620		(181	)		1,971
Accrued expenses		405		1,444		214		—			2,063
Total current liabilities		462		4,017		1,014		(181	)		5,312
LONG-TERM DEBT, LESS CURRENT PORTION		4,487		249		—		—			4,736
INTERCOMPANY PAYABLE		2,323		—		—		(2,323	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		4,059		93		(2,038	)		2,114
Other liabilities		2,147		3,230		254		—			5,631
Total other long-term liabilities		2,147		7,289		347		(2,038	)		7,745
STOCKHOLDERS’ INVESTMENT		15,277		19,914		4,625		(24,539	)		15,277
	$	24,696	$	31,469	$	5,986	$	(29,081	)	$	33,070

- 19 -

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended August 31, 2014

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated
REVENUES	$	—		$	9,769		$	2,004	$	(89	)	$	11,684
OPERATING EXPENSES:
Salaries and employee benefits		30			3,606			553		—			4,189
Purchased transportation		—			1,386			711		(43	)		2,054
Rentals and landing fees		1			572			88		(1	)		660
Depreciation and amortization		—			595			56		—			651
Fuel		—			1,095			25		—			1,120
Maintenance and repairs		—			522			34		—			556
Intercompany charges, net		(95	)		2			93		—			—
Other		64			1,165			283		(45	)		1,467
		—			8,943			1,843		(89	)		10,697
OPERATING INCOME		—			826			161		—			987
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		606			98			—		(704	)		—
Interest, net		(53	)		4			1		—			(48	)
Intercompany charges, net		54			(59	)		5		—			—
Other, net		(1	)		(3	)		2		—			(2	)
INCOME BEFORE INCOME TAXES		606			866			169		(704	)		937
Provision for income taxes		—			269			62		—			331
NET INCOME	$	606		$	597		$	107	$	(704	)	$	606
COMPREHENSIVE INCOME	$	634		$	594		$	82	$	(704	)	$	606

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended August 31, 2013

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated
REVENUES	$	—		$	9,228		$	1,878	$	(82	)	$	11,024
OPERATING EXPENSES:
Salaries and employee benefits		31			3,514			532		—			4,077
Purchased transportation		—			1,242			673		(36	)		1,879
Rentals and landing fees		1			558			82		(1	)		640
Depreciation and amortization		—			589			50		—			639
Fuel		—			1,081			23		—			1,104
Maintenance and repairs		—			449			31		—			480
Intercompany charges, net		(61	)		(6	)		67		—			—
Other		29			1,133			293		(45	)		1,410
		—			8,560			1,751		(82	)		10,229
OPERATING INCOME		—			668			127		—			795
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		489			110			—		(599	)		—
Interest, net		(34	)		5			2		—			(27	)
Intercompany charges, net		35			(41	)		6		—			—
Other, net		(1	)		(2	)		1		—			(2	)
INCOME BEFORE INCOME TAXES		489			740			136		(599	)		766
Provision for income taxes		—			232			45		—			277
NET INCOME	$	489		$	508		$	91	$	(599	)	$	489
COMPREHENSIVE INCOME	$	528		$	507		$	16	$	(599	)	$	452

- 20 -

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended August 31, 2014

	Parent			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	(67	)	$	934		$	105		$	10		$	982
INVESTING ACTIVITIES
Capital expenditures		(1	)		(688	)		(31	)		—			(720	)
Proceeds from asset dispositions and other		—			7			(3	)		—			4
CASH USED IN INVESTING ACTIVITIES		(1	)		(681	)		(34	)		—			(716	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		358			(366	)		8			—			—
Payment on loan between subsidiaries		—			103			(103	)		—			—
Intercompany dividends		—			2			(2	)		—			—
Proceeds from stock issuances		97			—			—			—			97
Excess tax benefit on the exercise of stock options		10			—			—			—			10
Dividends paid		(57	)		—			—			—			(57	)
Purchase of treasury stock		(791	)		—			—			—			(791	)
Other, net		—			(1	)		1			—			—
CASH USED IN FINANCING ACTIVITIES		(383	)		(262	)		(96	)		—			(741	)
Effect of exchange rate changes on cash		—			(2	)		(15	)		—			(17	)
Net (decrease) increase in cash and cash equivalents		(451	)		(11	)		(40	)		10			(492	)
Cash and cash equivalents at beginning of period		1,756			441			861			(150	)		2,908
Cash and cash equivalents at end of period	$	1,305		$	430		$	821		$	(140	)	$	2,416

- 21 -

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended August 31, 2013

	Parent			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	118		$	773		$	57		$	(19	)	$	929
INVESTING ACTIVITIES
Capital expenditures		—			(464	)		(108	)		—			(572	)
Proceeds from asset dispositions and other		—			10			—			—			10
CASH USED IN INVESTING ACTIVITIES		—			(454	)		(108	)		—			(562	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		229			(261	)		32			—			—
Payment on loan between subsidiaries		—			(29	)		29			—			—
Intercompany dividends		—			2			(2	)		—			—
Proceeds from stock issuances		131			—			—			—			131
Excess tax benefit on the exercise of stock options		14			—			—			—			14
Dividends paid		(48	)		—			—			—			(48	)
Purchase of treasury stock		(278	)		—			—			—			(278	)
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		48			(288	)		59			—			(181	)
Effect of exchange rate changes on cash		—			(5	)		(2	)		—			(7	)
Net increase (decrease) in cash and cash equivalents		166			26			6			(19	)		179
Cash and cash equivalents at beginning of period		3,892			405			717			(97	)		4,917
Cash and cash equivalents at end of period	$	4,058		$	431		$	723		$	(116	)	$	5,096

- 22 -

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

FedEx Corporation

We have reviewed the condensed consolidated balance sheet of FedEx Corporation as of August 31, 2014, and the related condensed consolidated statements of income, comprehensive income and cash flows for the three-month periods ended August 31, 2014 and 2013. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of FedEx Corporation as of May 31, 2014, and the related consolidated statements of income, comprehensive income, changes in stockholders’ investment, and cash flows for the year then ended not presented herein, and in our report dated July 14, 2014, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of May 31, 2014, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Memphis, Tennessee

September 18, 2014

- 23 -

Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition

GENERAL

The following Management’s Discussion and Analysis of Results of Operations and Financial Condition (“MD&A”) describes the principal factors affecting the results of operations, liquidity, capital resources, contractual cash obligations and critical accounting estimates of FedEx Corporation (“FedEx”). This discussion should be read in conjunction with the accompanying quarterly unaudited condensed consolidated financial statements and our Annual Report on Form 10-K for the year ended May 31, 2014 (“Annual Report”). Our Annual Report includes additional information about our significant accounting policies, practices and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties associated with our financial condition and operating results.

We provide a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the respected FedEx brand. Our primary operating companies are Federal Express Corporation (“FedEx Express”), the world’s largest express transportation company; FedEx Ground Package System, Inc. (“FedEx Ground”), a leading North American provider of small-package ground delivery services; and FedEx Freight, Inc. (“FedEx Freight”), a leading U.S. provider of less-than-truckload (“LTL”) freight services. These companies represent our major service lines and, along with FedEx Corporate Services, Inc. (“FedEx Services”), form the core of our reportable segments.

Our FedEx Services segment provides sales, marketing, information technology, communications and certain back-office support to our transportation segments. In addition, the FedEx Services segment provides customers with retail access to FedEx Express and FedEx Ground shipping services through FedEx Office and Print Services, Inc. (“FedEx Office”) and provides customer service, technical support and billing and collection services through FedEx TechConnect, Inc. (“FedEx TechConnect”). See “Reportable Segments” for further discussion. Additional information on our businesses can also be found in our Annual Report.

The key indicators necessary to understand our operating results include:

• the overall customer demand for our various services based on macro-economic factors and the global economy;

• the volumes of transportation services provided through our networks, primarily measured by our average daily volume and shipment weight;

• the mix of services purchased by our customers;

• the prices we obtain for our services, primarily measured by yield (revenue per package or pound or revenue per hundredweight and shipment for LTL freight shipments);

• our ability to manage our cost structure (capital expenditures and operating expenses) to match shifting volume levels; and

• the timing and amount of fluctuations in fuel prices and our ability to offset these fluctuations through our fuel surcharges.

The majority of our operating expenses are directly impacted by revenue and volume levels. Accordingly, we expect these operating expenses to fluctuate on a year-over-year basis consistent with the change in revenues and volumes. Therefore, the discussion of operating expense captions focuses on the key drivers and trends impacting expenses other than changes in revenues and volume. The line item “Other operating expenses” predominantly includes costs associated with outside service contracts (such as security, facility services and cargo handling), professional fees, insurance, uniforms and advertising.

- 24 -

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2015 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year. References to our transportation segments include, collectively, our FedEx Express, FedEx Ground and FedEx Freight segments.

RESULTS OF OPERATIONS

CONSOLIDATED RESULTS

The following table compares summary operating results (dollars in millions, except per share amounts) for the three-month periods ended August 31:

	2014			2013			Percent Change
Revenues	$	11,684		$	11,024			6
Operating income		987			795			24
Operating margin		8.5	%		7.2	%		130	bp
Net income	$	606		$	489			24
Diluted earnings per share	$	2.10		$	1.53			37

The following table shows changes in revenues and operating income by reportable segment for the three-month periods ended August 31, 2014 compared to August 31, 2013 (dollars in millions):

	Revenues					Operating Income
	Dollar Change			Percent Change		Dollar Change			Percent Change
FedEx Express segment	$	257			4	$	96			35
FedEx Ground segment		230			8		62			13
FedEx Freight segment		185			13		69			70
FedEx Services segment		(1	)		—		—			—
Corporate, eliminations and other		(11	)		10		(35	)		58
	$	660			6	$	192			24

Overview

Our results for the first quarter of 2015 were strong as revenue growth in each of our transportation segments from increased volumes and yields drove a significant increase in earnings. Our results for the quarter were positively impacted by lower pension expense and the impact of the benefits from the profit improvement programs commenced in 2013. These factors were partially offset by higher aircraft maintenance expense due to the timing of aircraft engine maintenance events.

In the first quarter of 2015, we repurchased an aggregate of $791 million of our common stock through open market purchases as part of the share repurchase program announced in 2014. The existing share repurchase program was completed in the first quarter of 2015 and had a $0.15 year-over-year positive impact on the first quarter earnings per diluted share. See additional information on the share repurchase program in Note 1 of the accompanying unaudited condensed consolidated financial statements.

- 25 -

The following graphs for FedEx Express, FedEx Ground and FedEx Freight show selected volume trends (in thousands) over the five most recent quarters:

⁽¹⁾  International domestic average daily package volume represents our international intra-country express operations.

- 26 -

The following graphs for FedEx Express, FedEx Ground and FedEx Freight show selected yield trends over the five most recent quarters:

Revenue

Revenues increased 6% during the first quarter of 2015 due to improved performance at all our transportation segments. At FedEx Express, revenues increased 4% in the first quarter of 2015 due to volume and yield growth in our U.S. and international export package business partially offset by lower freight revenue. At FedEx Ground, revenues increased 8% in the first quarter of 2015 due to higher volume from continued growth in both our FedEx Home Delivery service and commercial business, as well as increased yields primarily resulting from rate increases. Revenues at FedEx Freight increased 13% during the first quarter of 2015 primarily due to higher average daily LTL shipments and revenue per LTL shipment.

- 27 -

Operating Income

The following table compares operating expenses expressed as dollar amounts (in millions) and as a percent of revenue for the three-month periods ended August 31:

					Percent of Revenue
	2014		2013		2014			2013
Operating expenses:
Salaries and employee benefits	$	4,189	$	4,077		35.8	%		37.0	%
Purchased transportation		2,054		1,879		17.6			17.0
Rentals and landing fees		660		640		5.6			5.8
Depreciation and amortization		651		639		5.6			5.8
Fuel		1,120		1,104		9.6			10.1
Maintenance and repairs		556		480		4.8			4.3
Other		1,467		1,410		12.5			12.8
Total operating expenses	$	10,697	$	10,229		91.5			92.8
Operating margin						8.5	%		7.2	%

Operating income increased in the first quarter of 2015 primarily as a result of higher volumes and increased yields at FedEx Express, improved revenue per shipment and volumes at FedEx Freight, and increased yields and higher volumes at FedEx Ground. Results in the first quarter include benefits from lower pension expense and our profit improvement programs, which we commenced in 2013. These benefits were partially offset by higher aircraft maintenance expense due to the timing of engine maintenance events at FedEx Express.

Operating expenses in the first quarter of 2015 included an increase of 9% in purchased transportation costs due to volume growth and higher rates at FedEx Ground, higher utilization of third-party transportation providers and higher rates at FedEx Freight, higher utilization of third-party transportation providers at FedEx Express and the expansion of our freight-forwarding business at FedEx Trade Networks. Salaries and employee benefits expense increased 3% due to additional staffing to support volume growth, partially offset by lower pension expense and the positive impact of our voluntary buyout program. Maintenance and repairs expense increased 16% in the first quarter of 2015 due to the timing of aircraft engine maintenance events at FedEx Express. Other operating expenses increased 4% in the first quarter of 2015 primarily due to a legal reserve recorded in connection with the multi-district litigation matter described in Note 8. This amount was recorded in the results of our corporate headquarters division and was not allocated to our transportation segments.

- 28 -

Fuel

The following graph for our transportation segments shows our average cost of jet and vehicle fuel per gallon for the five most recent quarters:

Fuel expense increased 1% in the first quarter of 2015 due to higher aircraft fuel prices and usage. However, fuel prices represent only one component of the two factors we consider meaningful in understanding the impact of fuel on our business. Consideration must also be given to the fuel surcharge revenue we collect. Because our fuel surcharges are indexed and intended to offset fuel price fluctuations in the pricing of our services, we believe discussion of the net impact of fuel on our results, which is a comparison of the year-over-year change in these two factors, is important to understand the impact of fuel on our business. In order to provide information about the impact of fuel surcharges on the trend in revenue and yield growth, we have included the comparative weighted-average fuel surcharge percentages in effect for the first quarter of 2015 and 2014 in the accompanying discussions of each of our transportation segments.

The index used to determine the fuel surcharge percentage for our FedEx Freight business adjusts weekly, while our fuel surcharges for FedEx Express and FedEx Ground businesses incorporate a timing lag of approximately six to eight weeks before they are adjusted for changes in fuel prices. For example, the fuel surcharge index in effect at FedEx Express in June 2014 was set based on April 2014 fuel prices. In addition, our fuel surcharge index allows fuel prices to fluctuate approximately 2% for FedEx Express and approximately 4% for FedEx Ground before an adjustment to the fuel surcharge occurs. Because we purchase fuel on a daily basis at market prices, our operating results may be affected should the market price of fuel suddenly change by a significant amount or change by amounts that do not result in an adjustment in our fuel surcharges. Historically, our fuel surcharges have largely offset fluctuations in fuel prices over time; however the delay in the adjustments to our fuel surcharges can significantly affect our earnings either positively or negatively in the short-term.

The net impact of fuel had a modest benefit to operating income in the first quarter of 2015. This was driven by increased fuel surcharge revenue during the first quarter of 2015 versus prior year, which slightly outpaced the year-over-year increase in fuel prices during the quarter.

The net impact of fuel on our operating results does not consider the effects that fuel surcharge levels may have on our business, including changes in demand and shifts in the mix of services purchased by our customers. While fluctuations in fuel surcharge percentages can be significant from period to period, fuel surcharges represent one of the many individual components of our pricing structure that impact our overall revenue and yield. Additional components include the mix of services sold, the base price and extra service charges we obtain for these services and the level of pricing discounts offered.

Income Taxes

Our effective tax rate was 35.3% for the first quarter of 2015 and 36.2% for the first quarter of 2014. The tax rate in the first quarter of 2015 decreased primarily due to discrete tax benefits related to changes in valuation allowances required in certain entities and jurisdictions. For 2015, we expect an effective tax rate between 36.0% and 37.0%. The actual rate, however, will depend on a number of factors, including the amount and source of operating income.

We are subject to taxation in the United States and various U.S. state, local and foreign jurisdictions. Substantially all U.S. federal income tax matters through fiscal year 2011 are concluded, and we are currently under examination by the Internal Revenue Service for the 2012 and 2013 tax years. It is reasonably possible that certain income tax return proceedings will be completed during the next 12 months and could result in a change in our balance of unrecognized tax benefits. The expected impact of any changes would not be material to our consolidated financial statements. As of August 31, 2014, there were no material changes to our liabilities for unrecognized tax benefits from May 31, 2014.

- 29 -

Outlook

We expect revenue and earnings growth to continue into the second quarter and the remainder of 2015, driven by ongoing improvements in the results of all of our transportation segments as our expectations for continued moderate global economic growth drive volume and yield improvements. Our results in 2015 will continue to benefit from execution of the profit improvement programs announced in 2013 and which are further described in our Annual Report. Our results for the second quarter and the remainder of 2015 will also benefit from lower pension expense due to strong asset returns in 2014. Our expectations for earnings growth in the second quarter and the remainder of 2015 are dependent on key external factors including fuel prices and the pace of improvement in the global economy.

Other Outlook Matters. For details on key 2015 capital projects, refer to the “Liquidity Outlook” section of this MD&A.

As described in Note 8 of the accompanying unaudited condensed consolidated financial statements and the “Independent Contractor Model” section of our FedEx Ground segment MD&A, we are involved in a number of lawsuits and other proceedings that challenge the status of FedEx Ground’s owner-operators as independent contractors. FedEx Ground anticipates continuing changes to its relationships with its owner-operators. The nature, timing and amount of any changes are dependent on the outcome of numerous future events. We cannot reasonably estimate the potential impact of any such changes or a meaningful range of potential outcomes, although they could be material. However, we do not believe that any such changes will impair our ability to operate and profitably grow our FedEx Ground business.

See “Forward-Looking Statements” for a discussion of these and other potential risks and uncertainties that could materially affect our future performance.

RECENT ACCOUNTING GUIDANCE

New accounting rules and disclosure requirements can significantly impact our reported results and the comparability of our financial statements. These matters are described in our Annual Report.

We believe that no other new accounting guidance was adopted or issued during the first three months of 2015 that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on our financial reporting, as described in our Annual Report.

- 30 -

REPORTABLE SEGMENTS

FedEx Express, FedEx Ground and FedEx Freight represent our major service lines and, along with FedEx Services, form the core of our reportable segments. Our reportable segments include the following businesses:

FedEx Express Segment	FedEx Express (express transportation)
	FedEx Trade Networks (air and ocean freight forwarding and customs brokerage)
	FedEx SupplyChain Systems (logistics services)
FedEx Ground Segment	FedEx Ground (small-package ground delivery)
	FedEx SmartPost (small-parcel consolidator)
FedEx Freight Segment	FedEx Freight (LTL freight transportation)
	FedEx Custom Critical (time-critical transportation)
FedEx Services Segment	FedEx Services (sales, marketing, information technology, communications and back-office functions)
	FedEx TechConnect (customer service, technical support, billings and collections)
	FedEx Office (document and business services and package acceptance)

FEDEX SERVICES SEGMENT

The FedEx Services segment operates combined sales, marketing, administrative and information technology functions in shared services operations that support our transportation businesses and allow us to obtain synergies from the combination of these functions. For the international regions of FedEx Express, some of these functions are performed on a regional basis by FedEx Express and reported in the FedEx Express segment in their natural expense line items.

The FedEx Services segment provides direct and indirect support to our transportation businesses, and we allocate all of the net operating costs of the FedEx Services segment (including the net operating results of FedEx Office) to reflect the full cost of operating our transportation businesses in the results of those segments. Within the FedEx Services segment allocation, the net operating results of FedEx Office, which are an immaterial component of our allocations, are allocated to FedEx Express and FedEx Ground. We review and evaluate the performance of our transportation segments based on operating income (inclusive of FedEx Services segment allocations). For the FedEx Services segment, performance is evaluated based on the impact of its total allocated net operating costs on our transportation segments.

The operating expenses line item “Intercompany charges” on the accompanying unaudited financial summaries of our transportation segments reflects the allocations from the FedEx Services segment to the respective transportation segments. The “Intercompany charges” caption also includes charges and credits for administrative services provided between operating companies. The allocations of net operating costs are based on metrics such as relative revenues or estimated services provided. We believe these allocations approximate the net cost of providing these functions and our allocation methodologies are refined as necessary to reflect changes in our businesses.

During the first quarter of 2015, we ceased allocating to our transportation segments the costs associated with our corporate headquarters division. These costs included services related to general oversight functions, including executive officers and certain legal and finance functions. This change allows for additional transparency and improved management of our corporate oversight costs. These costs were previously included in the operating expenses line item “Intercompany charges” on the accompanying unaudited financial summaries of our transportation segments. Beginning in 2015, these costs are included in “Corporate,

- 31 -

eliminations and other” in our segment reporting and reconciliations. Prior year amounts have been revised to conform to the current year segment presentation. The increase in these unallocated costs from the prior year was driven by a legal contingency reserve recorded in the first quarter of 2015 associated with the multi-district litigation matter described in Note 8.

OTHER INTERSEGMENT TRANSACTIONS

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment. Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenues of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenues and expenses are eliminated in our consolidated results and are not separately identified in the following segment information, because the amounts are not material.

- 32 -

FEDEX EXPRESS SEGMENT

FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight including priority services, which provide time-definite delivery within one, two or three business days worldwide, and deferred or economy services, which provide time-definite delivery within five business days worldwide. The following table compares revenues, operating expenses, operating expenses as a percent of revenue, operating income and operating margin (dollars in millions) for the three-month periods ended August 31:

							Percent
	2014			2013			Change
Revenues:
Package:
U.S. overnight box	$	1,682		$	1,584			6
U.S. overnight envelope		415			419			(1	)
U.S. deferred		795			729			9
Total U.S. domestic package revenue		2,892			2,732			6
International priority		1,630			1,576			3
International economy		571			532			7
Total international export package revenue		2,201			2,108			4
International domestic(1)		371			345			8
Total package revenue		5,464			5,185			5
Freight:
U.S.		579			624			(7	)
International priority		395			388			2
International airfreight		46			54			(15	)
Total freight revenue		1,020			1,066			(4	)	Percent of Revenue
Other(2)		378			354			7		2014		2013
Total revenues		6,862			6,605			4		100.0	%	100.0	%
Operating expenses:
Salaries and employee benefits		2,485			2,440			2		36.2		36.9
Purchased transportation		647			608			6		9.4		9.2
Rentals and landing fees		426			421			1		6.2		6.4
Depreciation and amortization		374			369			1		5.5		5.6
Fuel		970			956			1		14.1		14.5
Maintenance and repairs		379			307			23		5.5		4.6
Intercompany charges(3)		449			458			(2	)	6.6		7.0
Other		763			773			(1	)	11.1		11.7
Total operating expenses(3)		6,493			6,332			3		94.6	%	95.9	%
Operating income(3)	$	369		$	273			35
Operating margin(3)		5.4	%		4.1	%		130	bp

⁽¹⁾ International domestic revenues represent our international intra-country express operations.

⁽²⁾ Includes FedEx Trade Networks and FedEx SupplyChain Systems.

⁽³⁾ Prior year amounts have been revised to conform to the current year segment presentation regarding the allocation of corporate headquarters costs.

- 33 -

The following table compares selected statistics (in thousands, except yield amounts) for the three-month periods ended August 31:

					Percent
	2014		2013		Change
Package Statistics(1)
Average daily package volume (ADV):
U.S. overnight box		1,211		1,112		9
U.S. overnight envelope		527		563		(6	)
U.S. deferred		846		790		7
Total U.S. domestic ADV		2,584		2,465		5
International priority		409		406		1
International economy		170		165		3
Total international export ADV		579		571		1
International domestic(2)		816		789		3
Total ADV		3,979		3,825		4
Revenue per package (yield):
U.S. overnight box	$	21.69	$	22.27		(3	)
U.S. overnight envelope		12.32		11.61		6
U.S. deferred		14.68		14.42		2
U.S. domestic composite		17.49		17.32		1
International priority		62.19		60.65		3
International economy		52.60		50.41		4
International export composite		59.38		57.70		3
International domestic(2)		7.10		6.84		4
Composite package yield		21.46		21.18		1
Freight Statistics(1)
Average daily freight pounds:
U.S.		7,318		7,423		(1	)
International priority		2,792		2,862		(2	)
International airfreight		670		850		(21	)
Total average daily freight pounds		10,780		11,135		(3	)
Revenue per pound (yield):
U.S.	$	1.24	$	1.31		(5	)
International priority		2.21		2.12		4
International airfreight		1.07		0.99		8
Composite freight yield		1.48		1.50		(1	)

⁽¹⁾ Package and freight statistics include only the operations of FedEx Express.

⁽²⁾ International domestic statistics represent our international intra-country express operations.

FedEx Express Segment Revenues

FedEx Express segment revenues increased 4% in the first quarter of 2015 due to revenue growth in our U.S. and international export package business, partially offset by lower freight revenue. U.S. domestic volumes increased 5% in the first quarter of 2015 driven by both our overnight and deferred service offerings. International economy yields increased 4% in the first quarter of 2015 primarily due to higher rates, the impact of changes in service mix and higher fuel surcharges. International priority yields increased 3% in the first quarter of 2015 due to higher fuel surcharges and weight per package, while international priority volumes increased 1%. U.S. domestic package yields increased 1% primarily due to higher fuel surcharges, changes in service mix and higher rates. Freight yields decreased 1% in the first quarter of 2015 due to lower fuel surcharges and lower rates. Freight pounds decreased 3% primarily due to capacity reductions.

- 34 -

Our fuel surcharges are indexed to the spot price for jet fuel. Using this index, the U.S. domestic and outbound fuel surcharge percentages and the international fuel surcharge percentages ranged as follows for the three-month periods ended August 31:

	2014			2013
U.S. Domestic and Outbound Fuel Surcharge:
Low		9.50	%		8.00	%
High		9.50			9.00
Weighted-average		9.50			8.50
International Fuel Surcharges:
Low		13.50			12.00
High		18.00			17.00
Weighted-average		16.26			15.36

On September 16, 2014, FedEx Express announced a 4.9% average list price increase for FedEx Express U.S. domestic, U.S. export and U.S. import services effective January 5, 2015. In January 2014, we implemented a 3.9% average list price increase for FedEx Express U.S. domestic, U.S. export and U.S. import services.

FedEx Express Segment Operating Income

FedEx Express operating income increased by 35% and operating margin increased by 130 basis points in the first quarter of 2015, driven by revenue growth in our U.S. and international export package business, partially offset by higher maintenance expense and lower freight revenues.

In the first quarter of 2015, maintenance and repairs expense increased 23% due to the timing of aircraft engine maintenance events. Salaries and employee benefits increased 2% in the first quarter of 2015 due to additional staffing to support volume growth, partially offset by lower pension expense and the benefits from our voluntary employee severance program. Purchased transportation costs increased 6% due to higher utilization of third-party transportation providers and costs associated with the expansion of our freight-forwarding business at FedEx Trade Networks.

Fuel expense increased 1% during the first quarter of 2015 due to higher aircraft fuel prices and usage. The net impact of fuel had a minimal benefit to operating income in the first quarter of 2015. See the “Fuel” section of this MD&A for a description and additional discussion of the net impact of fuel on our operating results.

- 35 -

FEDEX GROUND SEGMENT

FedEx Ground service offerings include day-certain service delivery to businesses in the U.S. and Canada and to nearly 100% of U.S. residences. FedEx SmartPost consolidates high-volume, low-weight, less time-sensitive business-to-consumer packages and utilizes the United States Postal Service (“USPS”) for final delivery. The following tables compare revenues, operating expenses, operating expenses as a percent of revenue, operating income and operating margin (dollars in millions) and selected package statistics (in thousands, except yield amounts) for the three-month periods ended August 31:

							Percent
	2014			2013			Change
Revenues:
FedEx Ground	$	2,739		$	2,506			9		Percent of Revenue
FedEx SmartPost		221			224			(1	)	2014		2013
Total revenues		2,960			2,730			8		100.0	%	100.0	%
Operating expenses:
Salaries and employee benefits		448			414			8		15.1		15.2
Purchased transportation		1,154			1,064			8		39.0		39.0
Rentals		108			92			17		3.7		3.4
Depreciation and amortization		119			111			7		4.0		4.1
Fuel		3			3			—		0.1		0.1
Maintenance and repairs		56			53			6		1.9		1.9
Intercompany charges(1)		275			270			2		9.3		9.8
Other		252			240			5		8.5		8.8
Total operating expenses(1)		2,415			2,247			7		81.6	%	82.3	%
Operating income(1)	$	545		$	483			13
Operating margin(1)		18.4	%		17.7	%		70	bp
Average daily package volume
FedEx Ground		4,576			4,313			6
FedEx SmartPost		1,880			2,092			(10	)
Revenue per package (yield)
FedEx Ground	$	9.33		$	9.05			3
FedEx SmartPost	$	1.84		$	1.67			10

⁽¹⁾ Prior year amounts have been revised to conform to the current year segment presentation regarding the allocation of corporate headquarters costs.

FedEx Ground Segment Revenues

FedEx Ground segment revenues increased 8% during the first quarter of 2015 due to volume and yield growth at FedEx Ground and yield growth at FedEx SmartPost, partially offset by lower volumes at FedEx SmartPost.

Average daily volume at FedEx Ground increased 6% during the first quarter of 2015 due to continued growth in our FedEx Home Delivery service and commercial business. FedEx Ground yield increased 3% during the first quarter of 2015 primarily due to rate increases and higher residential and fuel surcharges.

FedEx SmartPost average daily volume decreased 10% due to the reduction in volume from a major customer, while FedEx SmartPost yield increased 10% due to rate increases and improved customer mix, partially offset by higher postage costs. FedEx SmartPost yield represents the amount charged to customers net of postage paid to the USPS.

- 36 -

The FedEx Ground fuel surcharge is based on a rounded average of the national U.S. on-highway average price for a gallon of diesel fuel, as published by the Department of Energy. Our fuel surcharge percentages ranged as follows for the three-month periods ended August 31:

	2014			2013
Low		6.50	%		6.50	%
High		7.00			7.00
Weighted-average		6.83			6.66

On September 16, 2014, FedEx Ground and FedEx Home Delivery announced a 4.9% increase in average list price effective January 5, 2015. In addition, as announced in May 2014, FedEx Ground will apply dimensional weight pricing to all shipments effective January 5, 2015. In January 2014, FedEx Ground and FedEx Home Delivery implemented a 4.9% increase in average list price. FedEx SmartPost rates also increased.

FedEx Ground Segment Operating Income

FedEx Ground segment operating income increased 13% and operating margin increased by 70 basis points to 18.4% during the first quarter of 2015 driven by higher revenue per package and volumes. The increase to operating income was partially offset by higher network expansion costs, as we continue to invest heavily in the growing FedEx Ground and FedEx SmartPost businesses.

Purchased transportation expense increased 8% in the first quarter of 2015 due to volume growth and higher rates. Salaries and employee benefits expense increased 8% during the first quarter of 2015 due to additional staffing to support volume growth. Rentals expense increased 17% in the first quarter of 2015 due to network expansion. Depreciation and amortization expense increased 7% in the first quarter of 2015 due to network expansion and trailer purchases.

Independent Contractor Model

FedEx Ground is involved in numerous lawsuits and other proceedings (such as state tax or other administrative challenges) where the classification of its independent contractors is at issue. We are vigorously defending ourselves in all of these proceedings and continue to believe that FedEx Ground’s owner-operators are properly classified as independent contractors and not employees of FedEx Ground. For a description of these proceedings, see Note 8 of the accompanying unaudited condensed consolidated financial statements.

For additional information on the FedEx Ground Independent Service Provider model, see Part 1, Item 1 of our Annual Report under the caption “Independent Contractor Model.”

- 37 -

FEDEX FREIGHT SEGMENT

FedEx Freight service offerings include priority services when speed is critical and economy services when time can be traded for savings. The following table compares revenues, operating expenses, operating expenses as a percent of revenue, operating income (dollars in millions), operating margin and selected statistics for the three-month periods ended August 31:

							Percent			Percent of Revenue
	2014			2013			Change			2014			2013
Revenues	$	1,609		$	1,424			13			100.0	%		100.0	%
Operating expenses:
Salaries and employee benefits		656			598			10			40.8			42.0
Purchased transportation		284			234			21			17.7			16.4
Rentals		32			32			—			2.0			2.3
Depreciation and amortization		58			57			2			3.6			4.0
Fuel		147			145			1			9.1			10.2
Maintenance and repairs		46			46			—			2.9			3.2
Intercompany charges(1)		110			113			(3	)		6.8			7.9
Other		108			100			8			6.7			7.0
Total operating expenses(1)		1,441			1,325			9			89.6	%		93.0	%
Operating income(1)	$	168		$	99			70
Operating margin(1)		10.4	%		7.0	%		340	bp
Average daily LTL shipments (in thousands)
Priority		69.0			61.1			13
Economy		29.1			27.6			5
Total average daily LTL shipments		98.1			88.7			11
Weight per LTL shipment (lbs)
Priority		1,258			1,244			1
Economy		1,013			993			2
Composite weight per LTL shipment		1,185			1,166			2
LTL revenue per shipment
Priority	$	228.07		$	222.45			3
Economy		265.42			256.47			3
Composite LTL revenue per shipment	$	239.16		$	233.05			3
LTL revenue per hundredweight
Priority	$	18.14		$	17.88			1
Economy		26.19			25.84			1
Composite LTL revenue per hundredweight	$	20.18		$	19.99			1

⁽¹⁾ Prior year amounts have been revised to conform to the current year segment presentation regarding the allocation of corporate headquarters costs.

FedEx Freight Segment Revenues

FedEx Freight segment revenues increased 13% during the first quarter of 2015 due to higher average daily LTL shipments and revenue per LTL shipment. Average daily LTL shipments increased 11% in the first quarter of 2015 due to higher demand for our FedEx Freight Priority and FedEx Freight Economy service offerings. LTL revenue per shipment increased 3% in the first quarter of 2015 due to higher weight per LTL shipment, higher fuel surcharges and higher rates.

- 38 -

The indexed LTL fuel surcharge is based on the average of the national U.S. on-highway average price for a gallon of diesel fuel, as published by the Department of Energy. The indexed LTL fuel surcharge percentages ranged as follows for the three-month periods ended August 31:

	2014			2013
Low		25.70	%		22.70	%
High		26.20			23.20
Weighted-average		26.00			23.00

On September 16, 2014, FedEx Freight announced a 4.9% average increase in certain U.S. and other shipping rates effective January 5, 2015. In June 2014, FedEx Freight increased its published fuel surcharge indices by three percentage points. In March 2014, FedEx Freight increased certain U.S. and other shipping rates by an average of 3.9%. In July 2013, FedEx Freight increased certain U.S. and other shipping rates by an average of 4.5%.

FedEx Freight Segment Operating Income

FedEx Freight segment operating income and operating margin increased in the first quarter of 2015 due to the positive impacts of higher LTL revenue per shipment, higher average daily LTL shipments and solid cost management.

In the first quarter of 2015, salaries and employee benefits increased 10% primarily due to a volume-related increase in labor hours. Purchased transportation expense increased 21% due to the increased utilization of third-party transportation providers and higher rates.

- 39 -

FINANCIAL CONDITION

LIQUIDITY

Cash and cash equivalents totaled $2.4 billion at August 31, 2014, compared to $2.9 billion at May 31, 2014. The following table provides a summary of our cash flows for the three-month periods ended August 31 (in millions):

	2014			2013
Operating activities:
Net income	$	606		$	489
Noncash charges and credits		759			810
Changes in assets and liabilities		(383	)		(370	)
Cash provided by operating activities		982			929
Investing activities:
Capital expenditures		(720	)		(572	)
Proceeds from asset dispositions and other		4			10
Cash used in investing activities		(716	)		(562	)
Financing activities:
Proceeds from stock issuances		97			131
Excess tax benefit on the exercise of stock options		10			14
Dividends paid		(57	)		(48	)
Purchase of treasury stock		(791	)		(278	)
Cash used in financing activities		(741	)		(181	)
Effect of exchange rate changes on cash		(17	)		(7	)
Net (decrease) increase in cash and cash equivalents	$	(492	)	$	179

Cash flows from operating activities increased $53 million in the first quarter of 2015 predominately due to higher net income. Capital expenditures during the first three months of 2015 were higher than capital expenditures in the first three months of 2014, primarily due to increased spending for aircraft at FedEx Express. See “Capital Resources” for a discussion of capital expenditures during 2015 and 2014.

In 2014, our Board of Directors authorized a new share repurchase program of up to 32 million shares of common stock. Repurchases were made at the company’s discretion, based on ongoing assessments of the capital needs of the business, the market price of its common stock and general market conditions. During the first quarter of 2015, we repurchased 5.3 million shares of FedEx common stock at an average price of $148 per share for a total of $791 million. As of August 31, 2014, no shares remained under the existing share repurchase authorizations.

CAPITAL RESOURCES

Our operations are capital intensive, characterized by significant investments in aircraft, vehicles, technology, facilities, and package-handling and sort equipment. The amount and timing of capital additions depend on various factors, including pre-existing contractual commitments, anticipated volume growth, domestic and international economic conditions, new or enhanced services, geographical expansion of services, availability of satisfactory financing and actions of regulatory authorities.

- 40 -

The following table compares capital expenditures by asset category and reportable segment for the three-month periods ended August 31 (in millions):

	2014		2013		Dollar Change			Percent Change
Aircraft and related equipment	$	299	$	197	$	102			52
Facilities and sort equipment		147		125		22			18
Vehicles		129		149		(20	)		(13	)
Information and technology investments		74		71		3			4
Other equipment		71		30		41			137
Total capital expenditures	$	720	$	572	$	148			26
FedEx Express segment		467		305		162			53
FedEx Ground segment		140		161		(21	)		(13	)
FedEx Freight segment		36		40		(4	)		(10	)
FedEx Services segment		77		66		11			17
Total capital expenditures	$	720	$	572	$	148			26

Capital expenditures during the first quarter of 2015 were higher than the prior-year period primarily due to increased spending for aircraft at FedEx Express. Aircraft and related equipment purchases at FedEx Express during the first quarter of 2015 included the delivery of six Boeing 757 (“B757”) aircraft, as well as the modification of certain aircraft before being placed into service.

LIQUIDITY OUTLOOK

We believe that our cash and cash equivalents, cash flow from operations and available financing sources are adequate to meet our liquidity needs, including working capital, capital expenditure requirements and debt payment obligations. Our cash and cash equivalents balance at August 31, 2014 includes $459 million of cash in offshore jurisdictions associated with our permanent reinvestment strategy. We do not believe that the indefinite reinvestment of these funds offshore impairs our ability to meet our domestic debt or working capital obligations. Although we expect higher capital expenditures in 2015, we anticipate that our cash flow from operations will be sufficient to fund these expenditures. Historically, we have been successful in obtaining unsecured financing, from both domestic and international sources, although the marketplace for such investment capital can become restricted depending on a variety of economic factors.

Our capital expenditures are expected to be approximately $4.2 billion in 2015 and include spending for aircraft and aircraft-related equipment at FedEx Express, sort facility expansion, primarily at FedEx Ground, and vehicle replacement at all our transportation segments. We invested $299 million in aircraft and aircraft-related equipment in the first quarter of 2015 and expect to invest an additional $1.4 billion for aircraft and aircraft-related equipment during the remainder of 2015.

We have a shelf registration statement filed with the Securities and Exchange Commission (“SEC”) that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock.

A $1 billion revolving credit facility is available to finance our operations and other cash flow needs and to provide support for the issuance of commercial paper. We are in compliance with all the covenants of our revolving credit agreement and do not expect the covenants to affect our operations, including our liquidity or expected funding needs. As of August 31, 2014, no commercial paper was outstanding and the entire $1 billion under the revolving credit facility was available for future borrowings. See Note 3 and our Annual Report for a description of the term and significant covenants of our revolving credit facility.

In September 2014, we made $165 million in required contributions to our U.S. Pension Plans. Our U.S. Pension Plans have ample funds to meet expected benefit payments. For the remainder of 2015, we have $330 million in required contributions to our U.S. Pension Plans.

- 41 -

Standard & Poor’s has assigned us a senior unsecured debt credit rating of BBB and commercial paper rating of A-2 and a ratings outlook of “stable.” Moody’s Investors Service has assigned us a senior unsecured debt credit rating of Baa1 and commercial paper rating of P-2 and a ratings outlook of “stable.” If our credit ratings drop, our interest expense may increase. If our commercial paper ratings drop below current levels, we may have difficulty utilizing the commercial paper market. If our senior unsecured debt credit ratings drop below investment grade, our access to financing may become limited.

CONTRACTUAL CASH OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

The following table sets forth a summary of our contractual cash obligations as of August 31, 2014. Certain of these contractual obligations are reflected in our balance sheet, while others are disclosed as future obligations under accounting principles generally accepted in the United States. Except for the current portion of interest on long-term debt, this table does not include amounts already recorded in our balance sheet as current liabilities at August 31, 2014. We have certain contingent liabilities that are not accrued in our balance sheet in accordance with accounting principles generally accepted in the United States. These contingent liabilities are not included in the table below. We have other long-term liabilities reflected in our balance sheet, including deferred income taxes, qualified and nonqualified pension and postretirement healthcare plan liabilities and other self-insurance accruals. The payment obligations associated with these liabilities are not reflected in the table below due to the absence of scheduled maturities. Accordingly, this table is not meant to represent a forecast of our total cash expenditures for any of the periods presented.

	Payments Due by Fiscal Year (Undiscounted) (in millions)
	2015 (1)		2016		2017		2018		2019		Thereafter		Total
Operating activities:
Operating leases	$	1,615	$	1,989	$	2,017	$	1,529	$	1,301	$	7,092	$	15,543
Non-capital purchase obligations and other		360		319		171		94		55		102		1,101
Interest on long-term debt		129		231		231		231		231		3,925		4,978
Quarterly contributions to our U.S. Pension Plans		495		—		—		—		—		—		495
Investing activities:
Aircraft and aircraft-related capital commitments		995		1,244		959		1,341		860		4,461		9,860
Other capital purchase obligations		152		—		—		—		—		—		152
Financing activities:
Debt		—		—		—		—		750		3,990		4,740
Total	$	3,746	$	3,783	$	3,378	$	3,195	$	3,197	$	19,570	$	36,869

⁽¹⁾ Cash obligations for the remainder of 2015.

Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above. Such purchase orders often represent authorizations to purchase rather than binding agreements. See Note 7 of the accompanying unaudited condensed consolidated financial statements for more information.

Operating Activities

The amounts reflected in the table above for operating leases represent future minimum lease payments under noncancelable operating leases (principally aircraft and facilities) with an initial or remaining term in excess of one year at August 31, 2014.

Included in the table above within the caption entitled “Non-capital purchase obligations and other” is our estimate of the current portion of the liability ($1 million) for uncertain tax positions and amounts for purchase obligations that represent noncancelable

- 42 -

agreements to purchase goods or services that are not capital related. Such contracts include those for printing and advertising and promotions contracts. We cannot reasonably estimate the timing of the long-term payments or the amount by which the liability for uncertain tax positions will increase or decrease over time; therefore, the long-term portion of the liability for uncertain tax positions ($36 million) is excluded from the table.

The amounts reflected in the table above for interest on long-term debt represent future interest payments due on our long-term debt, all of which are fixed rate.

We had $519 million in deposits and progress payments as of August 31, 2014 on aircraft purchases and other planned aircraft-related transactions.

Investing Activities

The amounts reflected in the table above for capital purchase obligations represent noncancelable agreements to purchase capital-related equipment. Such contracts include those for certain purchases of aircraft, aircraft modifications, vehicles, facilities, computers and other equipment.

Financing Activities

The amounts reflected in the table above for long-term debt represent future scheduled payments on our long-term debt. For the remainder of 2015, we have no scheduled principal debt payments.

Additional information on amounts included within the operating, investing and financing activities captions in the table above can be found in our Annual Report.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make significant judgments and estimates to develop amounts reflected and disclosed in the financial statements. In many cases, there are alternative policies or estimation techniques that could be used. We maintain a thorough process to review the application of our accounting policies and to evaluate the appropriateness of the many estimates that are required to prepare the financial statements of a complex, global corporation. However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and new or better information.

GOODWILL. Goodwill is tested for impairment between annual tests whenever events or circumstances make it more likely than not that the fair value of a reporting unit has fallen below its carrying value. We do not believe there has been any change of events or circumstances that would indicate that a reevaluation of the goodwill of our reporting units is required as of August 31, 2014, nor do we believe the goodwill of our reporting units is at risk of failing impairment testing. For additional details on goodwill impairment testing, refer to Note 1 of our Annual Report.

Information regarding our critical accounting estimates can be found in our Annual Report, including Note 1 to the financial statements therein. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors and with our independent registered public accounting firm.

- 43 -

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including (but not limited to) those contained in “Outlook,” “Liquidity,” “Capital Resources,” “Liquidity Outlook,” “Contractual Cash Obligations” and “Critical Accounting Estimates,” and the “General,” “Retirement Plans,” and “Contingencies” notes to the consolidated financial statements, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations, cash flows, plans, objectives, future performance and business. Forward-looking statements include those preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “plans,” “estimates,” “targets,” “projects,” “intends” or similar expressions. These forward-looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated (expressed or implied) by such forward-looking statements, because of, among other things, potential risks and uncertainties, such as:

• economic conditions in the global markets in which we operate;

• significant changes in the volumes of shipments transported through our networks, customer demand for our various services or the prices we obtain for our services;

• damage to our reputation or loss of brand equity;

• disruptions to the Internet or our technology infrastructure, including those impacting our computer systems and Web site, which can adversely affect our operations and reputation among customers;

• the price and availability of jet and vehicle fuel;

• our ability to manage our cost structure for capital expenditures and operating expenses, and match it to shifting and future customer volume levels;

• the impact of intense competition on our ability to maintain or increase our prices (including our fuel surcharges in response to fluctuating fuel price) or to maintain or grow our market share;

• our ability to effectively operate, integrate, leverage and grow acquired businesses, and to continue to support the value we allocate to these acquired businesses, including their goodwill;

• our ability to maintain good relationships with our employees and prevent attempts by labor organizations to organize groups of our employees, which could significantly increase our operating costs and reduce our operational flexibility;

• the impact of costs related to (i) challenges to the status of FedEx Ground’s owner-operators as independent contractors, rather than employees, and (ii) any related changes to our relationship with these owner-operators;

• our ability to execute on our profit improvement programs;

• the impact of any international conflicts on the United States and global economies in general, the transportation industry or us in particular, and what effects these events will have on our costs or the demand for our services;

• any impacts on our businesses resulting from new domestic or international government laws and regulation, including regulatory actions affecting global aviation or other transportation rights, increased air cargo and other security or safety requirements, and tax, accounting, trade (such as protectionist measures enacted in response to weak economic conditions), labor (such as card-check legislation or changes to the Railway Labor Act affecting FedEx Express employees), environmental (such as global climate change legislation) or postal rules;

- 44 -

• adverse weather conditions or localized natural disasters in key geographic areas, such as earthquakes, volcanoes, and hurricanes, which can disrupt our electrical service, damage our property, disrupt our operations, increase our fuel costs and adversely affect our shipment levels;

• any impact on our business from disruptions or modifications in service by the USPS, which is a significant customer and vendor of FedEx, as a consequence of the USPS’s current financial difficulties or any resulting structural changes to its operations, network, service offerings or pricing;

• increasing costs, the volatility of costs and funding requirements and other legal mandates for employee benefits, especially pension and healthcare benefits;

• the increasing costs of compliance with federal, state and foreign governmental agency mandates (including the Foreign Corrupt Practices Act and the U.K. Bribery Act) and defending against inappropriate or unjustified enforcement or other actions by such agencies;

• changes in foreign currency exchange rates, especially in the Chinese yuan, euro, Brazilian real, British pound and the Canadian dollar, which can affect our sales levels and foreign currency sales prices;

• market acceptance of our new service and growth initiatives;

• any liability resulting from and the costs of defending against class-action litigation, such as wage-and-hour and discrimination and retaliation claims, and any other legal or governmental proceedings;

• the outcome of future negotiations to reach new collective bargaining agreements — including with the union that represents the pilots of FedEx Express (the current pilot contract became amendable in March 2013, and the parties are currently in negotiations);

• the impact of technology developments on our operations and on demand for our services, and our ability to continue to identify and eliminate unnecessary information technology redundancy and complexity throughout the organization;

• governmental underinvestment in transportation infrastructure, which could increase our costs and adversely impact our service levels due to traffic congestion or sub-optimal routing of our vehicles and aircraft;

• widespread outbreak of an illness or any other communicable disease, or any other public health crisis;

• availability of financing on terms acceptable to us and our ability to maintain our current credit ratings, especially given the capital intensity of our operations; and

• other risks and uncertainties you can find in our press releases and SEC filings, including the risk factors identified under the heading “Risk Factors” in “Management’s Discussion and Analysis of Results of Operations and Financial Condition” in our Annual Report, as updated by our quarterly reports on Form 10-Q.

As a result of these and other factors, no assurance can be given as to our future results and achievements. Accordingly, a forward-looking statement is neither a prediction nor a guarantee of future events or circumstances and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. We are under no obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

- 45 -

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of August 31, 2014, there had been no material changes in our market risk sensitive instruments and positions since our disclosures in our Annual Report.

The principal foreign currency exchange rate risks to which we are exposed are in the Chinese yuan, euro, Brazilian real, British pound and the Canadian dollar. Historically, our exposure to foreign currency fluctuations is more significant with respect to our revenues than our expenses, as a significant portion of our expenses are denominated in U.S. dollars, such as aircraft and fuel expenses. During the first three months of 2015, the U.S. dollar strengthened relative to the currencies of the foreign countries in which we operate as compared to May 31, 2014; however, this strengthening did not have a material effect on our results.

While we have market risk for changes in the price of jet and vehicle fuel, this risk is largely mitigated by our indexed fuel surcharges. For additional discussion of our indexed fuel surcharges see the “Fuel” section of “Management’s Discussion and Analysis of Results of Operations and Financial Condition.”

Item 4. Controls and Procedures

The management of FedEx, with the participation of our principal executive and financial officers, has evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and communicated to FedEx management as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officers have concluded that such disclosure controls and procedures were effective as of August 31, 2014 (the end of the period covered by this Quarterly Report on Form 10-Q).

During our fiscal quarter ended August 31, 2014, no change occurred in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

- 46 -

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a description of all material pending legal proceedings, see Note 8 of the accompanying unaudited condensed consolidated financial statements.

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in our Annual Report (under the heading “Risk Factors” in “Management’s Discussion and Analysis of Results of Operations and Financial Condition”) in response to Part I, Item 1A of Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information on FedEx’s repurchases of our common stock during the first quarter of 2015:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Maximum Number of Shares That May Yet Be Purchased Under the Programs
June 1-30, 2014		2,238,776	$	144.80		2,238,776		3,103,634
July 1-31, 2014		1,982,331		151.87		1,982,331		1,121,303
Aug. 1-31, 2014		1,121,303		147.84		1,121,303		—
Total		5,342,410				5,342,410

The repurchases above were made under a share repurchase program that was approved by our Board of Directors in 2014, which authorized us to purchase, in the open market or in negotiated or block transactions, up to an aggregate of 32 million shares of our common stock. This share repurchase program was completed in the first quarter of 2015. As of September  17, 2014, no shares remained authorized for purchase under the existing share repurchase programs.

Item  6. Exhibits

Exhibit     Number	Description of Exhibit
10.1	Amendment dated June 25, 2014 (but effective as of June 2, 2014), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
10.2	Amendment dated June 25, 2014 (but effective as of June 2, 2014), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
12.1	Computation of Ratio of Earnings to Fixed Charges.
15.1	Letter re: Unaudited Interim Financial Statements.

- 47 -

31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	Interactive Data Files.

- 48 -

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FEDEX CORPORATION
Date: September 18, 2014	/s/ JOHN L. MERINO
	JOHN L. MERINO
	CORPORATE VICE PRESIDENT AND
	PRINCIPAL ACCOUNTING OFFICER

- 49 -

EXHIBIT INDEX

Exhibit     Number	Description of Exhibit
10.1	Amendment dated June 25, 2014 (but effective as of June 2, 2014), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
10.2	Amendment dated June 25, 2014 (but effective as of June 2, 2014), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
12.1	Computation of Ratio of Earnings to Fixed Charges.
15.1	Letter re: Unaudited Interim Financial Statements.
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	Interactive Data Files.

E-1

EX-10.1

EXHIBIT 10.1

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT   1. CONTRACT ID CODE     PAGE OF   1        2

2. AMENDMENT/MODIFICATION NO. 017	3. EFFECTIVE DATE   06/02/2014	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                         CODE	5ASNET	7. ADMINISTERED BY (If other than Item 6)	CODE	5ASNET
ALAINA EARL Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW Room 1P 650 Washington DC 20260-0650 (202) 268-6580		Air Transportation CMC Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650

8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code) FEDERAL EXPRESS CORPORATION 3610 HACKS CROSS ROAD MEMPHIS, TN 38125-8800		(x)	9A. AMENDMENT OF SOLICITATION NO.
			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13) 04/23/2013
SUPPLIER CODE      000389122	FACILITY CODE

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

¨     ¨  is extended,         ¨  is not extended.

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:

(a) By completing Items 8 and 15, and returning                  copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment number. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

12.    ACCOUNTING AND APPROPRIATION DATA     (If  required).          See Schedule Net Decrease: [*]            

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14

(x)	A.	THIS CHANGE BY CLAUSE IS ISSUED PURSUANT TO: (Specify clause) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A. Monthly Fuel Adjustment
x
¨	B.	THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14.
¨	C.	THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO THE AUTHORITY OF: THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
¨	D.	OTHER (such as no cost change/cancellation, termination, etc.) (Specify type of modification and authority): THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.

E. IMPORTANT:     Contractor ¨ is not, x is required to sign this document and return          1           copies to the issuing office.

14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

A) In accordance with contract ACN-13-FX and the “Fuel Adjustment” section, the following Line Haul Rate (fuel) for the Day Network, as set out in Attachment 10, is modified for performance during the period of June 2, 2014 to June 29, 2014 (Operating Period 9) as follows:

From:

[*] per cubic foot

To:

[*] per cubic foot

Continued...

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

15A. NAME AND TITLE OF SIGNER (Type or print)   Paul J. Herron, Vice President 16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)       Brian McKain

15B. CONTRACTOR/OFFEROR   /s/ PAUL J. HERRON (Signature of person authorized to sign) 15C. DATE SIGNED   6/19/2014 16B. CONTRACT AUTHORITY       /s/ Susan E. Partridge (Signature of Contracting Officer) 16C. DATE SIGNED   6/25/14

*Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

CONTINUATION SHEET REQUISITION NO.                      PAGE OF 2         2

CONTRACT/ORDER NO. ACN-13-FX/017 AWARD/ EFFECTIVE DATE   06/02/2014 MASTER/AGENCY CONTRACT NO. SOLICITATION NO. SOLICITATION ISSUE DATE

ITEM NO.	SCHEDULE OF SUPPLIES / SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	This is a decrease of [*].1 [*] 1 Line Haul Rate (fuel) and Line Haul Rate (fuel) Difference are rounded to the fourth decimal place but calculations are worked completely. This accounts for the above stated decrease being one-hundredth of a cent off. Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 9/30/2020 Change Item 00001 to read as follows:
00001	Day Network
	Account Number: 53503 The dollar amounts included in boxes 12 and 14 are for USPS internal budgeting purposes only, and in no way provide a guarantee to the supplier.				[*]

* Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

EX-10.2

EXHIBIT 10.2

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT   1. CONTRACT ID CODE     PAGE OF   1        2

2. AMENDMENT/MODIFICATION NO. 018	3. EFFECTIVE DATE   06/02/2014	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                         CODE	5ASNET	7. ADMINISTERED BY (If other than Item 6)	CODE	5ASNET
ALAINA EARL Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW Room 1P 650 Washington DC 20260-0650 (202) 268-6580		Air Transportation CMC Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650

8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code) FEDERAL EXPRESS CORPORATION 3610 HACKS CROSS ROAD MEMPHIS, TN 38125-8800		(x)	9A. AMENDMENT OF SOLICITATION NO.
			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13) 04/23/2013
SUPPLIER CODE        000389122	FACILITY CODE

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

¨     ¨  is extended,         ¨  is not extended.

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:

(a) By completing Items 8 and 15, and returning                  copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment number. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

12.    ACCOUNTING AND APPROPRIATION DATA     (If  required).          See Schedule                          [*]            

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

(x)	A.	THIS CHANGE BY CLAUSE IS ISSUED PURSUANT TO: (Specify clause) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
¨
x	B.	THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14.
¨	C.	THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO THE AUTHORITY OF: THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
¨	D.	OTHER (such as no cost change/cancellation, termination, etc.) (Specify type of modification and authority): THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.

E. IMPORTANT:     Contractor ¨ is not, x is required to sign this document and return          1           copies to the issuing office.

14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

A) This following is an Administrative Modification to correct the text of Modification 17 as stated below due to system rounding error¹:

This modification is to correct a math error on Mod 17 resulting in a Line Haul Rate difference of [*], which will be corrected as a part of this modification.

Mod 17 will be corrected

FROM:

In accordance with contract ACN-13-FX and the “Fuel Adjustment” section, the following Line Haul Rate (fuel) for the Day Network as set out in Attachment 10 is modified for performance during the period of June 2, 2014 to June 29, 2014 (Operating Period 9) as

Continued...

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

15A. NAME AND TITLE OF SIGNER (Type or print)   Paul J. Herron, Vice President 16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)       Brian McKain

15B. CONTRACTOR/OFFEROR   /s/ PAUL J. HERRON (Signature of person authorized to sign) 15C. DATE SIGNED   6/19/2014 16B. CONTRACT AUTHORITY       /s/ Susan E. Partridge (Signature of Contracting Officer) 16C. DATE SIGNED   6/25/14

*Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

CONTINUATION SHEET REQUISITION NO.                      PAGE OF 2         2

CONTRACT/ORDER NO. ACN-13-FX/018 AWARD/ EFFECTIVE DATE   06/02/2014 MASTER/AGENCY CONTRACT NO. SOLICITATION NO. SOLICITATION ISSUE DATE

ITEM NO.	SCHEDULE OF SUPPLIES / SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	follows: ORIGINAL From: [*] per cubic foot To: [*] per cubic foot This is a decrease of [*]. To: In accordance with contract ACN-13-FX and the “Fuel Adjustment” section, the following Line Haul Rate (fuel) for the Day Network as set out in Attachment 10 is modified for performance during the period of June 2, 2014 to June 29, 2014 (Operating Period 9) as follows: UPDATED From: [*] per cubic foot To: [*] per cubic foot This is a decrease of [*]. 1 There will be no change to the net decrease of the contract because Modification 17’s error was purely visual and did not affect calculations. Modification 17’s Line Haul Rate rounded down to display a number lower by [*] but calculations for the Line Haul Rate Difference [*] were conducted using the correct rounding techniques as per the contract. The rounding error of the Line Haul Rate was purely cosmetic and had no impact upon the contract’s decrease of [*] as per Modification 17.
	Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Period of Performance: 09/30/2013 to 9/30/2020 The dollar amounts included in boxes 12 and 14 are for USPS internal budgeting purposes only, and in no way provide a guarantee to the supplier.

* Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

EX-12.1

EXHIBIT 12.1

FEDEX CORPORATION

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(UNAUDITED)

(IN MILLIONS, EXCEPT RATIOS)

	Three Months Ended
	August 31,				Year Ended May 31,
	2014		2013		2014		2013		2012		2011		2010
Earnings:
Income before income taxes	$	937	$	766	$	3,289	$	2,455	$	3,141	$	2,265	$	1,894
Add back:
Interest expense, net of capitalized interest		51		31		160		82		52		86		79
Amortization of debt issuance costs		1		1		4		5		5		16		14
Portion of rent expense representative of interest factor		221		221		876		864		797		852		806
Earnings as adjusted	$	1,210	$	1,019	$	4,329	$	3,406	$	3,995	$	3,219	$	2,793
Fixed Charges:
Interest expense, net of capitalized interest	$	51	$	31	$	160	$	82	$	52	$	86	$	79
Capitalized interest		8		8		29		45		85		71		80
Amortization of debt issuance costs		1		1		4		5		5		16		14
Portion of rent expense representative of interest factor		221		221		876		864		797		852		806
	$	281	$	261	$	1,069	$	996	$	939	$	1,025	$	979
Ratio of Earnings to Fixed Charges		4.3		3.9		4.0		3.4		4.3		3.1		2.9

EX-15.1

EXHIBIT 15.1

The Board of Directors and Stockholders

FedEx Corporation

We are aware of the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-192957, 333-171232, 333-03443, 333-45037, 333-71065, 333-34934, 333-100572, 333-111399, 333-121418, 333-130619, 333-156333 and Form S-3 No. 333-183989) of FedEx Corporation and in the related Prospectuses of our report dated September 18, 2014, relating to the unaudited condensed consolidated interim financial statements of FedEx Corporation that are included in its Form 10-Q for the quarter ended August 31, 2014.

/s/ Ernst & Young LLP

Memphis, Tennessee

September 18, 2014

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Frederick W. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q of FedEx Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 18, 2014

/s/ Frederick W. Smith

Frederick W. Smith

Chairman, President and

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alan B. Graf, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of FedEx Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 18, 2014

/s/ Alan B. Graf, Jr.

Alan B. Graf, Jr.

Executive Vice President and

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of FedEx Corporation (“FedEx”) on Form 10-Q for the period ended August 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frederick W. Smith, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of FedEx.

Date: September 18, 2014

/s/ Frederick W. Smith

Frederick W. Smith

Chairman, President and

Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of FedEx Corporation (“FedEx”) on Form 10-Q for the period ended August 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alan B. Graf, Jr., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of FedEx.

Date: September 18, 2014

/s/ Alan B. Graf, Jr.

Alan B. Graf, Jr.

Executive Vice President and

Chief Financial Officer

XML

Condensed Consolidating Financial Statements (Details 2) (USD $) In Millions, unless otherwise specified	Aug. 31, 2014	May 31, 2014	Aug. 31, 2013	May 31, 2013
CURRENT ASSETS
Cash and cash equivalents	$ 2,416	$ 2,908	$ 5,096	$ 4,917
Receivables, less allowances	5,487	5,460
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	850	793
Deferred income taxes	497	522
Total current assets	9,250	9,683
PROPERTY AND EQUIPMENT, AT COST	40,866	40,691
Less accumulated depreciation and amortization	21,442	21,141
Net property and equipment	19,424	19,550
GOODWILL	2,775	2,790
Other assets	1,138	1,047
ASSETS	32,587	33,070
CURRENT LIABILITIES
Current portion of long-term debt	1	1
Accrued salaries and employee benefits	1,103	1,277
Accounts payable	1,973	1,971
Accrued expenses	2,076	2,063
Total current liabilities	5,153	5,312
LONG-TERM DEBT, LESS CURRENT PORTION	4,735	4,736
OTHER LONG-TERM LIABILITIES
Deferred income taxes	2,107	2,114
Other liabilities	5,471	5,631
Total other long-term liabilities	7,578	7,745
STOCKHOLDERS' INVESTMENT	15,121	15,277
LIABILITIES AND STOCKHOLDERS' INVESTMENT	32,587	33,070
Parent Company Member
CURRENT ASSETS
Cash and cash equivalents	1,305	1,756	4,058	3,892
Receivables, less allowances		2
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	34	59
Total current assets	1,339	1,817
PROPERTY AND EQUIPMENT, AT COST	28	28
Less accumulated depreciation and amortization	22	22
Net property and equipment	6	6
INVESTMENT IN SUBSIDIARIES	21,352	20,785
Other assets	2,069	2,088
ASSETS	24,766	24,696
CURRENT LIABILITIES
Accrued salaries and employee benefits	32	55
Accounts payable	63	2
Accrued expenses	502	405
Total current liabilities	597	462
LONG-TERM DEBT, LESS CURRENT PORTION	4,486	4,487
INTERCOMPANY PAYABLE	2,586	2,323
OTHER LONG-TERM LIABILITIES
Other liabilities	1,976	2,147
Total other long-term liabilities	1,976	2,147
STOCKHOLDERS' INVESTMENT	15,121	15,277
LIABILITIES AND STOCKHOLDERS' INVESTMENT	24,766	24,696
Guarantor Subsidiaries Member
CURRENT ASSETS
Cash and cash equivalents	430	441	431	405
Receivables, less allowances	4,341	4,338
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	750	674
Deferred income taxes	474	501
Total current assets	5,995	5,954
PROPERTY AND EQUIPMENT, AT COST	38,489	38,303
Less accumulated depreciation and amortization	20,182	19,899
Net property and equipment	18,307	18,404
INTERCOMPANY RECEIVABLE	1,177	1,058
GOODWILL	1,552	1,552
INVESTMENT IN SUBSIDIARIES	3,679	3,754
Other assets	850	747
ASSETS	31,560	31,469
CURRENT LIABILITIES
Current portion of long-term debt	1	1
Accrued salaries and employee benefits	915	1,042
Accounts payable	1,398	1,530
Accrued expenses	1,384	1,444
Total current liabilities	3,698	4,017
LONG-TERM DEBT, LESS CURRENT PORTION	249	249
OTHER LONG-TERM LIABILITIES
Deferred income taxes	4,042	4,059
Other liabilities	3,238	3,230
Total other long-term liabilities	7,280	7,289
STOCKHOLDERS' INVESTMENT	20,333	19,914
LIABILITIES AND STOCKHOLDERS' INVESTMENT	31,560	31,469
Non Guarantor Subsidiaries Member
CURRENT ASSETS
Cash and cash equivalents	821	861	723	717
Receivables, less allowances	1,177	1,151
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	66	60
Deferred income taxes	23	21
Total current assets	2,087	2,093
PROPERTY AND EQUIPMENT, AT COST	2,349	2,360
Less accumulated depreciation and amortization	1,238	1,220
Net property and equipment	1,111	1,140
INTERCOMPANY RECEIVABLE	1,409	1,265
GOODWILL	1,223	1,238
Other assets	240	250
ASSETS	6,070	5,986
CURRENT LIABILITIES
Accrued salaries and employee benefits	156	180
Accounts payable	683	620
Accrued expenses	190	214
Total current liabilities	1,029	1,014
OTHER LONG-TERM LIABILITIES
Deferred income taxes	86	93
Other liabilities	257	254
Total other long-term liabilities	343	347
STOCKHOLDERS' INVESTMENT	4,698	4,625
LIABILITIES AND STOCKHOLDERS' INVESTMENT	6,070	5,986
Consolidation Eliminations Member
CURRENT ASSETS
Cash and cash equivalents	(140)	(150)	(116)	(97)
Receivables, less allowances	(31)	(31)
Total current assets	(171)	(181)
INTERCOMPANY RECEIVABLE	(2,586)	(2,323)
INVESTMENT IN SUBSIDIARIES	(25,031)	(24,539)
Other assets	(2,021)	(2,038)
ASSETS	(29,809)	(29,081)
CURRENT LIABILITIES
Accounts payable	(171)	(181)
Total current liabilities	(171)	(181)
INTERCOMPANY PAYABLE	(2,586)	(2,323)
OTHER LONG-TERM LIABILITIES
Deferred income taxes	(2,021)	(2,038)
Total other long-term liabilities	(2,021)	(2,038)
STOCKHOLDERS' INVESTMENT	(25,031)	(24,539)
LIABILITIES AND STOCKHOLDERS' INVESTMENT	$ (29,809)	$ (29,081)

XML

Commitments (Details 1) (USD $) In Millions, unless otherwise specified	Aug. 31, 2014
Schedule of Purchase Commitments [Line Items]
2015 (remainder)	$ 2,001
2016	1,563
2017	1,130
2018	1,435
2019	915
Thereafter	4,563
Total	11,607
Aircraft And Related Equipment Commitments [Member]
Schedule of Purchase Commitments [Line Items]
2015 (remainder)	995
2016	1,244
2017	959
2018	1,341
2019	860
Thereafter	4,461
Total	9,860
Other Commitments [Member]
Schedule of Purchase Commitments [Line Items]
2015 (remainder)	1,006	[1]
2016	319	[1]
2017	171	[1]
2018	94	[1]
2019	55	[1]
Thereafter	102	[1]
Total	$ 1,747	[1]

[1] Primarily equipment, advertising contracts and, for the remainder of 2015, $495 million of quarterly contributions to our U.S. Pension Plans.

XML

General (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013	May 31, 2014
General Details [Abstract]
Dividends Payable, Date Declared	Aug. 15, 2014
Dividends Payable Amount Per Share	$ 0.20
Dividends Payable, Date To Be Paid	Oct. 01, 2014
Dividends Payable, Date Of Record	Sep. 10, 2014
Stock Based Compensation Details [Abstract]
Stock-based compensation	$ 48	$ 45
Treasury Shares [Abstract]
Number Of Shares Repurchased	5,300,000
Treasury Stock Acquired, Average Cost Per Share	$ 148.00
Stock Repurchase Authorization, Number of Shares Authorized to Be Repurchased			32,000,000
Stock Repurchase Authorization, Remaining Number of Shares	0
Payments for Repurchase of Common Stock	$ 791	$ 278

XML

Document and Entity Information (USD $) In Billions, except Share data, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Sep. 17, 2014	Nov. 29, 2013
Document and Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Aug. 31, 2014
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Entity Registrant Name	FedEx Corporation
Entity Central Index Key	0001048911
Current Fiscal Year End Date	--05-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 40.5
Entity Common Stock, Shares Outstanding		283,246,379

XML

Supplemental Cash Flow Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Supplemental Cash Flow Information [Abstract]
Interest (net of capitalized interest)	$ 96	$ 57
Income taxes	190	138
Income tax refunds received	(2)	(34)
Cash tax payments (refunds), net	$ 188	$ 104

XML

Financing Arrangements

3 Months Ended

Aug. 31, 2014

Financing Arrangements [Abstract]

Financing Arrangements

(3)Financing Arrangements

We have a shelf registration statement filed with the SEC that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock.

A $1 billion revolving credit facility is available to finance our operations and other cash flow needs and to provide support for the issuance of commercial paper. The revolving credit agreement expires in March 2018. The agreement contains a financial covenant, which requires us to maintain a leverage ratio of adjusted debt (long-term debt, including the current portion of such debt, plus six times our last four fiscal quarters' rentals and landing fees) to capital (adjusted debt plus total common stockholders' investment) that does not exceed 70%. Our leverage ratio of adjusted debt to capital was58%at August 31, 2014. We believe the leverage ratio covenant is our only significant restrictive covenant in our revolving credit agreement. Our revolving credit agreement contains other customary covenants that do not, individually or in the aggregate, materially restrict the conduct of our business. We are in compliance with the leverage ratio covenant and all other covenants of our revolving credit agreement and do not expect the covenants to affect our operations, including our liquidity or expected funding needs. As of August 31, 2014, no commercial paper was outstanding, and the entire $1 billion under the revolving credit facility was available for future borrowings.

Long-term debt, exclusive of capital leases, hada carrying valueof $4.7billionat August 31, 2014 and May 31, 2014, compared with an estimated fair value of $5.1 billion at August 31, 2014 and $5.0 billion at May 31, 2014.The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of our long-term debt is classified as Level 2 within the fair value hierarchy. This classification is defined asa fair value determined using market-based inputs other than quoted prices that are observable for the liability, either directly or indirectly.

XML

Retirement Plans (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Pension and Other Postretirement Benefit Expense [Abstract]
U.S. domestic and international pension plans	$ 68	$ 121
U.S. domestic and international defined contribution plans	94	89
U.S. domestic and international postretirement healthcare plans	20	20
Retirement plans costs	$ 182	$ 230

XML

Computation of Earnings Per Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Aug. 31, 2014		Aug. 31, 2013
Basic earnings per common share:
Net earnings allocable to common shares	$ 605	[1]	$ 489	[1]
Weighted-average common shares	285		316
Basic earnings per common share	$ 2.13		$ 1.54
Diluted earnings per common share:
Net earnings allocable to common shares	$ 605	[1]	$ 489	[1]
Weighted-average common shares	285		316
Dilutive effect of share-based awards	4		3
Weighted-average diluted shares	289		319
Diluted earnings per common share	$ 2.10		$ 1.53
Anti-dilutive options excluded from diluted earnings per common share	2.1		9.8

[1] Net earnings available to participating securities were immaterial in all periods presented.

XML

Retirement Plans (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Pension Plans
Net Periodic Benefit Cost
Service cost	$ 164	$ 164
Interest cost	275	263
Expected return on plan assets	(420)	(373)
Recognized actuarial losses and other	49	67
Total net periodic benefit cost	68	121
Postretirement Healthcare Plans
Net Periodic Benefit Cost
Service cost	10	10
Interest cost	10	10
Total net periodic benefit cost	$ 20	$ 20

XML

Retirement Plans (Details 3) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Pension Plans Contributions [Abstract]
Required U.S. pension plan contributions	$ 82	$ 150
Voluntary U.S. pension plan contributions	83	15
U.S. domestic pension contributions	165	165
September 2014 U.S. Pension Plans contribution	$ 165

XML

Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Aug. 31, 2014

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

(2)Accumulated Other Comprehensive Income (Loss)

The following table provides changes in accumulated other comprehensive income (loss) (“AOCI”), net of tax, reported in our condensed consolidated financial statements for the three-month periods ended August 31 (in millions; amounts in parentheses indicate debits to AOCI):

		2014		2013
Foreign currency translation gain (loss):
	Balance at beginning of period	$	77	$	102
	Translation adjustments		(31)		(79)
	Balance at end of period		46		23
Retirement plans adjustments:
	Balance at beginning of period		(3,771)		(3,922)
	Reclassifications from AOCI		31		42
	Balance at end of period		(3,740)		(3,880)
Accumulated other comprehensive loss at end of period		$	(3,694)	$	(3,857)

The following table presents details of the reclassifications from AOCI for the three-month periods ended August 31 (in millions; amounts in parentheses indicate debits to earnings):

			Amount Reclassified from AOCI				Affected Line Item in the Income Statement
			2014		2013
Retirement plans:
	Amortization of actuarial losses and
		other	$	(78)	$	(95)	Salaries and employee benefits
	Amortization of prior service credits			29		28	Salaries and employee benefits
Total before tax				(49)		(67)
	Income tax benefit			18		25	Provision for income taxes
AOCI reclassifications, net of tax			$	(31)	$	(42)	Net income

XML

Business Segment Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Segment Reporting Information [Line Items]
Revenues	$ 11,684	$ 11,024
Operating Income	987	795
FedEx Express Segment [Member]
Segment Reporting Information [Line Items]
Revenues	6,862	6,605
Operating Income	369	273	[1]
FedEx Ground Segment [Member]
Segment Reporting Information [Line Items]
Revenues	2,960	2,730
Operating Income	545	483	[1]
FedEx Freight Segment [Member]
Segment Reporting Information [Line Items]
Revenues	1,609	1,424
Operating Income	168	99	[1]
FedEx Services Segment [Member]
Segment Reporting Information [Line Items]
Revenues	374	375
Corporate, eliminations and other
Segment Reporting Information [Line Items]
Revenues	(121)	(110)
Operating Income	$ (95)	$ (60)	[1]

[1] Prior year amounts have been revised to conform to the current year segment presentation regarding the allocation of corporate headquarters costs.

XML

Condensed Consolidating Financial Statements (Details 3) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Condensed Financial Statements Captions [Line Items]
REVENUES	$ 11,684	$ 11,024
OPERATING EXPENSES:
Salaries and employee benefits	4,189	4,077
Purchased transportation	2,054	1,879
Rentals and landing fees	660	640
Depreciation and amortization	651	639
Fuel	1,120	1,104
Maintenance and repairs	556	480
Other	1,467	1,410
OPERATING EXPENSES	10,697	10,229
OPERATING INCOME	987	795
OTHER INCOME (EXPENSE):
Interest, net	(48)	(27)
Other, net	(2)	(2)
INCOME BEFORE INCOME TAXES	937	766
PROVISION FOR INCOME TAXES	331	277
NET INCOME	606	489
COMPREHENSIVE INCOME	606	452
Parent Company Member
OPERATING EXPENSES:
Salaries and employee benefits	30	31
Rentals and landing fees	1	1
Intercompany charges, net	(95)	(61)
Other	64	29
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	606	489
Interest, net	(53)	(34)
Intercompany charges, net	54	35
Other, net	(1)	(1)
INCOME BEFORE INCOME TAXES	606	489
NET INCOME	606	489
COMPREHENSIVE INCOME	634	528
Guarantor Subsidiaries Member
Condensed Financial Statements Captions [Line Items]
REVENUES	9,769	9,228
OPERATING EXPENSES:
Salaries and employee benefits	3,606	3,514
Purchased transportation	1,386	1,242
Rentals and landing fees	572	558
Depreciation and amortization	595	589
Fuel	1,095	1,081
Maintenance and repairs	522	449
Intercompany charges, net	2	(6)
Other	1,165	1,133
OPERATING EXPENSES	8,943	8,560
OPERATING INCOME	826	668
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	98	110
Interest, net	4	5
Intercompany charges, net	(59)	(41)
Other, net	(3)	(2)
INCOME BEFORE INCOME TAXES	866	740
PROVISION FOR INCOME TAXES	269	232
NET INCOME	597	508
COMPREHENSIVE INCOME	594	507
Non Guarantor Subsidiaries Member
Condensed Financial Statements Captions [Line Items]
REVENUES	2,004	1,878
OPERATING EXPENSES:
Salaries and employee benefits	553	532
Purchased transportation	711	673
Rentals and landing fees	88	82
Depreciation and amortization	56	50
Fuel	25	23
Maintenance and repairs	34	31
Intercompany charges, net	93	67
Other	283	293
OPERATING EXPENSES	1,843	1,751
OPERATING INCOME	161	127
OTHER INCOME (EXPENSE):
Interest, net	1	2
Intercompany charges, net	5	6
Other, net	2	1
INCOME BEFORE INCOME TAXES	169	136
PROVISION FOR INCOME TAXES	62	45
NET INCOME	107	91
COMPREHENSIVE INCOME	82	16
Consolidation Eliminations Member
Condensed Financial Statements Captions [Line Items]
REVENUES	(89)	(82)
OPERATING EXPENSES:
Purchased transportation	(43)	(36)
Rentals and landing fees	(1)	(1)
Other	(45)	(45)
OPERATING EXPENSES	(89)	(82)
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	(704)	(599)
INCOME BEFORE INCOME TAXES	(704)	(599)
NET INCOME	(704)	(599)
COMPREHENSIVE INCOME	$ (704)	$ (599)

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	Aug. 31, 2014	May 31, 2014
CURRENT ASSETS
Allowances for receivables	$ 170	$ 164
Allowances for spare parts, supplies and fuel	$ 216	$ 212
COMMON STOCKHOLDERS' INVESTMENT
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	800	800
Common stock, shares issued	318	318

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Operating Activities:
Net income	$ 606	$ 489
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	651	639
Provision for uncollectible accounts	35	37
Stock-based compensation	48	45
Deferred income taxes and other noncash items	25	89
Changes in assets and liabilities:
Receivables	(86)	10
Other assets	(30)	(31)
Accounts payable and other liabilities	(257)	(343)
Other, net	(10)	(6)
Cash provided by operating activities	982	929
Investing Activities:
Capital expenditures	(720)	(572)
Proceeds from asset dispositions and other	4	10
Cash used in investing activities	(716)	(562)
Financing Activities:
Proceeds from stock issuances	97	131
Excess tax benefit on the exercise of stock options	10	14
Dividends paid	(57)	(48)
Purchase of treasury stock	(791)	(278)
Cash (used in) provided by financing activities	(741)	(181)
Effect of exchange rate changes on cash	(17)	(7)
Net (decrease) increase in cash and cash equivalents	(492)	179
Cash and cash equivalents at beginning of period	2,908	4,917
Cash and cash equivalents at end of period	$ 2,416	$ 5,096

XML

Commitments (Details 3) (USD $) In Millions, unless otherwise specified	Aug. 31, 2014
Schedule of Future Minimum Operating Lease Payments [Line Items]
2015 (remainder)	$ 1,615
2016	1,989
2017	2,017
2018	1,529
2019	1,301
Thereafter	7,092
Total	15,543
Aircraft and Related Equipment [Member]
Schedule of Future Minimum Operating Lease Payments [Line Items]
2015 (remainder)	408
2016	453
2017	392
2018	326
2019	273
Thereafter	550
Total	2,402
Facilities and Other [Member]
Schedule of Future Minimum Operating Lease Payments [Line Items]
2015 (remainder)	1,207
2016	1,536
2017	1,625
2018	1,203
2019	1,028
Thereafter	6,542
Total	$ 13,141

XML

Commitments (Tables)

3 Months Ended

Aug. 31, 2014

Commitments (Tables) [Abstract]

Schedule of Purchase Commitments

		Aircraft and
		Aircraft-Related		Other(1)		Total
2015 (remainder)		$	995	$	1,006	$	2,001
2016			1,244		319		1,563
2017			959		171		1,130
2018			1,341		94		1,435
2019			860		55		915
Thereafter			4,461		102		4,563
Total		$	9,860	$	1,747	$	11,607
(1)	Primarily equipment, advertising contracts and, for the remainder of 2015, $495 million of quarterly contributions to our U.S. Pension Plans.

Schedule of Aircraft Purchase Commitments

	B757	B767F	B777F	Total
2015 (remainder)	7	12	-	19
2016	-	11	2	13
2017	-	11	-	11
2018	-	10	2	12
2019	-	4	2	6
Thereafter	-	-	12	12
Total	7	48	18	73

Schedule of Future Minimum Lease Payments, Operating Leases

	Operating Leases
	Aircraft				Total
	and Related		Facilities		Operating
	Equipment		and Other		Leases
2015 (remainder)	$	408	$	1,207	$	1,615
2016		453		1,536		1,989
2017		392		1,625		2,017
2018		326		1,203		1,529
2019		273		1,028		1,301
Thereafter		550		6,542		7,092
Total	$	2,402	$	13,141	$	15,543

XML

Commitments (Details 4) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014
Other Aircraft Commitments Disclosure [Abstract]
Boeing 777F Conditional Aircraft Commitments	9
Boeing 767F Conditional Aircraft Commitments	4
Other Commitment Disclosures [Line Items]
Deposit and Progress Payments	$ 519
Required Pensions Contributions Remaining	$ 495

XML

Condensed Consolidating Financial Statements (Tables)

3 Months Ended

Aug. 31, 2014

Condensed Consolidating Financial Statements (Tables) [Abstract]

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEETS
(UNAUDITED)
August 31, 2014
						Guarantor		Non-guarantor
				Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	1,305	$	430	$	821	$	(140)	$	2,416
	Receivables, less allowances				-		4,341		1,177		(31)		5,487
	Spare parts, supplies, fuel, prepaid expenses
		and other, less allowances			34		750		66		-		850
	Deferred income taxes				-		474		23		-		497
			Total current assets		1,339		5,995		2,087		(171)		9,250
PROPERTY AND EQUIPMENT, AT COST					28		38,489		2,349		-		40,866
	Less accumulated depreciation and amortization				22		20,182		1,238		-		21,442
			Net property and equipment		6		18,307		1,111		-		19,424
INTERCOMPANY RECEIVABLE					-		1,177		1,409		(2,586)		-
GOODWILL					-		1,552		1,223		-		2,775
INVESTMENT IN SUBSIDIARIES					21,352		3,679		-		(25,031)		-
OTHER ASSETS					2,069		850		240		(2,021)		1,138
				$	24,766	$	31,560	$	6,070	$	(29,809)	$	32,587
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES
	Current portion of long-term debt			$	-	$	1	$	-	$	-	$	1
	Accrued salaries and employee benefits				32		915		156		-		1,103
	Accounts payable				63		1,398		683		(171)		1,973
	Accrued expenses				502		1,384		190		-		2,076
		Total current liabilities			597		3,698		1,029		(171)		5,153
LONG-TERM DEBT, LESS CURRENT PORTION					4,486		249		-		-		4,735
INTERCOMPANY PAYABLE					2,586		-		-		(2,586)		-
OTHER LONG-TERM LIABILITIES
	Deferred income taxes				-		4,042		86		(2,021)		2,107
	Other liabilities				1,976		3,238		257		-		5,471
		Total other long-term liabilities			1,976		7,280		343		(2,021)		7,578
STOCKHOLDERS' INVESTMENT					15,121		20,333		4,698		(25,031)		15,121
				$	24,766	$	31,560	$	6,070	$	(29,809)	$	32,587

CONDENSED CONSOLIDATING BALANCE SHEETS
May 31, 2014
						Guarantor		Non-guarantor
				Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	1,756	$	441	$	861	$	(150)	$	2,908
	Receivables, less allowances				2		4,338		1,151		(31)		5,460
	Spare parts, supplies, fuel, prepaid expenses
		and other, less allowances			59		674		60		-		793
	Deferred income taxes				-		501		21		-		522
			Total current assets		1,817		5,954		2,093		(181)		9,683
PROPERTY AND EQUIPMENT, AT COST					28		38,303		2,360		-		40,691
	Less accumulated depreciation and amortization				22		19,899		1,220		-		21,141
			Net property and equipment		6		18,404		1,140		-		19,550
INTERCOMPANY RECEIVABLE					-		1,058		1,265		(2,323)		-
GOODWILL					-		1,552		1,238		-		2,790
INVESTMENT IN SUBSIDIARIES					20,785		3,754		-		(24,539)		-
OTHER ASSETS					2,088		747		250		(2,038)		1,047
				$	24,696	$	31,469	$	5,986	$	(29,081)	$	33,070
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES
	Current portion of long-term debt			$	-	$	1	$	-	$	-	$	1
	Accrued salaries and employee benefits				55		1,042		180		-		1,277
	Accounts payable				2		1,530		620		(181)		1,971
	Accrued expenses				405		1,444		214		-		2,063
		Total current liabilities			462		4,017		1,014		(181)		5,312
LONG-TERM DEBT, LESS CURRENT PORTION					4,487		249		-		-		4,736
INTERCOMPANY PAYABLE					2,323		-		-		(2,323)		-
OTHER LONG-TERM LIABILITIES
	Deferred income taxes				-		4,059		93		(2,038)		2,114
	Other liabilities				2,147		3,230		254		-		5,631
		Total other long-term liabilities			2,147		7,289		347		(2,038)		7,745
STOCKHOLDERS' INVESTMENT					15,277		19,914		4,625		(24,539)		15,277
				$	24,696	$	31,469	$	5,986	$	(29,081)	$	33,070

Condensed Consolidating Statements of Comprehensive Income

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended August 31, 2014
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	9,769	$	2,004	$	(89)	$	11,684
OPERATING EXPENSES:
	Salaries and employee benefits		30		3,606		553		-		4,189
	Purchased transportation		-		1,386		711		(43)		2,054
	Rentals and landing fees		1		572		88		(1)		660
	Depreciation and amortization		-		595		56		-		651
	Fuel		-		1,095		25		-		1,120
	Maintenance and repairs		-		522		34		-		556
	Intercompany charges, net		(95)		2		93		-		-
	Other		64		1,165		283		(45)		1,467
			-		8,943		1,843		(89)		10,697
OPERATING INCOME			-		826		161		-		987
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		606		98		-		(704)		-
	Interest, net		(53)		4		1		-		(48)
	Intercompany charges, net		54		(59)		5		-		-
	Other, net		(1)		(3)		2		-		(2)
INCOME BEFORE INCOME TAXES			606		866		169		(704)		937
	Provision for income taxes		-		269		62		-		331
NET INCOME		$	606	$	597	$	107	$	(704)	$	606
COMPREHENSIVE INCOME		$	634	$	594	$	82	$	(704)	$	606
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended August 31, 2013
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	9,228	$	1,878	$	(82)	$	11,024
OPERATING EXPENSES:
	Salaries and employee benefits		31		3,514		532		-		4,077
	Purchased transportation		-		1,242		673		(36)		1,879
	Rentals and landing fees		1		558		82		(1)		640
	Depreciation and amortization		-		589		50		-		639
	Fuel		-		1,081		23		-		1,104
	Maintenance and repairs		-		449		31		-		480
	Intercompany charges, net		(61)		(6)		67		-		-
	Other		29		1,133		293		(45)		1,410
			-		8,560		1,751		(82)		10,229
OPERATING INCOME			-		668		127		-		795
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		489		110		-		(599)		-
	Interest, net		(34)		5		2		-		(27)
	Intercompany charges, net		35		(41)		6		-		-
	Other, net		(1)		(2)		1		-		(2)
INCOME BEFORE INCOME TAXES			489		740		136		(599)		766
	Provision for income taxes		-		232		45		-		277
NET INCOME		$	489	$	508	$	91	$	(599)	$	489
COMPREHENSIVE INCOME		$	528	$	507	$	16	$	(599)	$	452

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended August 31, 2014
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$	(67)	$	934	$	105	$	10	$	982
INVESTING ACTIVITIES
	Capital expenditures		(1)		(688)		(31)		-		(720)
	Proceeds from asset dispositions and other		-		7		(3)		-		4
CASH USED IN INVESTING ACTIVITIES			(1)		(681)		(34)		-		(716)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		358		(366)		8		-		-
	Payment on loan between subsidiaries		-		103		(103)		-		-
	Intercompany dividends		-		2		(2)		-		-
	Proceeds from stock issuances		97		-		-		-		97
	Excess tax benefit on the exercise of stock options		10		-		-		-		10
	Dividends paid		(57)		-		-		-		(57)
	Purchase of treasury stock		(791)		-		-		-		(791)
	Other, net		-		(1)		1		-		-
CASH USED IN FINANCING ACTIVITIES			(383)		(262)		(96)		-		(741)
Effect of exchange rate changes on cash			-		(2)		(15)		-		(17)
Net (decrease) increase in cash and cash equivalents			(451)		(11)		(40)		10		(492)
Cash and cash equivalents at beginning of period			1,756		441		861		(150)		2,908
Cash and cash equivalents at end of period		$	1,305	$	430	$	821	$	(140)	$	2,416
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended August 31, 2013
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$	118	$	773	$	57	$	(19)	$	929
INVESTING ACTIVITIES
	Capital expenditures		-		(464)		(108)		-		(572)
	Proceeds from asset dispositions and other		-		10		-		-		10
CASH USED IN INVESTING ACTIVITIES			-		(454)		(108)		-		(562)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		229		(261)		32		-		-
	Payment on loan between subsidiaries		-		(29)		29		-		-
	Intercompany dividends		-		2		(2)		-		-
	Proceeds from stock issuances		131		-		-		-		131
	Excess tax benefit on the exercise of stock options		14		-		-		-		14
	Dividends paid		(48)		-		-		-		(48)
	Purchase of treasury stock		(278)		-		-		-		(278)
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES			48		(288)		59		-		(181)
Effect of exchange rate changes on cash			-		(5)		(2)		-		(7)
Net increase (decrease) in cash and cash equivalents			166		26		6		(19)		179
Cash and cash equivalents at beginning of period			3,892		405		717		(97)		4,917
Cash and cash equivalents at end of period		$	4,058	$	431	$	723	$	(116)	$	5,096

XML

General

3 Months Ended

Aug. 31, 2014

General [Abstract]

General

(1) General

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. These interim financial statements of FedEx Corporation (“FedEx”) have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission (“SEC”) instructions for interim financial information, and should be read in conjunction with our Annual Report on Form 10-K for the year ended May 31,2014(“Annual Report”). Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in our Annual Report.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly our financial position as of August 31,2014, and the results of our operations and cash flows for the three-month periods ended August 31, 2014 and 2013. Operating results for the three-month period ended August 31, 2014 are not necessarily indicative of the results that may be expected for the year ending May 31,2015.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2015 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. The pilots of Federal Express Corporation (“FedEx Express”), which represent a small number of FedEx Express's total employees, are employed under a collective bargaining agreement. The contract became amendable in March 2013, and the parties are currently in negotiations. In addition to our pilots at FedEx Express, certain non-U.S. employees are unionized.

STOCK-BASED COMPENSATION. We have two types of equity-based compensation: stock options and restricted stock. The key terms of the stock option and restricted stock awards granted under our incentive stock plans and all financial disclosures about these programs are set forth in our Annual Report.

Our stock-based compensation expense was$48 millionfor the three-month period ended August 31,2014and $45 million for the three-month period ended August 31, 2013. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report.

RECENT ACCOUNTING GUIDANCE. New accounting rules and disclosure requirements can significantly impact our reported results and the comparability of our financial statements. These matters are described in our Annual Report.

We believe that no other new accounting guidance was adopted or issued during the first three months of 2015 that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on our financial reporting.

STOCK REPURCHASE PROGRAM AND DIVIDENDS.In 2014, our Board of Directors authorized a new share repurchase program of up to 32 million shares of common stock. Repurchases were made at the company's discretion, based on ongoing assessments of the capital needs of the business, the market price of its common stock and general market conditions. During the first quarter of 2015, we repurchased 5.3 million shares of FedEx common stock at an average price of $148 per share for a total of $791 million. As of August 31, 2014, no shares remained under the existing share repurchase authorizations.

On August 15, 2014, our Board of Directors declared a quarterly dividend of $0.20 per share of common stock. The dividend will be paid on October 1, 2014 to stockholders of record as of the close of business on September 10, 2014. Each quarterly dividend payment is subject to review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis at the end of each fiscal year.

XML

Condensed Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Condensed Consolidated Statements of Income
REVENUES	$ 11,684	$ 11,024
OPERATING EXPENSES:
Salaries and employee benefits	4,189	4,077
Purchased transportation	2,054	1,879
Rentals and landing fees	660	640
Depreciation and amortization	651	639
Fuel	1,120	1,104
Maintenance and repairs	556	480
Other	1,467	1,410
OPERATING EXPENSES	10,697	10,229
OPERATING INCOME	987	795
OTHER INCOME (EXPENSE):
Interest, net	(48)	(27)
Other, net	(2)	(2)
OTHER INCOME (EXPENSE)	(50)	(29)
INCOME BEFORE INCOME TAXES	937	766
PROVISION FOR INCOME TAXES	331	277
NET INCOME	$ 606	$ 489
EARNINGS PER COMMON SHARE:
Basic	$ 2.13	$ 1.54
Diluted	$ 2.10	$ 1.53
DIVIDENDS DECLARED PER COMMON SHARE	$ 0.40	$ 0.30

XML

General (Policies)

3 Months Ended

Aug. 31, 2014

General (Policies) [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. These interim financial statements of FedEx Corporation (“FedEx”) have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission (“SEC”) instructions for interim financial information, and should be read in conjunction with our Annual Report on Form 10-K for the year ended May 31,2014(“Annual Report”). Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in our Annual Report.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly our financial position as of August 31,2014, and the results of our operations and cash flows for the three-month periods ended August 31, 2014 and 2013. Operating results for the three-month period ended August 31, 2014 are not necessarily indicative of the results that may be expected for the year ending May 31,2015.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2015 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

XML

Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Aug. 31, 2014	May 31, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 2,416	$ 2,908
Receivables, less allowances of $170 and $164	5,487	5,460
Spare parts, supplies and fuel, less allowances of $216 and $212	481	463
Deferred income taxes	497	522
Prepaid expenses and other	369	330
Total current assets	9,250	9,683
PROPERTY AND EQUIPMENT, AT COST	40,866	40,691
Less accumulated depreciation and amortization	21,442	21,141
Net property and equipment	19,424	19,550
OTHER LONG-TERM ASSETS
GOODWILL	2,775	2,790
Other assets	1,138	1,047
Total other long-term assets	3,913	3,837
ASSETS	32,587	33,070
CURRENT LIABILITIES
Current portion of long-term debt	1	1
Accrued salaries and employee benefits	1,103	1,277
Accounts payable	1,973	1,971
Accrued expenses	2,076	2,063
Total current liabilities	5,153	5,312
LONG-TERM DEBT, LESS CURRENT PORTION	4,735	4,736
OTHER LONG-TERM LIABILITIES
Deferred income taxes	2,107	2,114
Pension, postretirement healthcare and other benefit obligations	3,313	3,484
Self-insurance accruals	1,047	1,038
Deferred lease obligations	748	758
Deferred gains, principally related to aircraft transactions	200	206
Other liabilities	163	145
Total other long-term liabilities	7,578	7,745
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS' INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of August 31, 2014 and May 31, 2014	32	32
Additional paid-in capital	2,629	2,643
Retained earnings	20,921	20,429
Accumulated other comprehensive loss	(3,694)	(3,694)
Treasury stock, at cost	(4,767)	(4,133)
Total common stockholders' investment	15,121	15,277
LIABILITIES AND STOCKHOLDERS' INVESTMENT	$ 32,587	$ 33,070

XML

Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Aug. 31, 2014

Accumulated Other Comprehensive Income (Loss) (Tables) [Abstract]

Schedule Of Accumulated Other Comprehensive Income (Loss)

		2014		2013
Foreign currency translation gain (loss):
	Balance at beginning of period	$	77	$	102
	Translation adjustments		(31)		(79)
	Balance at end of period		46		23
Retirement plans adjustments:
	Balance at beginning of period		(3,771)		(3,922)
	Reclassifications from AOCI		31		42
	Balance at end of period		(3,740)		(3,880)
Accumulated other comprehensive loss at end of period		$	(3,694)	$	(3,857)

Reclassification Out Of Accumulated Other Comprehensive Income (Loss)

			Amount Reclassified from AOCI				Affected Line Item in the Income Statement
			2014		2013
Retirement plans:
	Amortization of actuarial losses and
		other	$	(78)	$	(95)	Salaries and employee benefits
	Amortization of prior service credits			29		28	Salaries and employee benefits
Total before tax				(49)		(67)
	Income tax benefit			18		25	Provision for income taxes
AOCI reclassifications, net of tax			$	(31)	$	(42)	Net income

XML

Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Condensed Consolidated Statement of Other Comprehensive Income
NET INCOME	$ 606	$ 489
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $9 in 2014 and $10 in 2013	(31)	(79)
Amortization of unrealized pension actuarial gains/losses and other, net of tax of $18 in 2014 and $25 in 2013	31	42
Other comprehensive income (loss)	0	(37)
COMPREHENSIVE INCOME	$ 606	$ 452

XML

Business Segment Information

3 Months Ended

Aug. 31, 2014

Business Segment Information [Abstract]

Business Segment Information

(6) Business Segment Information

We provide a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively under the respected FedEx brand. Our primary operating companies include FedEx Express, the world's largest express transportation company; FedEx Ground Package System, Inc. (“FedEx Ground”), a leading North American provider of small-package ground delivery services; and FedEx Freight, Inc. (“FedEx Freight”), a leading U.S. providerof less-than-truckload (“LTL”) freight services.

Our reportable segments include the following businesses:

FedEx Express Segment	FedEx Express (express transportation)
	FedEx Trade Networks (air and ocean freight forwarding and customs
		brokerage)
	FedEx SupplyChain Systems (logistics services)
FedEx Ground Segment	FedEx Ground (small-package ground delivery)
	FedEx SmartPost (small-parcel consolidator)
FedEx Freight Segment	FedEx Freight (LTL freight transportation)
	FedEx Custom Critical (time-critical transportation)
FedEx Services Segment	FedEx Services (sales, marketing, information technology, communications
		and back-office functions)
	FedEx TechConnect (customer service, technical support, billings
		and collections)
	FedEx Office (document and business services and package acceptance)

FedEx Services Segment

The FedEx Services segment operates combined sales, marketing, administrative and information technology functions in shared services operations that support our transportation businesses and allow us to obtain synergies from the combination of these functions. For the international regions of FedEx Express, some of these functions are performed on a regional basis by FedEx Express and reported in the FedEx Express segment in their natural expense line items.

The FedEx Services segment provides direct and indirect support to our transportation businesses, and we allocate all of the net operating costs of the FedEx Services segment (including the net operating results of FedEx Office) to reflect the full cost of operating our transportation businesses in the results of those segments. Within the FedEx Services segment allocation, the net operating results of FedEx Office, which are an immaterial component of our allocations, are allocated to FedEx Express and FedEx Ground. We review and evaluate the performance of our transportation segments based on operating income (inclusive of FedEx Services segment allocations). For the FedEx Services segment, performance is evaluated based on the impact of its total allocated net operating costs on our transportation segments.

Operating expenses for each of our transportation segments include the allocations from the FedEx Services segment to the respective transportation segments. These allocations also include charges and credits for administrative services provided between operating companies. The allocations of net operating costs are based on metrics such as relative revenues or estimated services provided. We believe these allocations approximate the net cost of providing these functions and our allocation methodologies are refined as necessary to reflect changes in our businesses.

During the first quarter of 2015, we ceased allocating to our transportation segments the costs associated with our corporate headquarters division. These costs included services related to general oversight functions, including executive officers and certain legal and finance functions. This change allows for additional transparency and improved management of our corporate oversight costs. Beginning in 2015, these costs are included in “Corporate, eliminations and other” in our segment reporting and reconciliations. Prior year amounts have been revised to conform to the current year segment presentation. This change did not impact our condensed consolidated financial statements included in Note 10.

Other Intersegment Transactions

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment. Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenues of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenues and expenses are eliminated in our consolidated results and are not separately identified in the following segment information,because the amounts are not material.

The following table provides a reconciliation of reportable segment revenues and operating income to our unaudited condensed consolidated financial statement totals for the three-month periods ended August 31 (in millions):

		2014		2013
Revenues
	FedEx Express segment	$	6,862	$	6,605
	FedEx Ground segment		2,960		2,730
	FedEx Freight segment		1,609		1,424
	FedEx Services segment		374		375
	Eliminations and other		(121)		(110)
		$	11,684	$	11,024
Operating Income
	FedEx Express segment (1)	$	369	$	273
	FedEx Ground segment(1)		545		483
	FedEx Freight segment (1)		168		99
	Corporate, eliminations and other(1)		(95)		(60)
		$	987	$	795
(1)	Prior year amounts have been revised to conform to the current year segment presentation regarding the allocation of corporate headquarters costs.

XML

Retirement Plans

3 Months Ended

Aug. 31, 2014

Retirement Plans [Abstract]

Retirement Plans

(5) Retirement Plans

We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans and postretirement healthcare plans. Key terms of our retirement plans are provided in our Annual Report. Our retirement plans costs for the three-month periods ended August 31 were as follows (in millions):

	2014		2013
U.S. domestic and international pension plans	$	68	$	121
U.S. domestic and international defined contribution plans		94		89
U.S. domestic and international postretirement healthcare plans		20		20
	$	182	$	230

Net periodic benefit cost of the pension and postretirement healthcare plans for the three-monthperiods ended August 31 included the following components (in millions):

	Pension Plans				Postretirement Healthcare Plans
	2014		2013		2014		2013
Service cost	$	164	$	164	$	10	$	10
Interest cost		275		263		10		10
Expected return on plan assets		(420)		(373)		-		-
Recognized actuarial losses and other		49		67		-		-
	$	68	$	121	$	20	$	20

Contributions to our tax qualified U.S. domestic pension plans (“U.S. Pension Plans”) for the three-month periods ended August 31 were as follows:

	2014		2013
Required	$	82	$	150
Voluntary		83		15
	$	165	$	165

In September 2014, we made anadditional required contribution of $165 million to our U.S. Pension Plans.Our U.S. Pension Plans have ample funds to meet expected benefit payments.

XML

Supplemental Cash Flow Information (Tables)

3 Months Ended

Aug. 31, 2014

Supplemental Cash Flow (Tables) [Abstract]

Supplemental Cash Flow Table

		2014		2013
Cash payments for:
	Interest (net of capitalized interest)	$	96	$	57
	Income taxes	$	190	$	138
	Income tax refunds received		(2)		(34)
	Cash tax payments (refunds), net	$	188	$	104

XML

Computation of Earnings Per Share (Tables)

3 Months Ended

Aug. 31, 2014

Computation Of Earnings Per Share (Tables) [Abstract]

Schedule of basic and diluted earnings per common share

		2014		2013
Basic earnings per common share:
Net earnings allocable to common shares(1)		$	605	$	489
Weighted-average common shares			285		316
Basic earnings per common share		$	2.13	$	1.54
Diluted earnings per common share:
Net earnings allocable to common shares(1)		$	605	$	489
Weighted-average common shares			285		316
Dilutive effect of share-based awards			4		3
Weighted-average diluted shares			289		319
Diluted earnings per common share		$	2.10	$	1.53
Anti-dilutive options excluded from diluted
	earnings per common share		2.1		9.8

(1) Net earnings available to participating securities were immaterial in all periods presented.

XML

Supplemental Cash Flow Information

3 Months Ended

Aug. 31, 2014

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

(9) Supplemental Cash Flow Information

Cash paid for interest expense and income taxes for the three-month periods ended August 31 was as follows (in millions):

		2014		2013
Cash payments for:
	Interest (net of capitalized interest)	$	96	$	57
	Income taxes	$	190	$	138
	Income tax refunds received		(2)		(34)
	Cash tax payments (refunds), net	$	188	$	104

XML

Commitments

3 Months Ended

Aug. 31, 2014

Commitments [Abstract]

Commitments

(7) Commitments

As of August 31, 2014, our purchase commitments under various contracts for the remainder of 2015 and annually thereafter were as follows (in millions):

		Aircraft and
		Aircraft-Related		Other(1)		Total
2015 (remainder)		$	995	$	1,006	$	2,001
2016			1,244		319		1,563
2017			959		171		1,130
2018			1,341		94		1,435
2019			860		55		915
Thereafter			4,461		102		4,563
Total		$	9,860	$	1,747	$	11,607
(1)	Primarily equipment, advertising contracts and, for the remainder of 2015, $495 million of quarterly contributions to our U.S. Pension Plans.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of August 31, 2014, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and nine Boeing 777 Freighter (“B777F”) aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act of 1926, as amended. Commitments to purchase aircraft in passenger configuration do not include the attendant costs to modify these aircraft for cargo transport unless we have entered into noncancelable commitments to modify such aircraft.  Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

We had $519 million in deposits and progress payments as of August 31, 2014 on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our consolidated balance sheets. In addition to our commitment to purchase B777Fs and B767Fs, our aircraft purchase commitments include the Boeing 757 (“B757”)aircraft in passenger configuration, which will require additional costs to modify for cargo transport. Aircraft and aircraft-related contracts are subject to price escalations. The following table is a summary of the key aircraft we are committed to purchase as of August 31, 2014 with the year of expected delivery:

	B757	B767F	B777F	Total
2015 (remainder)	7	12	-	19
2016	-	11	2	13
2017	-	11	-	11
2018	-	10	2	12
2019	-	4	2	6
Thereafter	-	-	12	12
Total	7	48	18	73

A summary of future minimum lease payments undernoncancelable operating leases with an initial or remaining term in excess of one year at August 31, 2014 is as follows (in millions):

	Operating Leases
	Aircraft				Total
	and Related		Facilities		Operating
	Equipment		and Other		Leases
2015 (remainder)	$	408	$	1,207	$	1,615
2016		453		1,536		1,989
2017		392		1,625		2,017
2018		326		1,203		1,529
2019		273		1,028		1,301
Thereafter		550		6,542		7,092
Total	$	2,402	$	13,141	$	15,543

Future minimum lease payments under capital leases were immaterial at August 31,2014.While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations.

XML

Contingencies

3 Months Ended

Aug. 31, 2014

Loss Contingency [Abstract]

Contingencies

(8) Contingencies

Wage-and-Hour.We are a defendant in a number of lawsuits containing various class-action allegations of wage-and-hour violations. The plaintiffs in these lawsuits allege, among other things, that they were forced to work “off the clock,” were not paid overtime or were not provided work breaks or other benefits. The complaints generally seek unspecified monetary damages, injunctive relief, or both. We do not believe that a material loss is reasonably possible with respect to any of these matters.

Independent Contractor — Lawsuits and State Administrative Proceedings.FedEx Ground is involved in numerous class-action lawsuits (including 26 that have been certified as class actions), individual lawsuits and state tax and other administrative proceedings that claim that the company's owner-operators should be treated as employees, rather than independent contractors.

Most of the class-action lawsuits were consolidated for administration of the pre-trial proceedings by a single federal court, the U.S. District Court for the Northern District of Indiana. The multidistrict litigation court granted class certification in 28 cases and denied it in 14 cases. On December 13, 2010, the court entered an opinion and order addressing all outstanding motions for summary judgment on the status of the owner-operators (i.e., independent contractor vs. employee). In sum, the court ruled on our summary judgment motions and entered judgment in favor of FedEx Ground on all claims in 20 of the 28 multidistrict litigation cases that had been certified as class actions, finding that the owner-operators in those cases were contractors as a matter of the law of 20 states. The plaintiffs filed notices of appeal in all of these 20 cases. The Seventh Circuit heard the appeal in the Kansas case in January 2012 and, in July 2012, issued an opinion that did not make a determination with respect to the correctness of the district court's decision and, instead, certified two questions to the Kansas Supreme Court related to the classification of the plaintiffs as independent contractors under the Kansas Wage Payment Act. The Kansas Supreme Court heard oral argument on November 5, 2013. The other 19 cases that are before the Seventh Circuit remain stayed pending a decision of the Kansas Supreme Court.

The multidistrict litigation court remanded the other eight certified class actions back to the district courts where they were originally filed because its summary judgment ruling did not completely dispose of all of the claims in those lawsuits. Four of the cases remain pending in their respective district courts, but three of these four matters settled for immaterial amounts. The courts have granted final approval of two of the three settlements, while the other settlement remains subject to court approval. One of the cases is on appeal with the Court of Appeals for the Eleventh Circuit. The other three cases, which had been decided in our favor by the respective district courts in Oregon and California, were appealed to the Ninth Circuit Court of Appeals.

On August 27, 2014, the Ninth Circuit reversed the district court decisions and held that the plaintiffs in California and Oregon were employees as a matter of law. While we do not agree with the court's decision and will ask the court to reconsider and petition for en banc review by the full Ninth Circuit Court of Appeals, during the first quarter of 2015 we established an accrual for the estimated probable loss in this case that was required to be recognized pursuant to applicable accounting standards. This amount was immaterial. Material exposure above the accrued amount, however, is reasonably possible, and accordingly we have undertaken a process to attempt to estimate a range of reasonably possible loss based on currently available information relating to the case. This process has included attempting to evaluate what facts may arise in the course of discovery and what legal rulings the courts may render and how these facts and rulings might impact FedEx Ground's loss. For a number of reasons, we are not currently able to estimate a range of reasonably possible loss in excess of the amount accrued. The number and identities of plaintiffs in these lawsuits are uncertain, as they are dependent on how the class of full-time drivers is defined and how many individuals will qualify based on whatever criteria may be established. In addition, the parties have conducted only very limited discovery into damages, which could vary considerably from plaintiff to plaintiff and be dependent on evidence pertaining to individual plaintiffs, which has yet to be produced in the case. Further, the range of potential loss could be impacted substantially by future rulings by the courts, including on the merits of the claims, on FedEx Ground's defenses, and on evidentiary issues.

With respect to the matters that are pending outside of the Ninth Circuit, it is reasonably possible that potential loss in some of these lawsuits or changes to the independent contractor status of FedEx Ground's owner-operators could be material. We have undertaken a process to attempt to estimate a range of reasonably possible loss based on currently available information relating to these cases. Similar to our analysis of loss contingency in the Ninth Circuit cases, this process has included attempting to evaluate what facts may arise in the course of discovery and what legal rulings the courts may render and how these facts and rulings might impact FedEx Ground's loss. As a consequence of many of the same factors described above, as well as others that are specific to these cases, we are not currently able to estimate a range of reasonably possible loss. We do not believe that a material loss is probable in these matters.

In addition, we are defending contractor-model cases that are not or are no longer part of the multidistrict litigation. These cases are in varying stages of litigation, and we do not expect to incur a material loss in any of these matters.

Adverse determinations in matters related to FedEx Ground's independent contractors, could, among other things, entitle certain of our owner-operators and their drivers to the reimbursement of certain expenses and to the benefit of wage-and-hour laws and result in employment and withholding tax and benefit liability for FedEx Ground, and could result in changes to the independent contractor status of FedEx Ground's owner-operators in certain jurisdictions. We believe that FedEx Ground's owner-operators are properly classified as independent contractors and that FedEx Ground is not an employer of the drivers of the company's independent contractors.

City and State of New York Cigarette Suit.On December 30, 2013, the City of New York filed suit against FedEx Express and FedEx Ground arising from our alleged shipments of cigarettes to New York City residents. The claims against FedEx Express were subsequently dismissed. On March 30, 2014, the complaint was amended adding the State of New York as a plaintiff. Beyond the addition of the State as a plaintiff, the amended complaint contains several amplifications of the previous claims. First, the claims now relate to four shippers, none of which continues to ship in our network. Second, the amended complaint contains a count for violation of the Assurance of Compliance (“AOC”) we had previously entered into with the State of New York, claiming that since 2006, FedEx has made shipments of cigarettes to residences in New York in violation of the AOC. Lastly, the amendment contains new theories of Racketeer Influenced and Corrupt Organizations Act violations. In May 2014, we filed a motion to dismiss almost all of the claims. Loss in this matter is reasonably possible, but the amount of any loss is expected to be immaterial.

Environmental Matters.SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that management reasonably believes could exceed $100,000.

In February 2014, FedEx Ground received oral communications from District Attorneys' Offices (representing California's county environmental authorities) and the California Attorney General's Office (representing the California Division of Toxic Substances Control) that they were seeking civil penalties for alleged violations of the state's hazardous waste regulations. Specifically, the California environmental authorities alleged that FedEx Ground improperly generates and/or handles, stores and transports hazardous waste from its stations to its hubs in California. In April 2014, FedEx Ground filed a declaratory judgment action in the United States District Court for the Eastern District of California against the Director of the California Division of Toxic Substances Control and the county District Attorneys with whom we have been negotiating. In June 2014, the California Attorney General filed a complaint against FedEx Ground in Sacramento County Superior Court alleging violations of FedEx Ground as described above. The County District Attorneys filed a similar complaint in Sacramento County Superior Court in July 2014. Loss in this matter is reasonably possible, however, the amount of any loss is expected to be immaterial.

On January 14, 2014, the U.S. Department of Justice (“DOJ”) issued a Grand Jury Subpoena to FedEx Express relating to an asbestos matter previously investigated by the U.S. Environmental Protection Agency. On May 1, 2014, the DOJ informed us that it had determined to continue to pursue the matter as a criminal case, citing seven asbestos-related regulatory violations associated with removal of roof materials from a hangar in Puerto Rico during cleaning and repair activity, as well as violation of waste disposal requirements. Loss is reasonably possible; however, the amount of any loss is expected to be immaterial.

Department of Justice Indictment – Internet Pharmacy Shipments.In the past, we received requests for information from the DOJ in the Northern District of California in connection with a criminal investigation relating to the transportation of packages for online pharmacies that may have shipped pharmaceuticals in violation of federal law. In July 2014, the DOJ filed a criminal indictment in the United States District Court for the Northern District of California in connection with the matter. A superseding indictment was filed in August 2014. The indictment alleges that FedEx Corporation, FedEx Express and FedEx Services, together with certain pharmacies, conspired to unlawfully distribute controlled substances, unlawfully distributed controlled substances and conspired to unlawfully distribute misbranded drugs. The superseding indictment adds conspiracy to launder money counts related to services provided to and payments from online pharmacies. We continue to believe that our employees have acted in good faith at all times and that we have not engaged in any illegal activities. Accordingly, we will vigorously defend ourselves in this matter. If we are convicted, remedies could include fines, penalties, forfeiture and compliance conditions. Given the early stage of this proceeding, we cannot estimate the amount or range of loss, if any; however, it is reasonably possible that it could be material if we are convicted.

Other Matters. In August 2010, a third-party consultant who works with shipping customers to negotiate lower rates filed a lawsuit in federal district court in California against FedEx and United Parcel Service, Inc. (“UPS”) alleging violations of U.S. antitrust law. This matter was dismissed in May 2011, but the court granted the plaintiff permission to file an amended complaint, which FedEx received in June 2011. In November 2011, the court granted our motion to dismiss this complaint, but again allowed the plaintiff to file an amended complaint. The plaintiff filed a new complaint in December 2011, and the matter remains pending before the court. In February 2011, shortly after the initial lawsuit was filed, we received a demand for the production of information and documents in connection with a civil investigation by the DOJ into the policies and practices of FedEx and UPS for dealing with third-party consultants who work with shipping customers to negotiate lower rates. In November 2012, the DOJ served a civil investigative demand on the third-party consultant seeking all pleadings, depositions and documents produced in the lawsuit. We are cooperating with the investigation, do not believe that we have engaged in any anti-competitive activities and will vigorously defend ourselves in any action that may result from the investigation. While the litigation proceedings and the DOJ investigation move forward, and the amount of loss, if any, is dependent on a number of factors that are not yet fully developed or resolved, the amount of any loss is expected to be immaterial.

On June 30, 2014, we received a Statement of Objections from the French Competition Authority (“FCA”) addressed to FedEx Express France, formerly known as TATEX, regarding an investigation by the FCA into anticompetitive behavior that is alleged to have occurred primarily in the framework of trade association meetings that included the former general managers of TATEX prior to our acquisition of that company in July 2012. Given the early stage of this matter, we cannot yet determine the amount or range of potential loss; however, it is reasonably possible that it could be material.

FedEx and its subsidiaries are subject to other legal proceedings that arise in the ordinary course of their business. In the opinion of management, the aggregate liability, if any, with respect to these other actions will not have a material adverse effect on our financial position, results of operations or cash flows.

XML

Condensed Consolidating Financial Statements

3 Months Ended

Aug. 31, 2014

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

(10) Condensed Consolidating Financial Statements

We are required to present condensed consolidating financial information in order for the subsidiary guarantors (other than FedEx Express) of our public debt to continue to be exempt from reporting under the Securities Exchange Act of 1934, as amended.

The guarantor subsidiaries, which are wholly owned by FedEx, guarantee $4.5 billion of our debt. The guarantees are full and unconditional and joint and several. Our guarantor subsidiaries were not determined using geographic, service line or other similar criteria, and as a result, the "Guarantor Subsidiaries" and "Non-guarantor Subsidiaries" columns each include portions of our domestic and international operations. Accordingly, this basis of presentation is not intended to present our financial condition, results of operations or cash flows for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting.

Condensed consolidating financial statements for our guarantor subsidiaries and non-guarantor subsidiaries are presented in the following tables (in millions):

CONDENSED CONSOLIDATING BALANCE SHEETS
(UNAUDITED)
August 31, 2014
						Guarantor		Non-guarantor
				Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	1,305	$	430	$	821	$	(140)	$	2,416
	Receivables, less allowances				-		4,341		1,177		(31)		5,487
	Spare parts, supplies, fuel, prepaid expenses
		and other, less allowances			34		750		66		-		850
	Deferred income taxes				-		474		23		-		497
			Total current assets		1,339		5,995		2,087		(171)		9,250
PROPERTY AND EQUIPMENT, AT COST					28		38,489		2,349		-		40,866
	Less accumulated depreciation and amortization				22		20,182		1,238		-		21,442
			Net property and equipment		6		18,307		1,111		-		19,424
INTERCOMPANY RECEIVABLE					-		1,177		1,409		(2,586)		-
GOODWILL					-		1,552		1,223		-		2,775
INVESTMENT IN SUBSIDIARIES					21,352		3,679		-		(25,031)		-
OTHER ASSETS					2,069		850		240		(2,021)		1,138
				$	24,766	$	31,560	$	6,070	$	(29,809)	$	32,587
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES
	Current portion of long-term debt			$	-	$	1	$	-	$	-	$	1
	Accrued salaries and employee benefits				32		915		156		-		1,103
	Accounts payable				63		1,398		683		(171)		1,973
	Accrued expenses				502		1,384		190		-		2,076
		Total current liabilities			597		3,698		1,029		(171)		5,153
LONG-TERM DEBT, LESS CURRENT PORTION					4,486		249		-		-		4,735
INTERCOMPANY PAYABLE					2,586		-		-		(2,586)		-
OTHER LONG-TERM LIABILITIES
	Deferred income taxes				-		4,042		86		(2,021)		2,107
	Other liabilities				1,976		3,238		257		-		5,471
		Total other long-term liabilities			1,976		7,280		343		(2,021)		7,578
STOCKHOLDERS' INVESTMENT					15,121		20,333		4,698		(25,031)		15,121
				$	24,766	$	31,560	$	6,070	$	(29,809)	$	32,587

CONDENSED CONSOLIDATING BALANCE SHEETS
May 31, 2014
						Guarantor		Non-guarantor
				Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	1,756	$	441	$	861	$	(150)	$	2,908
	Receivables, less allowances				2		4,338		1,151		(31)		5,460
	Spare parts, supplies, fuel, prepaid expenses
		and other, less allowances			59		674		60		-		793
	Deferred income taxes				-		501		21		-		522
			Total current assets		1,817		5,954		2,093		(181)		9,683
PROPERTY AND EQUIPMENT, AT COST					28		38,303		2,360		-		40,691
	Less accumulated depreciation and amortization				22		19,899		1,220		-		21,141
			Net property and equipment		6		18,404		1,140		-		19,550
INTERCOMPANY RECEIVABLE					-		1,058		1,265		(2,323)		-
GOODWILL					-		1,552		1,238		-		2,790
INVESTMENT IN SUBSIDIARIES					20,785		3,754		-		(24,539)		-
OTHER ASSETS					2,088		747		250		(2,038)		1,047
				$	24,696	$	31,469	$	5,986	$	(29,081)	$	33,070
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES
	Current portion of long-term debt			$	-	$	1	$	-	$	-	$	1
	Accrued salaries and employee benefits				55		1,042		180		-		1,277
	Accounts payable				2		1,530		620		(181)		1,971
	Accrued expenses				405		1,444		214		-		2,063
		Total current liabilities			462		4,017		1,014		(181)		5,312
LONG-TERM DEBT, LESS CURRENT PORTION					4,487		249		-		-		4,736
INTERCOMPANY PAYABLE					2,323		-		-		(2,323)		-
OTHER LONG-TERM LIABILITIES
	Deferred income taxes				-		4,059		93		(2,038)		2,114
	Other liabilities				2,147		3,230		254		-		5,631
		Total other long-term liabilities			2,147		7,289		347		(2,038)		7,745
STOCKHOLDERS' INVESTMENT					15,277		19,914		4,625		(24,539)		15,277
				$	24,696	$	31,469	$	5,986	$	(29,081)	$	33,070

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended August 31, 2014
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	9,769	$	2,004	$	(89)	$	11,684
OPERATING EXPENSES:
	Salaries and employee benefits		30		3,606		553		-		4,189
	Purchased transportation		-		1,386		711		(43)		2,054
	Rentals and landing fees		1		572		88		(1)		660
	Depreciation and amortization		-		595		56		-		651
	Fuel		-		1,095		25		-		1,120
	Maintenance and repairs		-		522		34		-		556
	Intercompany charges, net		(95)		2		93		-		-
	Other		64		1,165		283		(45)		1,467
			-		8,943		1,843		(89)		10,697
OPERATING INCOME			-		826		161		-		987
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		606		98		-		(704)		-
	Interest, net		(53)		4		1		-		(48)
	Intercompany charges, net		54		(59)		5		-		-
	Other, net		(1)		(3)		2		-		(2)
INCOME BEFORE INCOME TAXES			606		866		169		(704)		937
	Provision for income taxes		-		269		62		-		331
NET INCOME		$	606	$	597	$	107	$	(704)	$	606
COMPREHENSIVE INCOME		$	634	$	594	$	82	$	(704)	$	606
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended August 31, 2013
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	9,228	$	1,878	$	(82)	$	11,024
OPERATING EXPENSES:
	Salaries and employee benefits		31		3,514		532		-		4,077
	Purchased transportation		-		1,242		673		(36)		1,879
	Rentals and landing fees		1		558		82		(1)		640
	Depreciation and amortization		-		589		50		-		639
	Fuel		-		1,081		23		-		1,104
	Maintenance and repairs		-		449		31		-		480
	Intercompany charges, net		(61)		(6)		67		-		-
	Other		29		1,133		293		(45)		1,410
			-		8,560		1,751		(82)		10,229
OPERATING INCOME			-		668		127		-		795
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		489		110		-		(599)		-
	Interest, net		(34)		5		2		-		(27)
	Intercompany charges, net		35		(41)		6		-		-
	Other, net		(1)		(2)		1		-		(2)
INCOME BEFORE INCOME TAXES			489		740		136		(599)		766
	Provision for income taxes		-		232		45		-		277
NET INCOME		$	489	$	508	$	91	$	(599)	$	489
COMPREHENSIVE INCOME		$	528	$	507	$	16	$	(599)	$	452

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended August 31, 2014
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$	(67)	$	934	$	105	$	10	$	982
INVESTING ACTIVITIES
	Capital expenditures		(1)		(688)		(31)		-		(720)
	Proceeds from asset dispositions and other		-		7		(3)		-		4
CASH USED IN INVESTING ACTIVITIES			(1)		(681)		(34)		-		(716)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		358		(366)		8		-		-
	Payment on loan between subsidiaries		-		103		(103)		-		-
	Intercompany dividends		-		2		(2)		-		-
	Proceeds from stock issuances		97		-		-		-		97
	Excess tax benefit on the exercise of stock options		10		-		-		-		10
	Dividends paid		(57)		-		-		-		(57)
	Purchase of treasury stock		(791)		-		-		-		(791)
	Other, net		-		(1)		1		-		-
CASH USED IN FINANCING ACTIVITIES			(383)		(262)		(96)		-		(741)
Effect of exchange rate changes on cash			-		(2)		(15)		-		(17)
Net (decrease) increase in cash and cash equivalents			(451)		(11)		(40)		10		(492)
Cash and cash equivalents at beginning of period			1,756		441		861		(150)		2,908
Cash and cash equivalents at end of period		$	1,305	$	430	$	821	$	(140)	$	2,416
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended August 31, 2013
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$	118	$	773	$	57	$	(19)	$	929
INVESTING ACTIVITIES
	Capital expenditures		-		(464)		(108)		-		(572)
	Proceeds from asset dispositions and other		-		10		-		-		10
CASH USED IN INVESTING ACTIVITIES			-		(454)		(108)		-		(562)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		229		(261)		32		-		-
	Payment on loan between subsidiaries		-		(29)		29		-		-
	Intercompany dividends		-		2		(2)		-		-
	Proceeds from stock issuances		131		-		-		-		131
	Excess tax benefit on the exercise of stock options		14		-		-		-		14
	Dividends paid		(48)		-		-		-		(48)
	Purchase of treasury stock		(278)		-		-		-		(278)
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES			48		(288)		59		-		(181)
Effect of exchange rate changes on cash			-		(5)		(2)		-		(7)
Net increase (decrease) in cash and cash equivalents			166		26		6		(19)		179
Cash and cash equivalents at beginning of period			3,892		405		717		(97)		4,917
Cash and cash equivalents at end of period		$	4,058	$	431	$	723	$	(116)	$	5,096

XML

Commitments (Details 2)	Aug. 31, 2014
Schedule of Aircraft Commitments [Line Items]
2015 (remainder)	19
2016	13
2017	11
2018	12
2019	6
Thereafter	12
Total	73
Boeing 777 Freighter [Member]
Schedule of Aircraft Commitments [Line Items]
2016	2
2018	2
2019	2
Thereafter	12
Total	18
Boeing 757 [Member]
Schedule of Aircraft Commitments [Line Items]
2015 (remainder)	7
Total	7
Boeing 767 Freighter [Member]
Schedule of Aircraft Commitments [Line Items]
2015 (remainder)	12
2016	11
2017	11
2018	10
2019	4
Total	48

XML

Business Segment Information (Tables)

3 Months Ended

Aug. 31, 2014

Business Segment Information (Tables) [Abstract]

Schedule of Segment Information

		2014		2013
Revenues
	FedEx Express segment	$	6,862	$	6,605
	FedEx Ground segment		2,960		2,730
	FedEx Freight segment		1,609		1,424
	FedEx Services segment		374		375
	Eliminations and other		(121)		(110)
		$	11,684	$	11,024
Operating Income
	FedEx Express segment (1)	$	369	$	273
	FedEx Ground segment(1)		545		483
	FedEx Freight segment (1)		168		99
	Corporate, eliminations and other(1)		(95)		(60)
		$	987	$	795
(1)	Prior year amounts have been revised to conform to the current year segment presentation regarding the allocation of corporate headquarters costs.

XML

Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ (3,694)
Translation adjustment	(31)	(79)
Amortization of unrealized pension actuarial gains/losses and other, net of tax of $18 in 2014 and $25 in 2013	31	42
Ending balance	(3,694)	(3,857)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	4,189	4,077
PROVISION FOR INCOME TAXES	331	277
Amortization of actuarial losses [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	(78)	(95)
Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	(49)	(67)
PROVISION FOR INCOME TAXES	18	25
Net income	(31)	(42)
Reclassification Out Of Accumulated Other Comprehensive Income [Member] | Amortization of prior service credits [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	29	28
Foreign currency translation gain (loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	77	102
Translation adjustment	(31)	(79)
Ending balance	46	23
Retirement plans adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(3,771)	(3,922)
Reclassification from AOCI	31	42
Ending balance	$ (3,740)	$ (3,880)

XML

Condensed Consolidating Financial Statements (Details 4) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Condensed Financial Statements Captions [Line Items]
Cash provided by (used in) operating activities	$ 982	$ 929
Investing Activities:
Capital expenditures	(720)	(572)
Proceeds from asset dispositions and other	4	10
Cash used in investing activities	(716)	(562)
Financing Activities:
Proceeds from stock issuances	97	131
Excess tax benefit on the exercise of stock options	10	14
Dividends paid	(57)	(48)
Purchase of treasury stock	(791)	(278)
Cash (used in) provided by financing activities	(741)	(181)
Effect of exchange rate changes on cash	(17)	(7)
Net (decrease) increase in cash and cash equivalents	(492)	179
Cash and cash equivalents at beginning of period	2,908	4,917
Cash and cash equivalents at end of period	2,416	5,096
Parent Company Member
Condensed Financial Statements Captions [Line Items]
Cash provided by (used in) operating activities	(67)	118
Investing Activities:
Capital expenditures	(1)
Cash used in investing activities	(1)
Financing Activities:
Net transfers from (to) Parent	358	229
Proceeds from stock issuances	97	131
Excess tax benefit on the exercise of stock options	10	14
Dividends paid	(57)	(48)
Purchase of treasury stock	(791)	(278)
Cash (used in) provided by financing activities	(383)	48
Net (decrease) increase in cash and cash equivalents	(451)	166
Cash and cash equivalents at beginning of period	1,756	3,892
Cash and cash equivalents at end of period	1,305	4,058
Guarantor Subsidiaries Member
Condensed Financial Statements Captions [Line Items]
Cash provided by (used in) operating activities	934	773
Investing Activities:
Capital expenditures	(688)	(464)
Proceeds from asset dispositions and other	7	10
Cash used in investing activities	(681)	(454)
Financing Activities:
Net transfers from (to) Parent	(366)	(261)
Payment on loan between subsidiaries	103	(29)
Intercompany dividends	2	2
Other, net	(1)
Cash (used in) provided by financing activities	(262)	(288)
Effect of exchange rate changes on cash	(2)	(5)
Net (decrease) increase in cash and cash equivalents	(11)	26
Cash and cash equivalents at beginning of period	441	405
Cash and cash equivalents at end of period	430	431
Non Guarantor Subsidiaries Member
Condensed Financial Statements Captions [Line Items]
Cash provided by (used in) operating activities	105	57
Investing Activities:
Capital expenditures	(31)	(108)
Proceeds from asset dispositions and other	(3)
Cash used in investing activities	(34)	(108)
Financing Activities:
Net transfers from (to) Parent	8	32
Payment on loan between subsidiaries	(103)	29
Intercompany dividends	(2)	(2)
Other, net	1
Cash (used in) provided by financing activities	(96)	59
Effect of exchange rate changes on cash	(15)	(2)
Net (decrease) increase in cash and cash equivalents	(40)	6
Cash and cash equivalents at beginning of period	861	717
Cash and cash equivalents at end of period	821	723
Consolidation Eliminations Member
Condensed Financial Statements Captions [Line Items]
Cash provided by (used in) operating activities	10	(19)
Financing Activities:
Net (decrease) increase in cash and cash equivalents	10	(19)
Cash and cash equivalents at beginning of period	(150)	(97)
Cash and cash equivalents at end of period	$ (140)	$ (116)

XML

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Other Comprehensive Income, Tax Amounts
Foreign currency translation adjustments, tax	$ 9	$ 10
Amortization of unrealized pension actuarial gains/losses and other, tax	$ 18	$ 25

XML

Computation of Earnings Per Share

3 Months Ended

Aug. 31, 2014

Earnings Per Share [Abstract]

Computation of Earnings Per Share

(4) Computation of Earnings Per Share

The calculation of basic and diluted earnings per common share for the three-month periods ended August 31 was as follows (in millions, except per share amounts):

		2014		2013
Basic earnings per common share:
Net earnings allocable to common shares(1)		$	605	$	489
Weighted-average common shares			285		316
Basic earnings per common share		$	2.13	$	1.54
Diluted earnings per common share:
Net earnings allocable to common shares(1)		$	605	$	489
Weighted-average common shares			285		316
Dilutive effect of share-based awards			4		3
Weighted-average diluted shares			289		319
Diluted earnings per common share		$	2.10	$	1.53
Anti-dilutive options excluded from diluted
	earnings per common share		2.1		9.8

(1) Net earnings available to participating securities were immaterial in all periods presented.

XML

Financing Arrangements (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 31, 2014	May 31, 2014
Financing Arrangements (Details) [Line Items]
Line Of Credit Facility Maximum Borrowing Capacity	$ 1,000
Line Of Credit Facility Current Borrowing Capacity	1,000
Long Term Debt Exclusive of Capital Leases Carrying Value	4,700	4,700
Long Term Debt Exclusive Of Capital Leases Fair Value	$ 5,100	$ 5,000
Line of Credit Facility, Expiration Date	Mar. 01, 2018
Line Of Credit Facility Covenant Terms Maximum Leverage Ratio	70%
Line Of Credit Facility Covenant Terms Leverage Ratio	58%

XML

Condensed Consolidating Financial Statements (Details 1) (USD $) In Millions, unless otherwise specified	Aug. 31, 2014
Guarantor Obligations [Abstract]
Debt Guarantee	$ 4,500

XML

Retirement Plans (Tables)

3 Months Ended

Aug. 31, 2014

Retirement Plan (Tables) [Abstract]

Schedule of Retirement Plan Costs

	2014		2013
U.S. domestic and international pension plans	$	68	$	121
U.S. domestic and international defined contribution plans		94		89
U.S. domestic and international postretirement healthcare plans		20		20
	$	182	$	230

Schedule of Net Periodic Benefit Cost

	Pension Plans				Postretirement Healthcare Plans
	2014		2013		2014		2013
Service cost	$	164	$	164	$	10	$	10
Interest cost		275		263		10		10
Expected return on plan assets		(420)		(373)		-		-
Recognized actuarial losses and other		49		67		-		-
	$	68	$	121	$	20	$	20

Schedule of Pension Plans Contributions

	2014		2013
Required	$	82	$	150
Voluntary		83		15
	$	165	$	165