10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED November 30, 2017

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    ☒  No    ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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    ☒  No    ☐

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

Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐
		(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

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 December 18, 2017
Common Stock, par value $0.10 per share	267,889,623

FEDEX CORPORATION

INDEX

	PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets November 30, 2017 and May 31, 2017	3
Condensed Consolidated Statements of Income Three and Six Months Ended November 30, 2017 and November 30, 2016	5
Condensed Consolidated Statements of Comprehensive Income Three and Six Months Ended November 30, 2017 and November 30, 2016	6
Condensed Consolidated Statements of Cash Flows Six Months Ended November 30, 2017 and November 30, 2016	7
Notes to Condensed Consolidated Financial Statements	8
Report of Independent Registered Public Accounting Firm	26
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition	27
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	49
ITEM 4. Controls and Procedures	49
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	50
ITEM 1A. Risk Factors	50
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	51
ITEM 6. Exhibits	52
Signature	53
Exhibit Index	E-1
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 10.7
Exhibit 10.8
Exhibit 10.9
Exhibit 10.10
Exhibit 10.11
Exhibit 10.12
Exhibit 12.1
Exhibit 15.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 101.1 Interactive Data Files

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FEDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

	November 30, 2017 (Unaudited)		May 31, 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,768	$	3,969
Receivables, less allowances of $353 and $252		8,655		7,599
Spare parts, supplies and fuel, less allowances of $248 and $237		533		514
Prepaid expenses and other		925		546
Total current assets		12,881		12,628
PROPERTY AND EQUIPMENT, AT COST		53,240		50,626
Less accumulated depreciation and amortization		25,950		24,645
Net property and equipment		27,290		25,981
OTHER LONG-TERM ASSETS
Goodwill		7,325		7,154
Other assets		2,785		2,789
Total other long-term assets		10,110		9,943
	$	50,281	$	48,552

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

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FEDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE DATA)

	November 30, 2017 (Unaudited)			May 31, 2017
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings	$	250		$	—
Current portion of long-term debt		11			22
Accrued salaries and employee benefits		1,912			1,914
Accounts payable		3,147			2,752
Accrued expenses		2,907			3,230
Total current liabilities		8,227			7,918
LONG-TERM DEBT, LESS CURRENT PORTION		15,180			14,909
OTHER LONG-TERM LIABILITIES
Deferred income taxes		3,088			2,485
Pension, postretirement healthcare and other benefit obligations		3,868			4,487
Self-insurance accruals		1,651			1,494
Deferred lease obligations		633			531
Deferred gains, principally related to aircraft transactions		122			137
Other liabilities		457			518
Total other long-term liabilities		9,819			9,652
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS’ INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares    issued as of November 30, 2017 and May 31, 2017		32			32
Additional paid-in capital		3,055			3,005
Retained earnings		21,785			20,833
Accumulated other comprehensive loss		(434	)		(415	)
Treasury stock, at cost		(7,383	)		(7,382	)
Total common stockholders’ investment		17,055			16,073
	$	50,281		$	48,552

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

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FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2017			2016			2017			2016
REVENUES	$	16,313		$	14,931		$	31,610		$	29,594
OPERATING EXPENSES:
Salaries and employee benefits		5,742			5,353			11,260			10,664
Purchased transportation		3,840			3,431			7,285			6,671
Rentals and landing fees		835			802			1,653			1,592
Depreciation and amortization		756			740			1,507			1,479
Fuel		818			658			1,521			1,308
Maintenance and repairs		665			579			1,340			1,177
Other		2,395			2,201			4,665			4,272
		15,051			13,764			29,231			27,163
OPERATING INCOME		1,262			1,167			2,379			2,431
OTHER INCOME (EXPENSE):
Interest, net		(124	)		(119	)		(238	)		(232	)
Other, net		1			30			(20	)		21
		(123	)		(89	)		(258	)		(211	)
INCOME BEFORE INCOME TAXES		1,139			1,078			2,121			2,220
PROVISION FOR INCOME TAXES		364			378			750			805
NET INCOME	$	775		$	700		$	1,371		$	1,415
EARNINGS PER COMMON SHARE:
Basic	$	2.89		$	2.63		$	5.12		$	5.32
Diluted	$	2.84		$	2.59		$	5.03		$	5.24
DIVIDENDS DECLARED PER COMMON SHARE	$	0.50		$	0.40		$	1.50		$	1.20

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

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FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN MILLIONS)

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2017			2016			2017			2016
NET INCOME	$	775		$	700		$	1,371		$	1,415
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax of $7, $21, $18, and $16		(90	)		(230	)		19			(218	)
Amortization of prior service credit, net of tax of $11, $11, $22, and $22		(19	)		(19	)		(38	)		(38	)
		(109	)		(249	)		(19	)		(256	)
COMPREHENSIVE INCOME	$	666		$	451		$	1,352		$	1,159

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

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FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN MILLIONS)

	Six Months Ended
	November 30,
	2017			2016
Operating Activities:
Net income	$	1,371		$	1,415
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		1,507			1,479
Provision for uncollectible accounts		116			76
Stock-based compensation		103			93
Deferred income taxes and other noncash items		327			320
Gain from sale of investment		—			(35	)
Changes in assets and liabilities:
Receivables		(983	)		(513	)
Other assets		(338	)		(250	)
Accounts payable and other liabilities		(564	)		67
Other, net		(41	)		(17	)
Cash provided by operating activities		1,498			2,635
Investing Activities:
Capital expenditures		(2,621	)		(2,681	)
Business acquisitions, net of cash acquired		(44	)		—
Proceeds from asset dispositions and other		12			100
Cash used in investing activities		(2,653	)		(2,581	)
Financing Activities:
Proceeds from short-term borrowings		250			—
Principal payments on debt		(28	)		(43	)
Proceeds from stock issuances		205			164
Dividends paid		(268	)		(213	)
Purchase of treasury stock		(270	)		(334	)
Other, net		3			(5	)
Cash used in financing activities		(108	)		(431	)
Effect of exchange rate changes on cash		62			(98	)
Net decrease in cash and cash equivalents		(1,201	)		(475	)
Cash and cash equivalents at beginning of period		3,969			3,534
Cash and cash equivalents at end of period	$	2,768		$	3,059

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

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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, 2017  (“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 November 30, 2017, the results of our operations for the three- and six-month periods ended November 30, 2017 and 2016, and cash flows for the six-month periods ended November 30, 2017 and 2016. Operating results for the three- and six-month periods ended November 30, 2017 are not necessarily indicative of the results that may be expected for the year ending May 31, 2018.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2018 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

BUSINESS ACQUISITION. On October 13, 2017, FedEx acquired Northwest Research, Inc., a leader in inventory research and management, for $50 million in cash from operations. The majority of the purchase price was allocated to property, plant and equipment. The financial results of this acquired business are included in the FedEx Corporate Services, Inc. (“FedEx Services”) segment from the date of acquisition and were not material to our results of operations. Therefore, pro forma financial information has not been provided.

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. The pilots of Federal Express Corporation (“FedEx Express”), who represent a small number of its total employees, are employed under a collective bargaining agreement that took effect on November 2, 2015. This collective bargaining agreement is scheduled to become amendable in November 2021, after a six-year term. In addition to our pilots at FedEx Express, FedEx Supply Chain Distribution System, Inc. (“FedEx Supply Chain”) has a small number of employees who are members of unions, and 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 $41 million for the three-month period ended November 30, 2017 and $103 million for the six-month period ended November 30, 2017. Our stock-based compensation expense was $36 million for the three-month period ended November 30, 2016 and $93 million for the six-month period ended November 30, 2016. 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. We believe the following new accounting guidance is relevant to the readers of our financial statements.

During the first quarter of 2018, we early adopted the Accounting Standards Update issued by the Financial Accounting Standards Board (“FASB”) related to Intra-Entity Transfers of Assets Other Than Inventory. This update requires companies to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs, as opposed to when the assets are ultimately sold to an outside party. This new guidance had a minimal impact on our accounting and financial reporting for the second quarter and first half of 2018.

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On May 28, 2014, the FASB and International Accounting Standards Board issued a new accounting standard that will supersede virtually all existing revenue recognition guidance under generally accepted accounting principles in the United States. This standard will be effective for us beginning June 1, 2018 (fiscal 2019). The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided. The new guidance establishes a five-step approach for the recognition of revenue. We are continuing to complete the assessment of the impact this new standard will have on our consolidated financial statements and related disclosures, including ongoing contract reviews. We do not anticipate that the new guidance will have a material impact on our revenue recognition policies, practices or systems.

On February 25, 2016, the FASB issued a new lease accounting standard which requires lessees to put most leases on their balance sheets but recognize the expenses in their income statements in a manner similar to current practice. The new standard states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Expenses related to leases determined to be operating leases will be recognized on a straight-line basis, while those determined to be financing leases will be recognized following a front-loaded expense profile in which interest and amortization are presented separately in the income statement. Based on our lease portfolio, we currently anticipate recognizing a lease liability and related right-of-use asset on the balance sheet in excess of $13 billion with an immaterial impact on our income statement compared to the current lease accounting model. However, the ultimate impact of the standard will depend on the company’s lease portfolio as of the adoption date. We are currently in the process of evaluating our existing lease portfolios, including accumulating all of the necessary information required to properly account for the leases under the new standard. Additionally, we are implementing an enterprise-wide lease management system to assist in the accounting and are evaluating additional changes to our processes and internal controls to ensure we meet the standard’s reporting and disclosure requirements. These changes will be effective for our fiscal year beginning June 1, 2019 (fiscal 2020), with a modified retrospective adoption method to the beginning of 2018.

In March 2017, the FASB issued an Accounting Standards Update that changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. This new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component outside of income from operations. This standard will impact our operating income but will have no impact on our net income or earnings per share. For example, adoption of this guidance would have reduced operating income by $146 million in the second quarter and $292 million in the first half of 2018, and by $112 million in the second quarter and $224 million in the first half of 2017, but would not have impacted our net income in these periods. This new guidance will be effective for our fiscal year beginning June 1, 2018 (fiscal 2019) and will be applied retrospectively.

TREASURY SHARES. In January 2016, our Board of Directors authorized a share repurchase program of up to 25 million shares. Shares under the current repurchase program may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx common stock and general market conditions. No time limit was set for the completion of the program, and the program may be suspended or discontinued at any time.

During the second quarter of 2018, we repurchased 0.8 million shares of FedEx common stock at an average price of $220.67 per share for a total of $184 million. During the first half of 2018, we repurchased 1.2 million shares of FedEx common stock at an average price of $216.45 per share for a total of $270 million. As of November 30, 2017, 14.8 million shares remained under the share repurchase authorization.

DIVIDENDS DECLARED PER COMMON SHARE. On November 17, 2017, our Board of Directors declared a quarterly dividend of $0.50 per share of common stock. The dividend will be paid on January 2, 2018 to stockholders of record as of the close of business on December 11, 2017. 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.

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(2) Accumulated Other Comprehensive Income (Loss)

The following table provides changes in accumulated other comprehensive income (loss) (“AOCI”), net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended November 30 (in millions; amounts in parentheses indicate debits to AOCI):

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Foreign currency translation loss:
Balance at beginning of period	$	(576	)	$	(502	)	$	(685	)	$	(514	)
Translation adjustments		(90	)		(230	)		19			(218	)
Balance at end of period		(666	)		(732	)		(666	)		(732	)
Retirement plans adjustments:
Balance at beginning of period		251			326			270			345
Reclassifications from AOCI		(19	)		(19	)		(38	)		(38	)
Balance at end of period		232			307			232			307
Accumulated other comprehensive (loss) at end of period	$	(434	)	$	(425	)	$	(434	)	$	(425	)

The following table presents details of the reclassifications from AOCI for the periods ended November 30 (in millions; amounts in parentheses indicate debits to earnings):

	Amount Reclassified from AOCI												Affected Line Item in the Income Statement
	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Amortization of retirement plans    prior service credits, before tax	$	30		$	30		$	60		$	60		Salaries and employee benefits
Income tax benefit		(11	)		(11	)		(22	)		(22	)	Provision for income taxes
AOCI reclassifications, net of tax	$	19		$	19		$	38		$	38		Net income

(3) Financing Arrangements

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

We have a five-year $1.75 billion revolving credit facility that expires in November 2020. The facility, which includes a $500 million letter of credit sublimit, is available to finance our operations and other cash flow needs. The agreement contains a financial covenant, which requires us to maintain a ratio of debt to consolidated earnings (excluding non-cash pension mark-to-market adjustments and non-cash asset impairment charges) before interest, taxes, depreciation and amortization (“adjusted EBITDA”) of not more than 3.5 to 1.0, calculated as of the end of the applicable quarter on a rolling four-quarters basis. The ratio of our debt to adjusted EBITDA was 1.9 to 1.0 at November 30, 2017. We believe this covenant is the 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 financial 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.

During the second quarter of 2018, we issued $250 million of commercial paper, providing us with additional short-term liquidity flexibility. Our commercial paper program is backed by unused commitments under the revolving credit facility and borrowings under the program reduce the amount available under the credit facility. As of November 30, 2017, $250 million of commercial paper and $255 million in letters of credit were outstanding, leaving $1.245 billion available under the revolving credit facility for future borrowings.

Long-term debt, exclusive of capital leases, had carrying values of $15.1 billion at November 30, 2017 and $14.9 billion at May 31, 2017, compared with estimated fair values of $15.9 billion at November 30, 2017 and $15.5 billion at May 31, 2017. The annualized weighted average interest rate on long-term debt was 3.6% for the six-months ended November 30, 2017. 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.

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(4) Computation of Earnings Per Share

The calculation of basic and diluted earnings per common share for the periods ended November 30 was as follows (in millions, except per share amounts):

	Three Months Ended				Six Months Ended
	2017		2016		2017		2016
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	774	$	700	$	1,369	$	1,414
Weighted-average common shares		268		266		268		266
Basic earnings per common share	$	2.89	$	2.63	$	5.12	$	5.32
Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	774	$	700	$	1,369	$	1,414
Weighted-average common shares		268		266		268		266
Dilutive effect of share-based awards		4		4		4		4
Weighted-average diluted shares		272		270		272		270
Diluted earnings per common share	$	2.84	$	2.59	$	5.03	$	5.24
Anti-dilutive options excluded from diluted earnings per    common share		2.9		5.1		3.0		5.1

⁽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 periods ended November 30 were as follows (in millions):

	Three Months Ended				Six Months Ended
	2017		2016		2017		2016
Defined benefit pension plans	$	37	$	58	$	74	$	116
Defined contribution plans		124		112		251		231
Postretirement healthcare plans		18		19		37		38
	$	179	$	189	$	362	$	385

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Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended November 30 included the following components (in millions):

	Three Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2017			2016			2017			2016			2017		2016
Service cost	$	170		$	160		$	23		$	20		$	9	$	9
Interest cost		278			282			13			11			9		10
Expected return on plan assets		(406	)		(375	)		(11	)		(11	)		—		—
Amortization of prior service credit and other		(29	)		(30	)		(1	)		1			—		—
	$	13		$	37		$	24		$	21		$	18	$	19
	Six Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2017			2016			2017			2016			2017		2016
Service cost	$	340		$	319		$	46		$	41		$	18	$	18
Interest cost		557			564			25			22			19		20
Expected return on plan assets		(812	)		(751	)		(22	)		(21	)		—		—
Amortization of prior service credit and other		(59	)		(59	)		(1	)		1			—		—
	$	26		$	73		$	48		$	43		$	37	$	38

Contributions to our tax-qualified U.S. domestic pension plans for the six-month periods ended November 30 were as follows (in millions):

	2017		2016
Required	$	268	$	250
Voluntary		482		250
	$	750	$	500

(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 are FedEx Express, including TNT Express B.V. (“TNT 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 Services, form the core of our reportable segments.

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Our reportable segments include the following businesses:

FedEx Express Segment	FedEx Express (express transportation)
	TNT Express (international express transportation, small-package ground delivery and freight transportation)
	FedEx Trade Networks (air and ocean freight forwarding, customs brokerage and cross-border enablement technology and solutions)
FedEx Ground Segment	FedEx Ground (small-package ground delivery)
	FedEx Supply Chain (third-party logistics)
FedEx Freight Segment	FedEx Freight (LTL freight transportation)
	FedEx Custom Critical (time-critical transportation)
FedEx Services Segment	FedEx Services (sales, marketing, information technology, communications, customer service, technical support, billing and collection services and back-office functions)
	FedEx Office (document and business services and package acceptance)

As discussed in our Annual Report, in the first quarter of 2018, we began to report TNT Express as part of the FedEx Express segment. Prior year amounts have been revised to conform to the current year presentation.

FedEx Services Segment

The FedEx Services segment operates combined sales, marketing, administrative and information technology functions 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 and reported in their natural expense line items. The FedEx Services segment includes: FedEx Services, which provides sales, marketing, information technology, communications, customer service, technical support, billing and collection services for U.S. customers of our major business units and certain back-office support to our other companies; and FedEx Office and Print Services, Inc. (“FedEx Office”), which provides an array of document and business services and retail access to our customers for our package transportation businesses.

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. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our businesses.

Eliminations, Corporate and Other

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.

Corporate and other includes corporate headquarters costs for executive officers and certain legal and financial functions, as well as certain other costs and credits not attributed to our core business. These costs are not allocated to the business segments.

- 13 -

The following table provides a reconciliation of reportable segment revenues and operating income to our unaudited condensed consolidated financial statement totals for the periods ended November 30 (in millions):

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Revenues
FedEx Express segment	$	9,354		$	8,642		$	18,006		$	17,102
FedEx Ground segment		4,929			4,419			9,568			8,709
FedEx Freight segment		1,762			1,597			3,514			3,255
FedEx Services segment		416			414			816			809
Eliminations and other		(148	)		(141	)		(294	)		(281	)
	$	16,313		$	14,931		$	31,610		$	29,594
Operating Income
FedEx Express segment	$	717		$	706		$	1,150		$	1,316
FedEx Ground segment		521			465			1,147			1,075
FedEx Freight segment		118			88			294			223
Eliminations, corporate and other		(94	)		(92	)		(212	)		(183	)
	$	1,262		$	1,167		$	2,379		$	2,431

(7) Commitments

As of November 30, 2017, our purchase commitments under various contracts for the remainder of 2018 and annually thereafter were as follows (in millions):

	Aircraft and Aircraft-Related		Other(1)		Total
2018 (remainder)	$	870	$	469	$	1,339
2019		1,723		679		2,402
2020		1,965		525		2,490
2021		1,488		386		1,874
2022		1,451		235		1,686
Thereafter		3,334		499		3,833
Total	$	10,831	$	2,793	$	13,624

⁽¹⁾ Primarily equipment and advertising contracts.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of November 30, 2017, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and six 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. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

During the second quarter of 2018, FedEx Express entered into an agreement to purchase 50 Cessna SkyCourier 408 aircraft with options to purchase up to 50 additional Cessna SkyCourier 408 aircraft. The 50 firm-order Cessna SkyCourier 408 aircraft are expected to be delivered from fiscal 2021 through 2024.

During the second quarter of 2018, FedEx Express entered into an agreement to purchase 30 ATR 72-600F aircraft with options to purchase up to 20 additional ATR 72-600F aircraft. The 30 firm-order ATR 72-600F aircraft are expected to be delivered from fiscal 2021 through 2026.

- 14 -

We had $684 million in deposits and progress payments as of November 30, 2017 on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our consolidated balance sheets. 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 November 30, 2017 with the year of expected delivery:

	Cessna SkyCourier 408		ATR 72-600F		B767F		B777F		Total
2018 (remainder)		-		-		8		1		9
2019		-		-		15		2		17
2020		-		-		16		3		19
2021		12		5		10		3		30
2022		12		6		10		4		32
Thereafter		26		19		6		-		51
Total		50		30		65		13		158

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at November 30, 2017 is as follows (in millions):

	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2018 (remainder)	$	335	$	1,113	$	1,448
2019		343		2,014		2,357
2020		261		1,799		2,060
2021		203		1,623		1,826
2022		185		1,464		1,649
Thereafter		175		8,746		8,921
Total	$	1,502	$	16,759	$	18,261

Future minimum lease payments under capital leases were immaterial at November 30, 2017. 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

Independent Contractor — Lawsuits and Administrative Proceedings. During the second quarter of 2018, the final objector to the $228 million settlement in the case that was remanded by the multidistrict litigation court to California and appealed to the Ninth Circuit Court of Appeals settled with plaintiffs’ counsel and FedEx Ground paid the settlement amount.

FedEx Ground is involved in lawsuits and administrative proceedings claiming that owner-operators engaged under a contractor model no longer in use should have been treated as employees of FedEx Ground, rather than independent contractors. In addition, we are defending joint-employer cases where it is alleged that FedEx Ground should be treated as an employer of the drivers employed by owner-operators engaged by FedEx Ground. These cases are in varying stages of litigation, and we are not currently able to estimate an amount or range of potential loss in all of these matters. However, we do not expect to incur, individually or in the aggregate, a material loss in these matters. Nevertheless, adverse determinations in matters related to owner-operators engaged by FedEx Ground could, among other things, entitle certain owner-operators to the reimbursement of certain expenses, and their drivers to the benefit of wage-and-hour laws, and result in employment and withholding tax and benefit liability for FedEx Ground. We believe that owner-operators engaged by FedEx Ground are properly classified as independent contractors and that FedEx Ground is not an employer of the drivers employed by these owner-operators.

- 15 -

City and State of New York Cigarette Suit. The City of New York and the State of New York filed two related lawsuits against FedEx Ground in December 2013 and November 2014 arising from FedEx Ground’s alleged shipments of cigarettes to New York residents in contravention of several statutes, including the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and New York’s Public Health Law, as well as common law nuisance claims. In April 2016, the two lawsuits were consolidated and will now proceed as one lawsuit. The first-filed lawsuit alleges that FedEx Ground provided delivery services on behalf of four shippers, and the second-filed lawsuit alleges that FedEx Ground provided delivery services on behalf of six additional shippers; none of these shippers continue to ship in our network. Following motions to dismiss filed in both lawsuits, some of the claims were dismissed entirely or limited. In the first-filed lawsuit, the New York Public Health Law and common law nuisance claims were dismissed and the plaintiffs voluntarily dismissed another claim. In the second-filed lawsuit, the common law nuisance claim was dismissed entirely and the New York Public Health Law claim has been limited to claims arising after September 27, 2013, when an amendment to that law provided enforcement authority to the City of New York and State of New York. Other claims, including the RICO claims, remain in both lawsuits. The likelihood of loss is reasonably possible, but the amount or range of loss, if any, cannot be estimated at this stage of the litigation, but we expect the amount of any loss to be immaterial.

On July 10, 2017, the City of New York and the State of New York filed a third lawsuit against FedEx Ground and included FedEx Freight as a co-defendant. This new case identifies no shippers or shipments, but generally alleges violations of the same laws that are the subject of the other two lawsuits. The amount or range of loss, if any, cannot be estimated at this stage of the lawsuit.

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.

On September 9, 2016, FedEx Supply Chain received a written offer from several District Attorneys’ Offices in California to settle a civil action that the District Attorneys intend to file against FedEx Supply Chain for alleged violations of the state’s hazardous waste regulations. Specifically, the District Attorneys’ Offices allege FedEx Supply Chain unlawfully disposed of hazardous waste at one of its California facilities and caused the illegal transportation and disposal of hazardous waste from the retail stores of a FedEx Supply Chain customer at this same facility. The District Attorneys allege these violations began in 2006 and continued until the facility closed in the spring of 2015. We believe an immaterial loss in this matter is probable, and we will pursue all available remedies against the sellers of GENCO to recover any losses in this matter.

Other Matters. During the third quarter of 2017, FedEx Trade Networks informed U.S. Customs and Border Protection (“CBP”) that in connection with certain customs entries it may have made improper claims for (i) reduced-duty treatment and (ii) duty-free treatment. In the fourth quarter of 2017 we established accruals totaling $39.3 million for the then-current estimated probable loss for these matters. In the first quarter of 2018, FedEx Trade Networks tendered payments to CBP in these matters totaling $46.5 million, and an additional expense of $7.2 million was recognized. CBP acknowledged receipt of the amounts tendered in these matters, and we are awaiting a response indicating whether these matters are fully resolved.

FedEx and its subsidiaries are subject to other legal proceedings that arise in the ordinary course of business, including certain lawsuits containing various class-action allegations of wage-and-hour violations in which plaintiffs claim, 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. 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 six-month periods ended November 30 was as follows (in millions):

	2017			2016
Cash payments for:
Interest (net of capitalized interest)	$	238		$	232
Income taxes	$	617		$	216
Income tax refunds received		(19	)		(13	)
Cash tax payments, net	$	598		$	203

- 16 -

(10) Condensed Consolidating Financial Statements

We are required to present condensed consolidating financial information in order for the subsidiary guarantors 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 100% owned by FedEx, guarantee $15.0 billion of our long-term 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 financial statements for our guarantor subsidiaries and non-guarantor subsidiaries are presented in the following tables (in millions):

CONDENSED CONSOLIDATING BALANCE SHEETS

(UNAUDITED)

November 30, 2017

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	959	$	342	$	1,495	$	(28	)	$	2,768
Receivables, less allowances		2		5,340		3,441		(128	)		8,655
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		286		931		241		—			1,458
Total current assets		1,247		6,613		5,177		(156	)		12,881
PROPERTY AND EQUIPMENT, AT COST		22		49,585		3,633		—			53,240
Less accumulated depreciation and amortization		18		24,349		1,583		—			25,950
Net property and equipment		4		25,236		2,050		—			27,290
INTERCOMPANY RECEIVABLE		1,175		3,184		—		(4,359	)		—
GOODWILL		—		1,571		5,754		—			7,325
INVESTMENT IN SUBSIDIARIES		29,116		2,903		—		(32,019	)		—
OTHER ASSETS		3,501		1,197		1,297		(3,210	)		2,785
	$	35,043	$	40,704	$	14,278	$	(39,744	)	$	50,281
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings	$	250	$	—	$	—	$	—		$	250
Current portion of long-term debt		—		1		10		—			11
Accrued salaries and employee benefits		59		1,325		528		—			1,912
Accounts payable		153		1,636		1,514		(156	)		3,147
Accrued expenses		451		1,621		835		—			2,907
Total current liabilities		913		4,583		2,887		(156	)		8,227
LONG-TERM DEBT, LESS CURRENT PORTION		14,872		289		19		—			15,180
INTERCOMPANY PAYABLE		—		—		4,359		(4,359	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		6,102		196		(3,210	)		3,088
Other liabilities		2,203		3,642		886		—			6,731
Total other long-term liabilities		2,203		9,744		1,082		(3,210	)		9,819
STOCKHOLDERS’ INVESTMENT		17,055		26,088		5,931		(32,019	)		17,055
	$	35,043	$	40,704	$	14,278	$	(39,744	)	$	50,281

- 18 -

CONDENSED CONSOLIDATING BALANCE SHEETS

May 31, 2017

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,884	$	325	$	1,807	$	(47	)	$	3,969
Receivables, less allowances		3		4,729		2,928		(61	)		7,599
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		25		787		248		—			1,060
Total current assets		1,912		5,841		4,983		(108	)		12,628
PROPERTY AND EQUIPMENT, AT COST		22		47,201		3,403		—			50,626
Less accumulated depreciation and amortization		18		23,211		1,416		—			24,645
Net property and equipment		4		23,990		1,987		—			25,981
INTERCOMPANY RECEIVABLE		1,521		2,607		—		(4,128	)		—
GOODWILL		—		1,571		5,583		—			7,154
INVESTMENT IN SUBSIDIARIES		27,712		2,636		—		(30,348	)		—
OTHER ASSETS		3,494		1,271		1,249		(3,225	)		2,789
	$	34,643	$	37,916	$	13,802	$	(37,809	)	$	48,552
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	—	$	9	$	13	$	—		$	22
Accrued salaries and employee benefits		72		1,335		507		—			1,914
Accounts payable		10		1,411		1,439		(108	)		2,752
Accrued expenses		991		1,522		717		—			3,230
Total current liabilities		1,073		4,277		2,676		(108	)		7,918
LONG-TERM DEBT, LESS CURRENT PORTION		14,641		244		24		—			14,909
INTERCOMPANY PAYABLE		—		—		4,128		(4,128	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		5,472		238		(3,225	)		2,485
Other liabilities		2,856		3,448		863		—			7,167
Total other long-term liabilities		2,856		8,920		1,101		(3,225	)		9,652
STOCKHOLDERS’ INVESTMENT		16,073		24,475		5,873		(30,348	)		16,073
	$	34,643	$	37,916	$	13,802	$	(37,809	)	$	48,552

- 19 -

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	12,044		$	4,362		$	(93	)	$	16,313
OPERATING EXPENSES:
Salaries and employee benefits		35			4,439			1,268			—			5,742
Purchased transportation		—			2,314			1,576			(50	)		3,840
Rentals and landing fees		1			640			197			(3	)		835
Depreciation and amortization		—			649			107			—			756
Fuel		—			746			72			—			818
Maintenance and repairs		—			584			81			—			665
Intercompany charges, net		(95	)		—			95			—			—
Other		59			1,592			784			(40	)		2,395
		—			10,964			4,180			(93	)		15,051
OPERATING INCOME		—			1,080			182			—			1,262
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		775			40			—			(815	)		—
Interest, net		(130	)		11			(5	)		—			(124	)
Intercompany charges, net		132			(71	)		(61	)		—			—
Other, net		(2	)		(8	)		11			—			1
INCOME BEFORE INCOME TAXES		775			1,052			127			(815	)		1,139
Provision for income taxes		—			225			139			—			364
NET INCOME	$	775		$	827		$	(12	)	$	(815	)	$	775
COMPREHENSIVE INCOME	$	756		$	817		$	(92	)	$	(815	)	$	666

- 20 -

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	10,997		$	4,004		$	(70	)	$	14,931
OPERATING EXPENSES:
Salaries and employee benefits		29			4,161			1,163			—			5,353
Purchased transportation		—			2,074			1,383			(26	)		3,431
Rentals and landing fees		2			625			177			(2	)		802
Depreciation and amortization		—			634			106			—			740
Fuel		—			584			74			—			658
Maintenance and repairs		—			504			75			—			579
Intercompany charges, net		(89	)		38			51			—			—
Other		58			1,429			756			(42	)		2,201
		—			10,049			3,785			(70	)		13,764
OPERATING INCOME		—			948			219			—			1,167
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		700			54			—			(754	)		—
Interest, net		(123	)		4			—			—			(119	)
Intercompany charges, net		124			(64	)		(60	)		—			—
Other, net		(1	)		(5	)		36			—			30
INCOME BEFORE INCOME TAXES		700			937			195			(754	)		1,078
Provision for income taxes		—			291			87			—			378
NET INCOME	$	700		$	646		$	108		$	(754	)	$	700
COMPREHENSIVE INCOME	$	682		$	635		$	(112	)	$	(754	)	$	451

- 21 -

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Six Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	23,611		$	8,216		$	(217	)	$	31,610
OPERATING EXPENSES:
Salaries and employee benefits		73			8,666			2,521			—			11,260
Purchased transportation		—			4,377			3,040			(132	)		7,285
Rentals and landing fees		2			1,267			388			(4	)		1,653
Depreciation and amortization		—			1,288			219			—			1,507
Fuel		—			1,383			138			—			1,521
Maintenance and repairs		—			1,186			154			—			1,340
Intercompany charges, net		(211	)		113			98			—			—
Other		136			3,068			1,542			(81	)		4,665
		—			21,348			8,100			(217	)		29,231
OPERATING INCOME		—			2,263			116			—			2,379
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,371			37			—			(1,408	)		—
Interest, net		(259	)		24			(3	)		—			(238	)
Intercompany charges, net		263			(142	)		(121	)		—			—
Other, net		(4	)		(16	)		—			—			(20	)
INCOME BEFORE INCOME TAXES		1,371			2,166			(8	)		(1,408	)		2,121
Provision for income taxes		—			624			126			—			750
NET INCOME	$	1,371		$	1,542		$	(134	)	$	(1,408	)	$	1,371
COMPREHENSIVE INCOME	$	1,334		$	1,536		$	(110	)	$	(1,408	)	$	1,352

- 22 -

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Six Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	21,900		$	7,834		$	(140	)	$	29,594
OPERATING EXPENSES:
Salaries and employee benefits		65			8,267			2,332			—			10,664
Purchased transportation		—			3,991			2,734			(54	)		6,671
Rentals and landing fees		3			1,245			347			(3	)		1,592
Depreciation and amortization		—			1,245			234			—			1,479
Fuel		—			1,162			146			—			1,308
Maintenance and repairs		—			1,030			147			—			1,177
Intercompany charges, net		(179	)		100			79			—			—
Other		111			2,802			1,442			(83	)		4,272
		—			19,842			7,461			(140	)		27,163
OPERATING INCOME		—			2,058			373			—			2,431
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,415			110			—			(1,525	)		—
Interest, net		(245	)		13			—			—			(232	)
Intercompany charges, net		246			(145	)		(101	)		—			—
Other, net		(1	)		(10	)		32			—			21
INCOME BEFORE INCOME TAXES		1,415			2,026			304			(1,525	)		2,220
Provision for income taxes		—			671			134			—			805
NET INCOME	$	1,415		$	1,355		$	170		$	(1,525	)	$	1,415
COMPREHENSIVE INCOME	$	1,378		$	1,337		$	(31	)	$	(1,525	)	$	1,159

- 23 -

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(1,959	)	$	3,504		$	(66	)	$	19		$	1,498
INVESTING ACTIVITIES
Capital expenditures		—			(2,474	)		(147	)		—			(2,621	)
Business acquisitions, net of cash acquired		—			(44	)		—			—			(44	)
Proceeds from asset dispositions and other		—			12			—			—			12
CASH USED IN INVESTING    ACTIVITIES		—			(2,506	)		(147	)		—			(2,653	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		947			(1,019	)		72			—			—
Payment on loan between subsidiaries		167			—			(167	)		—			—
Proceeds from short-term borrowings		250			—			—			—			250
Principal payments on debt		—			(18	)		(10	)		—			(28	)
Proceeds from stock issuances		205			—			—			—			205
Dividends paid		(268	)		—			—			—			(268	)
Purchase of treasury stock		(270	)		—			—			—			(270	)
Other, net		3			—			—			—			3
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		1,034			(1,037	)		(105	)		—			(108	)
Effect of exchange rate changes on cash		—			56			6			—			62
Net (decrease) increase in cash and cash equivalents		(925	)		17			(312	)		19			(1,201	)
Cash and cash equivalents at beginning of period		1,884			325			1,807			(47	)		3,969
Cash and cash equivalents at end of period	$	959		$	342		$	1,495		$	(28	)	$	2,768

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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(376	)	$	2,550		$	473		$	(12	)	$	2,635
INVESTING ACTIVITIES
Capital expenditures		—			(2,455	)		(226	)		—			(2,681	)
Proceeds from asset dispositions and other		84			13			3			—			100
CASH USED IN INVESTING ACTIVITIES		84			(2,442	)		(223	)		—			(2,581	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		24			(94	)		70			—			—
Payment on loan between subsidiaries		8			(15	)		7			—			—
Intercompany dividends		—			1			(1	)		—			—
Principal payments on debt		—			(31	)		(12	)		—			(43	)
Proceeds from stock issuances		164			—			—			—			164
Dividends paid		(213	)		—			—			—			(213	)
Purchase of treasury stock		(334	)		—			—			—			(334	)
Other, net		4			(2	)		(7	)		—			(5	)
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		(347	)		(141	)		57			—			(431	)
Effect of exchange rate changes on cash		(5	)		1			(94	)		—			(98	)
Net (decrease) increase in cash and cash equivalents		(644	)		(32	)		213			(12	)		(475	)
Cash and cash equivalents at beginning of period		1,974			326			1,277			(43	)		3,534
Cash and cash equivalents at end of period	$	1,330		$	294		$	1,490		$	(55	)	$	3,059

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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 November 30, 2017, and the related condensed consolidated statements of income and comprehensive income for the three-month and six-month periods ended November 30, 2017 and November 30, 2016 and the condensed consolidated statements of cash flows for the six-month periods ended November 30, 2017 and November 30, 2016. 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 (United States), 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, 2017, 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 we expressed an unqualified audit opinion on those consolidated financial statements in our report dated July 17, 2017. In our opinion, the accompanying condensed consolidated balance sheet of FedEx Corporation as of May 31, 2017, 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

December 20, 2017

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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, 2017 (“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”), including TNT Express B.V. (“TNT 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.

As noted in our Annual Report, beginning in the first quarter of 2018, we began to report TNT Express as part of the FedEx Express segment. Prior year amounts have been revised to conform to the current year presentation. See Note 6 of the accompanying unaudited condensed consolidated financial statements for further discussion.

Our FedEx Services segment provides sales, marketing, information technology, communications, customer service, technical support, billing and collection services and certain back-office support functions that support 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”). 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 and size;

• 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 shipment or hundredweight for LTL freight shipments);

• our ability to manage our network capacity and 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 recover incremental fuel costs 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), insurance, professional fees, uniforms and taxes and licenses.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2018 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, the FedEx Express segment, the FedEx Ground segment and the FedEx Freight segment.

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RESULTS OF OPERATIONS

CONSOLIDATED RESULTS

The following tables compare summary operating results and changes in revenue and operating income (dollars in millions, except per share amounts) for the periods ended November 30:

	Three Months Ended						Percent				Six Months Ended						Percent
	2017			2016			Change				2017			2016			Change
Revenues	$	16,313		$	14,931			9			$	31,610		$	29,594			7
Operating income:
FedEx Express segment		717			706			2				1,150			1,316			(13	)
FedEx Ground segment		521			465			12				1,147			1,075			7
FedEx Freight segment		118			88			34				294			223			32
Eliminations, corporate and other		(94	)		(92	)		(2	)			(212	)		(183	)		(16	)
Consolidated operating income		1,262			1,167			8				2,379			2,431			(2	)
Operating margin:
FedEx Express segment		7.7	%		8.2	%		(50	)	bp		6.4	%		7.7	%		(130	)	bp
FedEx Ground segment		10.6	%		10.5	%		10		bp		12.0	%		12.3	%		(30	)	bp
FedEx Freight segment		6.7	%		5.5	%		120		bp		8.4	%		6.9	%		150		bp
Consolidated operating margin		7.7	%		7.8	%		(10	)	bp		7.5	%		8.2	%		(70	)	bp
Consolidated net income	$	775		$	700			11			$	1,371		$	1,415			(3	)
Diluted earnings per share	$	2.84		$	2.59			10			$	5.03		$	5.24			(4	)

	Change in Revenue						Change in Operating Income
	Three Months Ended			Six Months Ended			Three Months Ended			Six Months Ended
FedEx Express segment	$	712		$	904		$	11		$	(166	)
FedEx Ground segment		510			859			56			72
FedEx Freight segment		165			259			30			71
FedEx Services segment		2			7			—			—
Eliminations, corporate and other		(7	)		(13	)		(2	)		(29	)
	$	1,382		$	2,016		$	95		$	(52	)

Overview

Our results improved in the second quarter of 2018 primarily due to increased yields, volume growth and the favorable net impact of fuel at all of our transportation segments. These factors were partially offset by the continued impact of the NotPetya cyberattack described below. The cyberattack also drove declining results in the first half of 2018, which were partially offset by the same positive factors noted above.

Our results were negatively impacted by the NotPetya cyberattack by an estimated $100 million or $0.31 per diluted share in the second quarter of 2018 and by an estimated $400 million or $1.10 per diluted share in the first half of 2018, primarily from loss of revenue due to decreased shipments in the TNT Express network, as well as incremental costs to restore information technology systems.

As previously announced, on June 27, 2017, the worldwide operations of TNT Express were significantly affected by the cyberattack known as NotPetya. Immediately following the attack, contingency plans were implemented to recover TNT Express operations and communications systems, and substantially all TNT Express services were fully restored during the first quarter of 2018. All of TNT Express’s critical operational systems have now been fully restored, critical business data has been recovered and shipping services and solutions are back in place. However, not all customers are shipping at pre-attack volume levels. For a description of the ongoing impact of the cyberattack, see the discussion under the heading “Outlook” below.

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We also incurred TNT Express integration expenses totaling an aggregate of $122 million ($91 million, net of tax, or $0.33 per diluted share) in the second quarter of 2018, a $64 million increase from the second quarter of 2017. TNT Express integration expenses were an aggregate $234 million ($173 million, net of tax, or $0.64 per diluted share) in the first half of 2018, a $108 million increase from the first half of 2017. The integration expenses are incremental costs directly associated with the integration of TNT Express, including professional and legal fees, salaries and wages, advertising expenses and travel. Internal salaries and wages are included only to the extent the individuals are assigned full time to integration activities. These costs were incurred at FedEx Express and FedEx Corporation. The identification of these costs as integration-related expenditures is subject to our disclosure controls and procedures.

In addition, our results include a tax benefit of approximately $80 million ($0.29 per diluted share) in the second quarter of 2018 attributable to foreign tax credits associated with a dividend paid from our foreign operations.

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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 operations.

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

⁽¹⁾ International domestic revenue per package represents our international intra-country operations.

Revenue

Revenues increased 9% in the second quarter and 7% in the first half of 2018 due to improved performance at all of our transportation segments. Revenues at FedEx Express increased 8% in the second quarter and 5% in the first half of 2018 due to improved base yields, volume growth and favorable exchange rates, which were partially offset by the loss of volume due to the NotPetya cyberattack. At FedEx Ground, revenues increased 12% in the second quarter and 10% in the first half of 2018 due to volume growth and increased yields. FedEx Freight revenues increased 10% in the second quarter and 8% in the first half of 2018 due to higher LTL revenue per shipment and average daily LTL shipments. Higher fuel surcharges had a positive impact on revenues at all of our transportation segments in the second quarter and first half of 2018.

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Operating Expenses

The following tables compare operating expenses expressed as dollar amounts (in millions) and as a percent of revenue for the periods ended November 30:

	Three Months Ended				Six Months Ended
	2017		2016		2017		2016
Operating expenses:
Salaries and employee benefits	$	5,742	$	5,353	$	11,260	$	10,664
Purchased transportation		3,840		3,431		7,285		6,671
Rentals and landing fees		835		802		1,653		1,592
Depreciation and amortization		756		740		1,507		1,479
Fuel		818		658		1,521		1,308
Maintenance and repairs		665		579		1,340		1,177
Other		2,395		2,201		4,665		4,272
Total operating expenses	$	15,051	$	13,764	$	29,231	$	27,163
Operating income	$	1,262	$	1,167	$	2,379	$	2,431

	Percent of Revenue
	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Operating expenses:
Salaries and employee benefits		35.2	%		35.8	%		35.6	%		36.1	%
Purchased transportation		23.6			23.0			23.1			22.5
Rentals and landing fees		5.1			5.4			5.2			5.4
Depreciation and amortization		4.6			5.0			4.8			5.0
Fuel		5.0			4.4			4.8			4.4
Maintenance and repairs		4.1			3.9			4.2			4.0
Other		14.7			14.7			14.8			14.4
Total operating expenses		92.3			92.2			92.5			91.8
Operating margin		7.7	%		7.8	%		7.5	%		8.2	%

Operating margin declined in the second quarter and first half of 2018 primarily as a result of the NotPetya cyberattack discussed above and increased TNT Express integration expenses.

Purchased transportation costs increased 12% in the second quarter and 9% in the first half of 2018 primarily due to higher volumes at all of our transportation segments, higher rates at FedEx Ground and unfavorable exchange rates at FedEx Express. Salaries and employee benefits expense increased 7% in the second quarter and 6% in the first half of 2018 primarily due to volume growth and merit increases at our transportation segments. Other expenses increased 9% in the second quarter and first half of 2018 primarily due to TNT Express integration expenses at FedEx Express and higher self-insurance reserves at FedEx Ground. Maintenance and repairs expense increased 15% in the second quarter and 14% in the first half of 2018 primarily due to the timing of aircraft maintenance events at FedEx Express.

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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 24% in the second quarter and 16% in the first half of 2018 primarily due to increased fuel prices. 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. Accordingly, 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 second quarter of 2018 and 2017 in the accompanying discussions of each of our transportation segments.

Effective February 6, 2017, FedEx Express and FedEx Ground fuel surcharges are adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price from two weeks prior to the week in which it is assessed. The index used to determine the fuel surcharge percentage for our FedEx Freight business continues to adjust weekly. Some FedEx Express international fuel surcharges continue to incorporate a timing lag of approximately six to eight weeks.

Prior to February 6, 2017, our fuel surcharges for the FedEx Express and FedEx Ground businesses incorporated a timing lag of approximately six to eight weeks before they were adjusted for changes in fuel prices. For example, the fuel surcharge index in effect at FedEx Express in January 2017 was set based on November 2016 fuel prices.

Beyond these factors, the manner in which we purchase fuel also influences the net impact of fuel on our results. For example, our contracts for jet fuel purchases at FedEx Express are tied to various indices, including the U.S. Gulf Coast index. While many of these indices are aligned, each index may fluctuate at a different pace, driving variability in the prices paid for jet fuel. Furthermore, under these contractual arrangements, approximately 70% of our jet fuel is purchased based on the index price for the preceding week, with the remainder of our purchases tied to the index price for the preceding month, rather than based on daily spot rates. These contractual provisions mitigate the impact of rapidly changing daily spot rates on our jet fuel purchases.

Because of the factors described above, 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, which can significantly affect our earnings either positively or negatively in the short-term.

The net impact of fuel had a significant benefit to operating income in the second quarter and first half of 2018 as higher fuel surcharges more than offset increased fuel prices.

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.

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Income Taxes

Our effective tax rate was 32.0% for the second quarter and 35.4% for the first half of 2018, compared with 35.1% in the second quarter and 36.3% for the first half of 2017. The 2018 effective tax rate benefited from foreign tax credits associated with a dividend paid from our foreign operations. We recognized approximately $80 million of this benefit in the second quarter and the full-year benefit from this dividend will be considered in our annual effective tax rate for 2018. These benefits were partially offset by the effect of the cyberattack on lower-taxed foreign earnings, changes in uncertain tax positions and tax costs incurred in the first quarter of 2018 in connection with the integration of TNT Express. For a description of pending U.S. tax legislation, see the “Outlook” section below.

We are subject to taxation in the United States and various U.S. state, local and foreign jurisdictions. We are currently under examination by the Internal Revenue Service for the 2014 and 2015 tax years. It is reasonably possible that certain income tax return proceedings will be completed during the next twelve 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 November 30, 2017, there were no material changes to our liabilities for unrecognized tax benefits from May 31, 2017.

Business Acquisition

On October 13, 2017, FedEx acquired Northwest Research, Inc., a leader in inventory research and management, for $50 million in cash from operations. The majority of the purchase price was allocated to property, plant and equipment. The financial results of this acquired business are included in the FedEx Services segment from the date of acquisition and were not material to our results of operations.

Outlook

We expect yield and volume growth at all of our transportation segments to support revenue and earnings growth in the second half of 2018, prior to any mark-to-market benefit plans adjustment. In addition, we are implementing various cost reduction plans at FedEx Ground for the remainder of 2018. We expect ongoing, but diminishing, financial impacts from the cyberattack in the second half of 2018 in the form of lower revenues. However, we are highly focused on improving TNT Express revenues and volumes. Consequences and risks associated with the ongoing impact of the cyberattack that could negatively impact results of operations and financial condition in the future, particularly if our continuing recovery efforts do not proceed as expected, are described in Part II, Item 1A Risk Factors of this Quarterly Report on Form 10-Q. In addition, our third quarter and full-year 2018 results will be negatively affected by our TNT Express integration activities.

Our expectations for earnings growth in 2018 assumes moderate economic growth and continued recovery from the cyberattack.

During the remainder of 2018, we will continue to execute our TNT Express integration plans. The integration process is complex as it spans over 200 countries and involves combining our pickup and delivery operations at a local level, our global and regional air and ground networks, and our extensive operations, customs clearance, sales and back-office information technology systems. The integration is expected to be substantially complete by the end of 2020. We are targeting operating income improvement at the FedEx Express segment of $1.2 billion to $1.5 billion in 2020 from 2017 assuming moderate economic growth, current accounting rules and U.S. tax laws and continued recovery from the NotPetya cyberattack. This target includes TNT Express synergies, as well as base business and other operational improvements across the global FedEx Express network.

We expect the aggregate integration program expense, including restructuring charges at TNT Express, over the four years to be up to $1.4 billion and expect to incur approximately $450 million of these costs during 2018. Our expected integration expenses have increased from our previous estimates of $350 million for 2018 and $800 million in total based on our decision to accelerate the integration process and to increase investments to move TNT Express information technology, operations and commercial infrastructure to FedEx infrastructure due to the recent cyberattack at TNT Express. In addition, we have identified opportunities to improve the capabilities of the integrated business for future profitability, including in periods beyond 2020. Further, a portion of the incremental integration expenses relate to the ongoing establishment of our new international corporate structure which will leverage synergies to maximize our international profitability, ultimately benefiting our effective tax rate. The timing and amount of integration expenses and capital investments in any future period may change as we implement our plans.

As of the date of this filing, Congress has passed and the President is expected to sign the Tax Cuts and Jobs Act of 2017 into law. If enacted, we estimate a tax benefit between $1.2 billion and $1.5 billion for 2018, primarily due to the revaluation of our net deferred tax liabilities as well as a lower tax rate on 2018 earnings.

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Other Outlook Matters. For details on key 2018 capital projects, refer to the “Liquidity Outlook” section of this MD&A.

FedEx Ground previously announced plans to implement the Independent Service Provider (“ISP”) model throughout its entire U.S. pickup and delivery network, including the 29 states that had not yet begun transitioning to the ISP model. The transition to the ISP model in these 29 states is being accomplished on a district-by-district basis and is expected to be completed in the second half of calendar 2020. As of November 30, 2017, 64% of FedEx Ground volume was being delivered by small businesses operating under the ISP model. The costs associated with these transitions will be recognized in the periods incurred and are not expected to be material to any future quarter.

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. We believe the following new accounting guidance is relevant to the readers of our financial statements.

During the first quarter of 2018, we early adopted the Accounting Standards Update issued by the Financial Accounting Standards Board (“FASB”) related to Intra-Entity Transfers of Assets Other Than Inventory. This update requires companies to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs, as opposed to when the assets are ultimately sold to an outside party. This new guidance had a minimal impact on our accounting and financial reporting for the second quarter and first half of 2018.

On May 28, 2014, the FASB and International Accounting Standards Board issued a new accounting standard that will supersede virtually all existing revenue recognition guidance under generally accepted accounting principles in the United States. This standard will be effective for us beginning June 1, 2018 (fiscal 2019). The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided. The new guidance establishes a five-step approach for the recognition of revenue. We are continuing to complete the assessment of the impact this new standard will have on our consolidated financial statements and related disclosures, including ongoing contract reviews. We do not anticipate that the new guidance will have a material impact on our revenue recognition policies, practices or systems.

On February 25, 2016, the FASB issued a new lease accounting standard which requires lessees to put most leases on their balance sheets but recognize the expenses in their income statements in a manner similar to current practice. The new standard states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Expenses related to leases determined to be operating leases will be recognized on a straight-line basis, while those determined to be financing leases will be recognized following a front-loaded expense profile in which interest and amortization are presented separately in the income statement. Based on our lease portfolio, we currently anticipate recognizing a lease liability and related right-of-use asset on the balance sheet in excess of $13 billion with an immaterial impact on our income statement compared to the current lease accounting model. However, the ultimate impact of the standard will depend on the company’s lease portfolio as of the adoption date. We are currently in the process of evaluating our existing lease portfolios, including accumulating all of the necessary information required to properly account for the leases under the new standard. Additionally, we are implementing an enterprise-wide lease management system to assist in the accounting and are evaluating additional changes to our processes and internal controls to ensure we meet the standard’s reporting and disclosure requirements. These changes will be effective for our fiscal year beginning June 1, 2019 (fiscal 2020), with a modified retrospective adoption method to the beginning of 2018.

In March 2017, the FASB issued an Accounting Standards Update that changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. This new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component outside of income from operations. This standard will impact our operating income but will have no impact on our net income or earnings per share. For example, adoption of this guidance would have reduced operating income by $146 million in the second quarter and $292 million in the first half of 2018, and by $112 million in the second quarter and $224 million in the first half of 2017, but would not have impacted our net income in these periods. This new guidance will be effective for our fiscal year beginning June 1, 2018 (fiscal 2019) and will be applied retrospectively.

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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)
	TNT Express (international express transportation, small-package ground delivery and freight transportation)
	FedEx Trade Networks (air and ocean freight forwarding, customs brokerage and cross-border enablement technology and solutions)
FedEx Ground Segment	FedEx Ground (small-package ground delivery)
	FedEx Supply Chain (third-party logistics)
FedEx Freight Segment	FedEx Freight (LTL freight transportation)
	FedEx Custom Critical (time-critical transportation)
FedEx Services Segment	FedEx Services (sales, marketing, information technology, communications, customer service, technical support, billing and collection services and back-office functions)
	FedEx Office (document and business services and package acceptance)

FEDEX SERVICES SEGMENT

The line item “Intercompany charges” on the accompanying unaudited condensed consolidated financial statements of our transportation segments reflects the allocations from the FedEx Services segment to the respective transportation segments. The allocations of net operating costs are based on metrics such as relative revenues or estimated services provided.

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. We believe these allocations approximate the net cost of providing these functions. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our businesses.

ELIMINATIONS, CORPORATE AND OTHER

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.

Corporate and other includes corporate headquarters costs for executive officers and certain legal and financial functions, as well as certain other costs and credits not attributed to our core business. These costs are not allocated to the business segments.

- 36 -

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, deferred or economy services, which provide delivery on a time-definite or day-definite basis. As discussed in our Annual Report, we are reporting TNT Express as part of the FedEx Express segment. Prior year amounts have been revised to conform to the current year presentation. The following tables compare revenues, operating expenses, operating expenses as a percent of revenue, operating income (dollars in millions) and operating margin for the periods ended November 30:

	Three Months Ended						Percent				Six Months Ended						Percent
	2017			2016			Change				2017			2016			Change
Revenues:
Package:
U.S. overnight box	$	1,787		$	1,709			5			$	3,537		$	3,431			3
U.S. overnight envelope		432			422			2				882			865			2
U.S. deferred		922			834			11				1,800			1,644			9
Total U.S. domestic package revenue		3,141			2,965			6				6,219			5,940			5
International priority		1,839			1,762			4				3,580			3,477			3
International economy		815			716			14				1,585			1,409			12
Total international export package revenue		2,654			2,478			7				5,165			4,886			6
International domestic(1)		1,214			1,088			12				2,258			2,103			7
Total package revenue		7,009			6,531			7				13,642			12,929			6
Freight:
U.S.		688			612			12				1,301			1,228			6
International priority		560			476			18				1,030			925			11
International economy		481			419			15				862			828			4
International airfreight		90			93			(3	)			173			186			(7	)
Total freight revenue		1,819			1,600			14				3,366			3,167			6
Other(2)		526			511			3				998			1,006			(1	)
Total revenues		9,354			8,642			8				18,006			17,102			5
Operating expenses:
Salaries and employee benefits		3,321			3,114			7				6,517			6,223			5
Purchased transportation		1,502			1,352			11				2,868			2,677			7
Rentals and landing fees		498			485			3				988			972			2
Depreciation and amortization		412			412			—				829			832			—
Fuel		703			565			24				1,306			1,120			17
Maintenance and repairs		447			379			18				907			772			17
Intercompany charges		505			468			8				993			930			7
Other		1,249			1,161			8				2,448			2,260			8
Total operating expenses		8,637			7,936			9				16,856			15,786			7
Operating income	$	717		$	706			2			$	1,150		$	1,316			(13	)
Operating margin		7.7	%		8.2	%		(50	)	bp		6.4	%		7.7	%		(130	)	bp

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

⁽²⁾ Includes FedEx Trade Networks.

- 37 -

	Percent of Revenue
	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Operating expenses:
Salaries and employee benefits		35.5	%		36.0	%		36.2	%		36.4	%
Purchased transportation		16.1			15.7			15.9			15.7
Rentals and landing fees		5.3			5.6			5.5			5.7
Depreciation and amortization		4.4			4.8			4.6			4.9
Fuel		7.5			6.5			7.3			6.5
Maintenance and repairs		4.8			4.4			5.0			4.5
Intercompany charges		5.4			5.4			5.5			5.4
Other		13.3			13.4			13.6			13.2
Total operating expenses		92.3			91.8			93.6			92.3
Operating margin		7.7	%		8.2	%		6.4	%		7.7	%

The following table compares selected statistics (in thousands, except yield amounts) for the periods ended November 30:

	Three Months Ended				Percent			Six Months Ended				Percent
	2017		2016		Change			2017		2016		Change
Package Statistics(1)
Average daily package volume (ADV):
U.S. overnight box		1,248		1,283		(3	)		1,217		1,269		(4	)
U.S. overnight envelope		547		557		(2	)		552		563		(2	)
U.S. deferred		938		866		8			907		845		7
Total U.S. domestic ADV		2,733		2,706		1			2,676		2,677		—
International priority		544		538		1			523		519		1
International economy		277		259		7			265		248		7
Total international export ADV		821		797		3			788		767		3
International domestic(2)		2,830		2,696		5			2,622		2,500		5
Total ADV		6,384		6,199		3			6,086		5,944		2
Revenue per package (yield):
U.S. overnight box	$	22.73	$	21.15		7		$	22.70	$	21.13		7
U.S. overnight envelope		12.53		12.00		4			12.48		11.98		4
U.S. deferred		15.58		15.30		2			15.51		15.21		2
U.S. domestic composite		18.24		17.39		5			18.15		17.33		5
International priority		53.67		52.06		3			53.47		52.41		2
International economy		46.77		43.80		7			46.86		44.28		6
International export composite		51.34		49.37		4			51.25		49.78		3
International domestic(2)		6.81		6.40		6			6.73		6.57		2
Composite package yield		17.43		16.72		4			17.51		16.99		3
Freight Statistics(1)
Average daily freight pounds:
U.S.		8,475		8,177		4			8,095		8,121		—
International priority		5,706		5,417		5			5,300		5,099		4
International economy		13,231		12,593		5			11,733		11,863		(1	)
International airfreight		2,016		1,959		3			1,895		1,913		(1	)
Total average daily freight pounds		29,428		28,146		5			27,023		26,996		—
Revenue per pound (yield):
U.S.	$	1.29	$	1.19		8		$	1.26	$	1.18		7
International priority		1.56		1.39		12			1.52		1.42		7
International economy		0.58		0.53		9			0.57		0.55		4
International airfreight		0.71		0.76		(7	)		0.71		0.76		(7	)
Composite freight yield		0.98		0.90		9			0.97		0.92		5

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

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

- 38 -

FedEx Express Segment Revenues

FedEx Express segment revenues increased 8% in the second quarter and 5% in the first half of 2018 primarily due to improved base yields and growth in international services, as well as higher fuel surcharges and favorable exchange rates. These factors were partially offset by the NotPetya cyberattack discussed above.

U.S. domestic package yields increased 5% in the second quarter and the first half of 2018 primarily due to higher base rates and fuel surcharges. U.S. domestic average daily volume increased 1% in the second quarter and remained flat in the first half of 2018 driven by our U.S. deferred service, offset by declines in our overnight service offerings. International export package yields increased 4% in the second quarter and 3% in the first half of 2018 due to higher fuel surcharges, favorable exchange rates and favorable service mix, partially offset by lower base rates. International export average daily volumes increased 3% in the second quarter and the first half of 2018 primarily due to increased international economy shipments, partially offset by the decrease in volume due to the NotPetya cyberattack. Freight yields increased 9% in the second quarter and 5% in the first half of 2018 primarily due to higher base rates, higher fuel surcharges and favorable exchange rates. Freight average daily pounds increased 5% in the second quarter of 2018 primarily due to higher international volume, partially offset by the NotPetya cyberattack.

Our U.S. domestic and outbound fuel surcharge and the international fuel surcharges ranged as follows for the periods ended November 30:

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
U.S. Domestic and Outbound Fuel Surcharge:
Low		4.42	%		2.00	%		2.21	%		0.96	%
High		4.87			2.28			4.87			2.53
Weighted-average		4.63			2.09			3.67			1.96
International Fuel Surcharges:
Low		5.65			2.11			3.38			1.16
High		12.16			9.33			13.75			9.51
Weighted-average		10.54			7.20			9.66			7.12

On September 18, 2017, FedEx Express announced a 4.9% average list price increase for U.S. domestic, U.S. export and U.S. import services effective January 1, 2018. Effective February 6, 2017, FedEx Express fuel surcharges are adjusted on a weekly basis compared to the previous monthly adjustment. On January 2, 2017, FedEx Express implemented a 3.9% average list price increase for U.S. domestic, U.S. export and U.S. import services and a change to the U.S. domestic dimensional weight divisor.

FedEx Express Segment Operating Income

FedEx Express operating income increased in the second quarter of 2018 due to higher revenues, the positive net impact of fuel and continued cost efficiencies. However, impacts from the NotPetya cyberattack and higher TNT Express integration expenses drove a decline in operating margin in the second quarter and also drove a decline in operating income and margin in the first half of 2018.

The NotPetya cyberattack negatively affected results by an estimated $100 million in the second quarter and $400 million in the first half of 2018. Results also included $96 million of TNT Express integration expenses in the second quarter and $184 million in the first half of 2018, a $68 million increase from the second quarter and $114 million increase from the first half of 2017.

Salaries and employee benefits increased 7% in the second quarter and 5% in the first half of 2018 primarily due to merit increases, increased volume and unfavorable exchange rates. Purchased transportation increased 11% in the second quarter and 7% in the first half of 2018 due to increased volume and unfavorable exchange rates. Other expenses increased 8% in the second quarter and first half of 2018 due to increased outside service contracts primarily related to the NotPetya cyberattack, TNT Express integration expenses and unfavorable exchange rates. Maintenance and repairs increased 18% in the second quarter and 17% in the first half of 2018 due primarily to the timing of aircraft maintenance events.

Fuel expense increased 24% in the second quarter and 17% in the first half of 2018 due to increased fuel prices. However, the net impact of fuel had a moderate benefit to operating income in the second quarter and first half of 2018 as higher fuel surcharges more than offset increased fuel prices. See the “Fuel” section of this MD&A for a description and additional discussion of the net impact of fuel on our operating results.

- 39 -

FEDEX GROUND SEGMENT

FedEx Ground service offerings include day-certain delivery to businesses in the U.S. and Canada and to 100% of U.S. residences. The following tables compare revenues, operating expenses, operating expenses as a percent of revenue, operating income (dollars in millions), operating margin and selected package statistics (in thousands, except yield amounts) for the periods ended November 30:

	Three Months Ended						Percent			Six Months Ended						Percent
	2017			2016			Change			2017			2016			Change
Revenues:
FedEx Ground	$	4,521		$	4,015			13		$	8,762		$	7,906			11
FedEx Supply Chain		408			404			1			806			803			—
Total revenues		4,929			4,419			12			9,568			8,709			10
Operating expenses:
Salaries and employee benefits		919			820			12			1,755			1,586			11
Purchased transportation		2,100			1,861			13			3,959			3,553			11
Rentals		207			189			10			408			370			10
Depreciation and amortization		177			168			5			350			331			6
Fuel		4			3			33			6			5			20
Maintenance and repairs		85			78			9			167			154			8
Intercompany charges		362			328			10			716			653			10
Other		554			507			9			1,060			982			8
Total operating expenses		4,408			3,954			11			8,421			7,634			10
Operating income	$	521		$	465			12		$	1,147		$	1,075			7
Operating margin		10.6	%		10.5	%		10	bp		12.0	%		12.3	%		(30	)	bp
Average daily package volume
FedEx Ground		8,576			8,005			7			8,125			7,692			6
Revenue per package (yield)
FedEx Ground	$	8.35		$	7.95			5		$	8.41		$	8.02			5

	Percent of Revenue
	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Operating expenses:
Salaries and employee benefits		18.6	%		18.5	%		18.3	%		18.2	%
Purchased transportation		42.6			42.1			41.4			40.8
Rentals		4.2			4.3			4.3			4.2
Depreciation and amortization		3.6			3.8			3.6			3.8
Fuel		0.1			0.1			0.1			0.1
Maintenance and repairs		1.7			1.8			1.7			1.8
Intercompany charges		7.4			7.4			7.5			7.5
Other		11.2			11.5			11.1			11.3
Total operating expenses		89.4			89.5			88.0			87.7
Operating margin		10.6	%		10.5	%		12.0	%		12.3	%

FedEx Ground Segment Revenues

FedEx Ground segment revenues increased 12% in the second quarter and 10% in the first half of 2018 due to volume growth and increased yields. Average daily volume at FedEx Ground increased 7% in the second quarter and 6% in the first half of 2018 due to continued growth in our residential and commercial services. FedEx Ground yield increased 5% during the second quarter and first half of 2018 primarily driven by higher base rates in our commercial services and higher fuel surcharges.

- 40 -

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 ranged as follows for the periods ended November 30:

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Low		4.50	%		3.80	%		4.00	%		3.30	%
High		5.25			4.00			5.25			4.00
Weighted-average		5.02			3.90			4.68			3.80

On September 18, 2017, FedEx Ground announced a 4.9% average list price increase effective January 1, 2018. In addition, as announced on September 18, 2017, dimensional weight pricing will apply to all FedEx SmartPost shipments effective January 22, 2018. Effective February 6, 2017, FedEx Ground fuel surcharges are adjusted on a weekly basis compared to the previous monthly adjustment. On January 2, 2017, FedEx Ground implemented a 4.9% average list price increase and a change to the U.S. domestic dimensional weight divisor. On January 4, 2016, FedEx Ground implemented a 4.9% increase in average list price.

FedEx Ground Segment Operating Income

FedEx Ground segment operating income increased 12% in the second quarter and 7% in the first half of 2018 due to volume growth and increased yields. Higher purchased transportation, network expansion and staffing costs and increased self-insurance reserves partially offset these benefits and also drove the operating margin decline in the first half of 2018.

Purchased transportation expense increased 13% in the second quarter and 11% in the first half of 2018 primarily due to higher volumes and increased rates. Salaries and employee benefits expense increased 12% in the second quarter and 11% in the first half of 2018 primarily due to additional staffing to support volume growth, network expansion and merit increases. Other expense increased 9% in the second quarter and 8% in the first half of 2018 due to higher self-insurance reserves. Intercompany charges increased 10% in the second quarter and first half of 2018 due to higher allocated information technology and marketing and sales costs. Rentals and depreciation and amortization expense increased 8% in the second quarter and first half of 2018 due to network expansion.

Independent Contractor Model

FedEx Ground is involved in lawsuits and administrative proceedings claiming that owner-operators engaged under a contractor model no longer in use should have been treated as employees of FedEx Ground, rather than independent contractors. In addition, we are defending joint-employer cases where it is alleged that FedEx Ground should be treated as an employer of the drivers employed by owner-operators engaged by FedEx Ground. These cases are in varying stages of litigation. We will continue to vigorously defend ourselves in these proceedings and continue to believe that owner-operators engaged by FedEx Ground are properly classified as independent contractors and that FedEx Ground is not an employer of the drivers employed by these owner-operators.

For additional information on the FedEx Ground Independent Service Provider model, see “Other Outlook Matters” under Consolidated Results of this MD&A.

- 41 -

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 tables compare revenues, operating expenses, operating expenses as a percent of revenue, operating income (dollars in millions), operating margin and selected statistics for the periods ended November 30:

	Three Months Ended						Percent			Six Months Ended						Percent
	2017			2016			Change			2017			2016			Change
Revenues	$	1,762		$	1,597			10		$	3,514		$	3,255			8
Operating expenses:
Salaries and employee benefits		828			761			9			1,630			1,533			6
Purchased transportation		271			250			8			529			509			4
Rentals		37			35			6			73			65			12
Depreciation and amortization		73			66			11			142			130			9
Fuel		112			92			22			209			183			14
Maintenance and repairs		60			55			9			117			109			7
Intercompany charges		128			124			3			254			250			2
Other		135			126			7			266			253			5
Total operating expenses		1,644			1,509			9			3,220			3,032			6
Operating income	$	118		$	88			34		$	294		$	223			32
Operating margin		6.7	%		5.5	%		120	bp		8.4	%		6.9	%		150	bp
Average daily LTL shipments (in thousands)
Priority		76.3			72.7			5			75.3			72.6			4
Economy		32.3			31.4			3			32.0			31.9			—
Total average daily LTL shipments		108.6			104.1			4			107.3			104.5			3
Weight per LTL shipment (lbs)
Priority		1,201			1,165			3			1,192			1,171			2
Economy		1,153			1,113			4			1,150			1,105			4
Composite weight per LTL shipment		1,187			1,149			3			1,180			1,151			3
LTL revenue per shipment
Priority	$	232.25		$	220.34			5		$	229.17		$	218.89			5
Economy		286.35			261.28			10			281.64			258.26			9
Composite LTL revenue per shipment	$	248.36		$	232.70			7		$	244.81		$	230.90			6
LTL yield (revenue per hundredweight)
Priority	$	19.34		$	18.92			2		$	19.22		$	18.70			3
Economy		24.84			23.48			6			24.49			23.37			5
Composite LTL yield	$	20.93		$	20.25			3		$	20.75		$	20.07			3

	Percent of Revenue
	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Operating expenses:
Salaries and employee benefits		47.0	%		47.6	%		46.4	%		47.1	%
Purchased transportation		15.4			15.7			15.1			15.6
Rentals		2.1			2.2			2.1			2.0
Depreciation and amortization		4.1			4.1			4.0			4.0
Fuel		6.3			5.8			5.9			5.6
Maintenance and repairs		3.4			3.4			3.3			3.3
Intercompany charges		7.3			7.8			7.2			7.7
Other		7.7			7.9			7.6			7.8
Total operating expenses		93.3			94.5			91.6			93.1
Operating margin		6.7	%		5.5	%		8.4	%		6.9	%

- 42 -

FedEx Freight Segment Revenues

FedEx Freight segment revenues increased 10% in the second quarter and 8% in the first half of 2018 primarily due to higher LTL revenue per shipment and average daily LTL shipments. LTL revenue per shipment increased 7% in the second quarter and 6% in the first half of 2018 primarily due to higher base rates driven by our ongoing yield management initiatives and higher fuel surcharges. Average daily LTL shipments increased 4% in the second quarter and 3% in the first half of 2018 due to higher demand for our LTL service offerings.

The indexed LTL fuel surcharge is based on the average of the national U.S. on-highway average prices for a gallon of diesel fuel, as published by the Department of Energy. The indexed LTL fuel surcharge ranged as follows for the periods ended November 30:

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Low		22.40	%		20.50	%		20.90	%		20.20	%
High		23.20			21.00			23.20			21.00
Weighted-average		22.70			20.75			21.96			20.64

On September 18, 2017, FedEx Freight announced a 4.9% average increase in certain U.S. and other shipping rates effective January 1, 2018. On January 2, 2017, FedEx Freight implemented a 4.9% average increase in certain U.S. and other shipping rates.

FedEx Freight Segment Operating Income

FedEx Freight segment operating income increased 34% in the second quarter and 32% in the first half of 2018 primarily driven by higher LTL revenue per shipment. Salaries and employee benefits increased 9% in the second quarter and 6% in the first half of 2018 driven primarily by higher staffing levels to support volume growth and merit increases. Purchased transportation increased 8% in the second quarter and 4% in the first half of 2018 due to higher volumes and increased rates, which were partially offset by the movement of certain services within FedEx Custom Critical to the FedEx Ground segment.

Fuel expense increased 22% in the second quarter and 14% in the first half of 2018 due to higher fuel prices. The net impact of fuel had a slight benefit to operating income in the second quarter and first half of 2018 as higher fuel surcharges more than offset increased fuel prices.

- 43 -

FINANCIAL CONDITION

LIQUIDITY

Cash and cash equivalents totaled $2.8 billion at November 30, 2017, compared to $4.0 billion at May 31, 2017. The following table provides a summary of our cash flows for the six-month periods ended November 30 (in millions):

	2017			2016
Operating activities:
Net income	$	1,371		$	1,415
Noncash charges and credits		2,053			1,968
Gain from sale of investment		—			(35	)
Changes in assets and liabilities		(1,926	)		(713	)
Cash provided by operating activities		1,498			2,635
Investing activities:
Capital expenditures		(2,621	)		(2,681	)
Business acquisitions, net of cash acquired		(44	)		—
Proceeds from asset dispositions and other		12			100
Cash used in investing activities		(2,653	)		(2,581	)
Financing activities:
Proceeds from short-term borrowings		250			—
Principal payments on debt		(28	)		(43	)
Proceeds from stock issuances		205			164
Dividends paid		(268	)		(213	)
Purchase of treasury stock		(270	)		(334	)
Other		3			(5	)
Cash used in financing activities		(108	)		(431	)
Effect of exchange rate changes on cash		62			(98	)
Net decrease in cash and cash equivalents	$	(1,201	)	$	(475	)
Cash and cash equivalents at the end of period	$	2,768		$	3,059

Cash flows from operating activities decreased $1.1 billion in the first half of 2018 primarily due to the NotPetya cyberattack, higher income tax payments, pension contributions and the payment of a previously accrued legal settlement. Capital expenditures decreased slightly during the first half of 2018 primarily due to lower spending related to package handling and ground support equipment at FedEx Ground and FedEx Express, partially offset by increased facilities and other at FedEx Ground. See “Capital Resources” for a discussion of capital expenditures during 2018 and 2017.

During the second quarter of 2018, we issued $250 million of commercial paper, providing us with additional short-term liquidity flexibility. Upon maturity in January 2018, we will re-evaluate our short-term liquidity needs and assess whether to issue additional commercial paper in order to maintain this short-term liquidity flexibility.

On January 26, 2016, our Board of Directors approved a share repurchase program of up to 25 million shares. During the second quarter of 2018, we repurchased 0.8 million shares of FedEx common stock at an average price of $220.67 per share for a total of $184 million. During the first half of 2018, we repurchased 1.2 million shares of FedEx common stock at an average price of $216.45 per share for a total of $270 million. As of November 30, 2017, 14.8 million shares remained under the share repurchase authorization. Shares under the current repurchase program may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx common stock and general market conditions. No time limit was set for the completion of the program, and the program may be suspended or discontinued at any time.

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, tax laws and actions of regulatory authorities.

- 44 -

The following table compares capital expenditures by asset category and reportable segment for the periods ended November 30 (in millions):

									Percent Change
									2017/2016
	Three Months Ended				Six Months Ended				Three Months			SixMonths
	2017		2016		2017		2016		Ended			Ended
Aircraft and related equipment	$	629	$	443	$	1,040	$	1,035		42			—
Package handling and ground support equipment		217		326		414		524		(33	)		(21	)
Vehicles		390		369		511		518		6			(1	)
Information technology		135		119		261		278		13			(6	)
Facilities and other		206		209		395		326		(1	)		21
Total capital expenditures	$	1,577	$	1,466	$	2,621	$	2,681		8			(2	)
FedEx Express segment	$	873	$	723	$	1,455	$	1,555		21			(6	)
FedEx Ground segment		420		504		747		740		(17	)		1
FedEx Freight segment		172		162		199		208		6			(4	)
FedEx Services segment		112		77		220		178		45			24
Total capital expenditures	$	1,577	$	1,466	$	2,621	$	2,681		8			(2	)

Capital expenditures decreased slightly during the first half of 2018 primarily due to lower spending related to package handling and ground support equipment at FedEx Ground and FedEx Express, partially offset by increased facilities and other at FedEx Ground. Aircraft and related equipment purchases at FedEx Express during the first half of 2018 included the delivery of six Boeing 767-300 Freighter aircraft and three Boeing 777 Freighter aircraft.

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 November 30, 2017 included $1.1 billion of cash in foreign jurisdictions associated with our permanent reinvestment strategy. We do not believe that the indefinite reinvestment of these funds impairs our ability to meet our domestic debt or working capital obligations. Although we expect higher capital expenditures in 2018, 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 $5.9 billion in 2018 and include spending for aircraft and aircraft-related equipment at FedEx Express, sort facility expansion, primarily at FedEx Ground, and new and replacement vehicles at all of our transportation segments. We expect to invest an additional $1.2 billion for aircraft and aircraft-related equipment during the remainder of 2018. However, we may increase our capital expenditures in 2018 if the Tax Cuts and Jobs Act of 2017 is enacted.

During the second quarter of 2018, FedEx Express entered into an agreement to purchase 50 Cessna SkyCourier 408 aircraft with options to purchase up to 50 additional Cessna SkyCourier 408 aircraft. The 50 firm-order Cessna SkyCourier 408 aircraft are expected to be delivered from fiscal 2021 through 2024.

During the second quarter of 2018, FedEx Express entered into an agreement to purchase 30 ATR 72-600F aircraft with options to purchase up to 20 additional ATR 72-600F aircraft. The 30 firm-order ATR 72-600F aircraft are expected to be delivered from fiscal 2021 through 2026.

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.

We have a five-year $1.75 billion revolving credit facility that expires in November 2020. See Note 3 of the accompanying unaudited condensed consolidated financial statements for a description of the term and significant covenants of our revolving credit facility.

During the first half of 2018, we made contributions totaling $750 million to our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”), of which $268 million were required. We expect to make an additional $250 million contribution to our U.S. Pension Plans during 2018. Our U.S. Pension Plans have ample funds to meet expected benefit payments.

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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 our unsecured debt a credit rating of Baa2 and our commercial paper a 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 November 30, 2017. 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 November 30, 2017. 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)
	2018 (1)		2019		2020		2021		2022		Thereafter		Total
Operating activities:
Operating leases	$	1,448	$	2,357	$	2,060	$	1,826	$	1,649	$	8,921	$	18,261
Non-capital purchase obligations and other		426		677		524		385		234		492		2,738
Interest on long-term debt		291		546		484		472		472		8,719		10,984
Quarterly contributions to our U.S. Pension    Plans		15		—		—		—		—		—		15
Investing activities:
Aircraft and aircraft-related capital    commitments		870		1,723		1,965		1,488		1,451		3,334		10,831
Other capital purchase obligations		66		2		1		1		1		7		78
Financing activities:
Debt		3		1,350		997		—		—		12,928		15,278
Total	$	3,119	$	6,655	$	6,031	$	4,172	$	3,807	$	34,401	$	58,185

⁽¹⁾ Cash obligations for the remainder of 2018.

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 November 30, 2017.

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 ($38 million) for uncertain tax positions and amounts for purchase obligations that represent noncancelable 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 ($39 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.

We had $684 million in deposits and progress payments as of November 30, 2017 on aircraft purchases and other planned aircraft-related transactions.

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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 principal payments on our long-term debt.

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 other change of events or circumstances that would indicate that a reevaluation of the goodwill of our reporting units is required as of November 30, 2017, 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.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including (but not limited to) those contained in “Income Taxes,” “Outlook,” “Recent Accounting Guidance,” “Liquidity,” “Liquidity Outlook,” “Contractual Cash Obligations and Off-Balance Sheet Arrangements” and “Critical Accounting Estimates,” and the “General,” “Retirement Plans,” “Commitments” 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,” “will,” “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;

• a significant data breach or other disruption to our technology infrastructure, which can adversely affect our reputation, business or results of operations;

• the ongoing impact of the significant cyberattack that TNT Express experienced in the first quarter of fiscal 2018;

• our ability to successfully integrate the businesses and operations of FedEx Express and TNT Express in the expected time frame or at the expected cost;

• damage to our reputation or loss of brand equity;

• the price and availability of jet and vehicle fuel;

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• our ability to manage our network capacity and 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 prices) 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 achieve the FedEx Express profit improvement goal;

• our ability to maintain good relationships with our employees and avoid 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 owner-operators engaged by FedEx Ground as independent contractors and direct employers of drivers providing services on their behalf, and (ii) any related changes to our relationship with these owner-operators and their drivers;

• the impact of the United Kingdom’s vote to leave the European Union;

• any impact on our business from disruptions or modifications in service by, or changes in the business or financial soundness of, the U.S. Postal Service, which is a significant customer and vendor of FedEx;

• the impact of any international conflicts or terrorist activities 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 evolving or new domestic or international government laws and regulation, which could be unfavorable to our business, 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 or restrictions on free trade), labor (such as card-check legislation, joint employment standards or changes to the Railway Labor Act of 1926, as amended, affecting FedEx Express employees), environmental (such as global climate change legislation) or postal rules;

• 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;

• 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 euro, Chinese yuan, British pound, Brazilian real, Canadian dollar and Mexican peso, 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, joint employment, 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 agreement is scheduled to become amendable in November 2021) and with the union elected in 2015 to represent drivers at a FedEx Freight facility;

• 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.

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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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of November 30, 2017, 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 euro, Chinese yuan, British pound, Brazilian real, Canadian dollar and Mexican peso. 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 half of 2018, the U.S. dollar strengthened relative to the currencies of the foreign countries in which we operate, as compared to May 31, 2017, and this strengthening had a slightly negative impact 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 November 30, 2017 (the end of the period covered by this Quarterly Report on Form 10-Q).

During our fiscal quarter ended November 30, 2017, 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.

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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

Other than the risk factor set forth below, 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.

TNT Express experienced a significant cyberattack in the first quarter of fiscal 2018 and the ongoing impact could negatively affect our results of operations and financial condition in the future, particularly if our continuing recovery efforts do not proceed as expected.

On June 28, 2017, we announced that the worldwide operations of TNT Express were significantly affected by the cyberattack known as NotPetya, which involved the spread of an information technology virus that infiltrated TNT Express systems and encrypted its data. While TNT Express’s critical operational systems have been fully restored, critical business data has been recovered and shipping services and solutions are back in place, not all customers are shipping at pre-attack volume levels and we are continuing to engage in related recovery efforts. Our results of operations and financial condition could be negatively impacted in the future if our recovery efforts do not proceed as expected, particularly if lost revenues or incremental costs associated with the cyberattack exceed our expectations. The following consequences or potential consequences of the cyberattack could have an adverse impact on our results of operations and financial condition in the future:

• loss of revenue due to permanent customer loss;

• additional costs due to claims for service failures;

• higher effective tax rate due to reduced international earnings;

• longer and more costly integration (due to increased expenses and capital spending requirements) of TNT Express and FedEx Express;

• investments in enhanced systems in order to prevent future attacks;

• cost of incentives offered to customers to restore confidence and maintain business relationships;

• reputational damage resulting in the failure to retain or attract customers;

• costs associated with potential litigation or governmental investigations;

• costs associated with any data breach or data loss to third parties that is discovered; and

• other consequences of which we are not currently aware but may subsequently discover.

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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 second quarter of 2018:

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 Program		Maximum Number of Shares That May Yet Be Purchased Under the Program
Sep. 1-30, 2017		195,000	$	216.32		195,000		15,412,500
Oct. 1-31, 2017		330,000		223.80		330,000		15,082,500
Nov. 1-30, 2017		307,500		220.08		307,500		14,775,000
Total		832,500	$	220.67		832,500

The repurchases were made under the stock repurchase program approved by our Board of Directors and announced on January 26, 2016 and through which we are authorized to purchase, in the open market or in privately negotiated transactions, up to an aggregate of 25 million shares of our common stock. As of December 19, 2017, 14.6 million shares remained authorized for purchase under the January 2016 stock repurchase program, which is the only such program that currently exists. The program does not have an expiration date.

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Item 6. Exhibits

Exhibit Number	Description of Exhibit
10.1	Amendment dated October 16, 2017 (but effective as of May 1, 2017), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation (the “USPS Transportation Agreement”).  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 (the “Exchange Act”).
10.2	Amendment dated October 16, 2017 (but effective as of June 5, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.3	Amendment dated October 16, 2017 (but effective as of July 3, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.4	Amendment dated October 16, 2017 (but effective as of August 28, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.5	Amendment dated October 16, 2017 (but effective as of July 31, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.6	Amendment dated October 16, 2017 (but effective as of August 28, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.7	Amendment dated October 16, 2017 (but effective as of January 2, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.8	Amendment dated November 7, 2017 (but effective as of October 2, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.9	Amendment dated November 7, 2017 (but effective as of October 2, 2017), amending the USPS Transportation Agreement.
10.10	Amendment dated November 7, 2017 (but effective as of October 30, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.11	Supplemental Agreement No. 27 (and related side letter) dated as of October 12, 2017, amending the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006, between The Boeing Company and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.12	FedEx Corporation 2010 Omnibus Stock Incentive Plan, 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.

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SIGNATURE

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

	FEDEX CORPORATION
Date: December 20, 2017	/s/ JOHN L. MERINO
	JOHN L. MERINO
	CORPORATE VICE PRESIDENT AND
	PRINCIPAL ACCOUNTING OFFICER

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EXHIBIT INDEX

Exhibit Number	Description of Exhibit
10.1	Amendment dated October 16, 2017 (but effective as of May 1, 2017), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation (the “USPS Transportation Agreement”).  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 (the “Exchange Act”).
10.2	Amendment dated October 16, 2017 (but effective as of June 5, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.3	Amendment dated October 16, 2017 (but effective as of July 3, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.4	Amendment dated October 16, 2017 (but effective as of August 28, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.5	Amendment dated October 16, 2017 (but effective as of July 31, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.6	Amendment dated October 16, 2017 (but effective as of August 28, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.7	Amendment dated October 16, 2017 (but effective as of January 2, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.8	Amendment dated November 7, 2017 (but effective as of October 2, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.9	Amendment dated November 7, 2017 (but effective as of October 2, 2017), amending the USPS Transportation Agreement.
10.10	Amendment dated November 7, 2017 (but effective as of October 30, 2017), amending the USPS Transportation Agreement.  Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.11	Supplemental Agreement No. 27 (and related side letter) dated as of October 12, 2017, amending the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006, between The Boeing Company and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.12	FedEx Corporation 2010 Omnibus Stock Incentive Plan, 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. 101	3. EFFECTIVE DATE   05/01/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223		Cargo Air Acquisitions 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)		(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE		04/23/2013
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 ACKNOWLEDGEMENT 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 Increase:      [*]

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.
☐
☐	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. Mutual Agreement of the Contracting Parties

E. IMPORTANT: Contractor      ☐    is not,      ☒    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.)

The purpose of this modification is to incorporate Operating Period 44 (May) Scheduled and Ad Hoc Charters into the ACN-13-FX contract, with the following conditions:

A) Once the Charters are scheduled they cannot be canceled.

B) All Service and Scan penalties (reductions in payment), related to the Day Network only, will be eliminated. This relief does not apply to the Night Network.

C) Volume will be inducted into the network at the Memphis Hub and will incur appropriate tier pricing and will be processed normally.

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) Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/ RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   10-10-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 10/16/17

* 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   2     OF       2

CONTRACT/ORDER NO.   ACN-13-FX/101 AWARD/ EFFECTIVE DATE     05/01/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO. SOLICITATION         ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	FedEx will notify the Postal Service if the tender requirement is different than what is currently in the contract. Delivery does not change. Payments for said charters will be paid as part of the Operating Period reconciliation. Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Delivery: 08/29/2016 Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 09/29/2024 Change Item 7 to read as follows:
7	Scheduled Charter Option Account Number: 53703 This value is for estimation purposes only. Change Item 9 to read as follows:				[*]
9	Ad Hoc Charter Option Account Number: 53703 This value is for estimation purposes only.				[*]

* 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.

May 17 Operating Period

Charter Request and Accounting

Memorial Day Monday May 29, 2017                            

Week 1

Origin

Operating Day

Cubic Feet  Requested

Tue (05/02)

Wed (05/03)

Thu (05/04)

Fri (05/05)

Sat (05/06)

Sun (05/07)

Weekly Total

A/C Type     Equivalent

Rate

Scheduled  Charters

Adhoc Charters

Total Charters

PHL/stage

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

LAX

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

OAK

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

OAK

THU

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SLC

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

LAX

SAT

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 1 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 2

Origin

Operating Day

Cubic Feet Requested

Tue (05/09)

Wed (05/10)

Thu (05/11)

Fri (05/12)

Sat (05/13)

Sun (05/14)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Adhoc Charters

Total Charters

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

LAX

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

PHL

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

PIT

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SLC

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

PHX

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 2 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3

Origin

Operating Day

Cubic Feet Requested

Tue (05/16)

Wed (05/17)

Thu (05/18)

Fri (05/19)

Sat (05/20)

Sun (05/21)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Adhoc Charters

Total Charters

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 4

Origin

Operating Day

Cubic Feet Requested

Tue (05/23)

Wed (05/24)

Thu (05/25)

Fri (05/26)

Sat (05/27)

Sun (05/28)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Adhoc Charters

Total Charters

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 4 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 5- Memorial Day Monday 05/29/17

Origin

Operating Day

Cubic Feet Requested

Tue (05/30)

Wed (05/31)

Thu (06/01)

Fri (06/02)

Sat (06/03)

Sun (06/04)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Adhoc Charters

Total Charters

LAX

WED

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

N/A

[*]

LAX

THUR

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

LAX

SAT

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

LAX

WED

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

WED

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR

WED

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

PHL

WED

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 5 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MAY Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Grand Total

[*]

*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. 102	3. EFFECTIVE DATE   06/05/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223		Cargo Air Acquisitions 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)		(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE		04/23/2013
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 ACKNOWLEDGEMENT 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 Increase:      [*]

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.
☐
☐	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. Mutual Agreement of the Contracting Parties

E. IMPORTANT: Contractor      ☐    is not,      ☒    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.)

The purpose of this modification is to incorporate Operating Period 45 (June) Scheduled and Ad Hoc Charters into the ACN-13-FX contract, with the following conditions:

A) Once the Charters are scheduled they cannot be canceled.

B) All Service and Scan penalties (reductions in payment), related to the Day Network only, will be eliminated. This relief does not apply to the Night Network.

C) Volume will be inducted into the network at the Memphis Hub and will incur appropriate tier pricing and will be processed normally.

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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/  RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   10-10-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 10/16/17

* 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   2     OF       2

CONTRACT/ORDER NO.   ACN-13-FX/102 AWARD/ EFFECTIVE DATE     06/05/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO.                 SOLICITATION            ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES / SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	FedEx will notify the Postal Service if the tender requirement is different than what is currently in the contract. Delivery does not change. Payments for said charters will be paid as part of the Operating Period reconciliation. - Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Delivery: 08/29/2016 Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 09/29/2024 Change Item 7 to read as follows:
7	Scheduled Charter Option Account Number: 53703 This value is for estimation purposes only. Change Item 9 to read as follows:				[*]
9	Ad Hoc Charter Option Account Number: 53703 This value is for estimation purposes only.				[*]

* 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.

June 17 Operating Period

Charter Request and Accounting

Week 1

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet   Requested

6/6/2017

6/7/2017

6/8/2017

6/9/2017

6/10/2017

6/11/2017

Weekly Total

A/C Type   Equivalent

Rate

Scheduled   Charters

Adhoc Charters

Total Charters

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

N/A

[*]

SLC

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 1 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 2

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet  Requested

6/13/2017

6/14/2017

6/15/2017

6/16/2017

6/17/2017

6/18/2017

Weekly Total

A/C Type   Equivalent

Rate

Scheduled   Charters

Adhoc Charters

Total Charters

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 2 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet  Requested

6/20/2017

6/21/2017

6/22/2017

6/23/2017

6/24/2017

6/25/2017

Weekly Total

A/C Type   Equivalent

Rate

Scheduled   Charters

Adhoc Charters

Total Charters

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 4

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet Requested

6/27/2017

6/28/2017

6/29/2017

6/30/2017

7/1/2017

7/2/2017

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Adhoc Charters

Total Charters

0

$-

0

$-

0

$-

0

$-

0

$-

0

$-

0

0

0

0

0

0

0

$-

$-

Week 4 Total

0

0

0

0

0

0

0

JUN O/P TOTAL

[*]

[*]

[*]

[*]

*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-10.3

Exhibit 10.3

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT			1. CONTRACT ID CODE	PAGE	OF
				1	2
2. AMENDMENT/MODIFICATION NO. 103		3. EFFECTIVE DATE   07/03/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY	CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223			Cargo Air Acquisitions 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)				(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800					9B. DATED (SEE ITEM 11)
				x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
					10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE				04/23/2013
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 ACKNOWLEDGEMENT 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 Increase:      [*]

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.
☐
☐	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. Mutual Agreement of the Contracting Parties

E. IMPORTANT: Contractor      ☐    is not,      ☒    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.)

The purpose of this modification is to incorporate Operating Period 46 (July) Scheduled and Ad Hoc Charters into the ACN-13-FX contract, with the following conditions:

A) Once the Charters are scheduled they cannot be canceled.

B) All Service and Scan penalties (reductions in payment), related to the Day Network only, will be eliminated. This relief does not apply to the Night Network.

C) Volume will be inducted into the network at the Memphis Hub and will incur appropriate tier pricing and will be processed normally.

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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/ RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   10-10-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 10/16/17

* 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   2     OF       2

CONTRACT/ORDER NO.   ACN-13-FX/103 AWARD/ EFFECTIVE DATE     07/03/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO.                 SOLICITATION            ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	FedEx will notify the Postal Service if the tender requirement is different than what is currently in the contract. Delivery does not change. Payments for said charters will be paid as part of the Operating Period reconciliation. - Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Delivery: 08/29/2016 Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 09/29/2024 Change Item 7 to read as follows:
7	Scheduled Charter Option Account Number: 53703 This value is for estimation purposes only. Change Item 9 to read as follows:				[*]
9	Ad Hoc Charter Option Account Number: 53703 This value is for estimation purposes only.				[*]

* 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.

July 17 Operating Period

Charter Request and Accounting

Week 1

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet   Requested

7/4/2017

7/5/2017

7/6/2017

7/7/2017

7/8/2017

7/9/2017

Weekly Total

A/C Type     Equivalent

Rate

Scheduled   Charters

Adhoc Charters

Total Charters

LAX

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

LAX

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

OAK

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

SMF (w/ Stage)

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

PHL

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

SLC

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

PHX

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

SEA

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

IAD

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

OAK

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

LAX

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

PHX

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SEA

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

OAK

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 2

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet Requested

7/11/2017

7/12/2017

7/13/2017

7/14/2017

7/15/2017

7/16/2017

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Adhoc Charters

Total Charters

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

EWR

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet Requested

7/18/2017

7/19/2017

7/20/2017

7/21/2017

7/22/2017

7/23/2017

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Adhoc Charters

Total Charters

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR (stage)

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 4

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet Requested

7/25/2017

7/26/2017

7/27/2017

7/28/2017

7/29/2017

7/30/2017

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Adhoc Charters

Total Charters

LAX

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR (stage)

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

JUL  O/P TOTAL

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

*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-10.4

Exhibit 10.4

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT	1. CONTRACT ID CODE	PAGE	OF
		1	3

2. AMENDMENT/MODIFICATION NO. 104	3. EFFECTIVE DATE   08/28/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223		Cargo Air Acquisitions 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)		(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE		04/23/2013
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 ACKNOWLEDGEMENT 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 Increase:      [*]

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
☐	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,      ☒    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.)

The purpose of this modification is to execute the following change to the ACN-13-FX contract:

1. 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 August 28, 2017 to October 1, 2017 (Operating Period 48) as follows:

TIERS: Base - Tier 5

From:

[*] 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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/  RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   10-10-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 10/16/17

* 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   2     Of       3

CONTRACT/ORDER NO.   ACN-13-FX/104 AWARD/ EFFECTIVE DATE     08/28/2017 MASTER/AGENCY CONTRACT NO     SOLICITATION NO.                 SOLICITATION            ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	To: [*] per cubic foot This is an increase of [*]. TIERS: 6 – 8 TIER 6: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. TIER 7: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. TIER 8: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. [*] — Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Delivery: 11/28/2016 Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 09/29/2024 Change Item 1 to read as follows:
1	Day Network Account Number: 53503 Continued…				[*]

* 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   3     OF       3

CONTRACT/ORDER NO.   ACN-13-FX/104 AWARD/ EFFECTIVE DATE     08/28/2017 MASTER/AGENCY CONTRACT NO     SOLICITATION NO.                 SOLICITATION            ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	This is for estimation purposes only and is not a guarantee of contract value.

EX-10.5

Exhibit 10.5

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

2. AMENDMENT/MODIFICATION NO. 105	3. EFFECTIVE DATE   07/31/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223		Cargo Air Acquisitions 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)		(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE		04/23/2013
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 ACKNOWLEDGEMENT 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 Increase:      [*]

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.
☐
☐	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. Mutual Agreement of the Contracting Parties

E. IMPORTANT: Contractor      ☐    is not,      ☒    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.)

The purpose of this modification is to incorporate Operating Period 47 (August) Ad Hoc

Charters into the ACN-13-FX contract, with the following conditions:

A) Once the Charters are scheduled they cannot be canceled.

B) All Service and Scan penalties (reductions in payment), related to the Day Network only, will be eliminated. This relief does not apply to the Night Network.

C) Volume will be inducted into the network at the Memphis Hub and will incur appropriate tier pricing and will be processed normally.

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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/ RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   10-10-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 10/16/17

* 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   2     OF       2

CONTRACT/ORDER NO.   ACN-13-FX/105 AWARD/ EFFECTIVE DATE     07/31/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO.                 SOLICITATION            ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	FedEx will notify the Postal Service if the tender requirement is different than what is currently in the contract. Delivery does not change. Payments for said charters will be paid as part of the Operating Period reconciliation. — Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Delivery: 08/29/2016 Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 09/29/2024 Change Item 9 to read as follows:
9	Ad Hoc Charter Option Account Number: 53703 This value is for estimation purposes only.				[*]

* 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.

August 17 Operating Period

Charter Request and Accounting

Week 1

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet   Requested

7/4/2017

8/1/2017

8/2/2017

8/3/2017

8/4/2017

8/5/2017

Weekly Total

A/C Type     Equivalent

Rate

Adhoc Charters

Total Charters

0

0

0

0

0

0

0

$  —

$  —

Week 2

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet Requested

8/8/2017

8/9/2017

8/10/2017

8/11/2017

8/12/2017

8/13/2017

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

EWR

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet Requested

8/15/2017

8/16/2017

8/17/2017

8/18/2017

8/19/2017

8/20/2017

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

OAK

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 4

Tue

Wed

Thu

Fri

Sat

Sun

Origin

Operating Day

Cubic Feet Requested

8/22/2017

8/23/2017

8/24/2017

8/25/2017

8/26/2017

8/27/2017

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

EWR

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

OAK

TUE

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

AUG O/P TOTAL

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

*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-10.6

Exhibit 10.6

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT			1. CONTRACT ID CODE	PAGE	OF
				1	2
2. AMENDMENT/MODIFICATION NO. 106		3. EFFECTIVE DATE   08/28/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                  CODE		5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223			Cargo Air Acquisitions 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)				(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800					9B. DATED (SEE ITEM 11)
				x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
					10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE				04/23/2013
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 ACKNOWLEDGEMENT 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 Increase:            [*]

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.
☐
☐	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. Mutual Agreement of the Contracting Parties

E. IMPORTANT: Contractor      ☐    is not,      ☒    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.)

The purpose of this modification is to incorporate Operating Period 48 (September)

Scheduled Charters into the ACN-13-FX contract, with the following conditions:

A) Once the Charters are scheduled they cannot be canceled.

B) All Service and Scan penalties (reductions in payment), related to the Day Network only, will be eliminated. This relief does not apply to the Night Network.

C) Volume will be inducted into the network at the Memphis Hub and will incur appropriate tier pricing and will be processed normally.

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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/ RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   10-10-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 10/16/17

* 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   2     OF       2

CONTRACT/ORDER NO.   ACN-13-FX/106 AWARD/ EFFECTIVE DATE     08/28/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO.                 SOLICITATION            ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	FedEx will notify the Postal Service if the tender requirement is different than what is currently in the contract. Delivery does not change. Payments for said charters will be paid as part of the Operating Period reconciliation. — Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Delivery: 08/29/2016 Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 09/29/2024 Change Item 7 to read as follows:
7	Scheduled Charter Option Account Number: 53703 This value is for estimation purposes only.				[*]

* 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.

September 17 Operating Period

Scheduled Charters

Week 1

Origin

Operating Day

Cubic Feet Requested

Tue (08/29)

Wed (08/30)

Thu (08/31)

Fri (09/01)

Sat (09/02)

Sun (09/03)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Week 2

Origin

Operating Day

Cubic Feet Requested

Mon (09/04)

Tue (09/05)

Wed (09/06)

Thu (09/07)

Fri (09/08)

Sat (09/09)

Sun (09/10)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

LAX

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

Week 2 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3

Origin

Operating Day

Cubic Feet Requested

Mon (09/11)

Tue (09/12)

Wed (09/13)

Thu (09/14)

Fri (09/15)

Sat (09/16)

Sun (09/17)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

0

0

0

0

0

0

0

0

Week 4

Origin

Operating Day

Cubic Feet Requested

Mon (09/18)

Tue (09/19)

Wed (09/20)

Thu (09/21)

Fri (09/22)

Sat (09/23)

Sun (09/24)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

Week 5

Origin

Operating Day

Cubic Feet Requested

Mon (09/25)

Tue (09/26)

Wed (09/27)

Thu (09/28)

Fri (09/29)

Sat (09/30)

Sun (10/01)

Weekly Total

A/C Type Equivalent

Rate

Scheduled Charters

September Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

* 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-10.7

Exhibit 10.7

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

2. AMENDMENT/MODIFICATION NO. 107	3. EFFECTIVE DATE   01/02/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223		Cargo Air Acquisitions 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)		(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE		04/23/2013
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 ACKNOWLEDGEMENT 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                         $0.00

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.
☐
☒	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. Mutual Agreement of the Contracting Parties

E. IMPORTANT: Contractor      ☐    is not,      ☒    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.)

The purpose of this administrative modification is to incorporate the following:

The Postal Service will pay FedEx [*] to satisfy the 2016 Calendar Year Peak Operating Period Minimum for the Day Network.

The Parties mutually agree that this payment is a complete accord and satisfaction of any and all claims or demands relating to the 2016 Calendar Year Peak Operating Period Minimum for the Day Network, whether asserted or not. The Parties mutually release and discharge each other from any and all claims, lawsuits, causes of action, damages, or liability whatsoever arising from or relating in any way to the 2016 Calendar Year Peak Operating Period Minimum for the Day Network. The Postal Service’s agreement to pay FedEx herein

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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/ RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   10-10-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 10/16/17

* 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   2     OF       2

CONTRACT/ORDER NO.   ACN-13-FX/107 AWARD/ EFFECTIVE DATE     01/02/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO.                 SOLICITATION            ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	shall not be construed as a waiver or modification of any right or obligation of the Parties under the contract, or as consent to any subsequent waiver or modification. All other terms and conditions remain the same. — 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 09/29/2024

EX-10.8

Exhibit 10.8

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT	1. CONTRACT ID CODE	PAGE	OF
		1	3

2. AMENDMENT/MODIFICATION NO. 108	3. EFFECTIVE DATE   10/02/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223		Cargo Air Acquisitions 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)		(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE		04/23/2013
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 ACKNOWLEDGEMENT 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 Increase:      [*]

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
☐	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,      ☒    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.)

The purpose of this modification is to execute the following change to the ACN-13-FX

contract:

1. 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 October 2, 2017 to October 29, 2017 (Operating Period 49) as follows:

TIERS: Base - Tier 5

From:

[*] 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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/  RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   11-1-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 11/7/17

* 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   2     OF       3

CONTRACT/ORDER NO.   ACN-13-FX/108 AWARD/ EFFECTIVE DATE     10/02/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO. SOLICITATION         ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	To: [*] per cubic foot This is an increase of [*]. TIERS: 6 – 8 TIER 6: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. TIER 7: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. TIER 8: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. [*] – Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Delivery: 11/28/2016 Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 09/29/2024 Change Item 1 to read as follows:
1	Day Network Account Number: 53503 Continued…				[*]

* 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   3     OF       3

CONTRACT/ORDER NO.   ACN-13-FX/108 AWARD/ EFFECTIVE DATE     10/02/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO.                 SOLICITATION            ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	This is for estimation purposes only and is not a guarantee of contract value.

EX-10.9

Exhibit 10.9

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

2. AMENDMENT/MODIFICATION NO. 109	3. EFFECTIVE DATE     10/02/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)        CODE		5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223		Cargo Air Acquisitions 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)		(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE		04/23/2013
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 ACKNOWLEDGEMENT 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                   $0.00

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.
☐
☒	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. Mutual Agreement of the Contracting Parties

E. IMPORTANT: Contractor      ☐    is not,      ☒    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.)

The purpose of this administrative modification is to incorporate the following change to

Attachment-8 of the ACN-13-FX contract:

Update Attachment-8 effective October 2, 2017 to include a list of U.S. Postal Inspection

Service contacts (Attachment-8A) and a list of FedEx security contacts (Attachment-8B).

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 09/29/2024

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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR     /s/     RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   11-1-17	16B. CONTRACT AUTHORITY     /s/    BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 11/7/17

Attachment A (to Attachment 8)

Postal Contact Listing for Inspectors

October 2, 2017

DIVISIONS and DISTRICTS	CONTACT
BOSTON	Jay Bunaskavich
Albany District
Western District of New York
Greater Boston District
Connecticut Valley District
Northern New England
CHARLOTTE	Margaret Greene
Greensboro District
Greater S. Carolina District
Mid-Carolina District
Atlanta District
Tennessee District
CHICAGO	Derrick Jones
Chicago District
Gateway District
Central IL District
Lakeland District
Northern IL District
DENVER	Pam Durkee
Hawkeye District
Mid-America District
Northland District
Dakotas District
Central Plains District
Colorado/Wyoming District

DETROIT	Felicia George
Greater Michigan District
Southeast Michigan District
Detroit District
INDIANAPOLIS	Kenny Miller
Greater Indiana District
FORT WORTH	Tyrone Cox
Arkansas District
Dallas District
Fort Worth District
Oklahoma District
HOUSTON	Stephanie Houston
Houston District
Alabama District
Mississippi District
Louisiana District
Rio Grande District
LOS ANGELES	Rebecca Knowles
Los Angeles District
Sierra Coastal District
Santa Ana District
San Diego District
MIAMI	Jeffrey M. Esser
Suncoast District
North Florida District
Central Florida District
South Florida District
NEW YORK	Gary Artinger
Triboro District
Westchester District
New York District
Long Island District
NEWARK	Paul Loney
Northern New Jersey District
Central New Jersey District
Caribbean District

PHILADELPHIA	Juanita Waters
Central PA District
Philadelphia Metro District
South Jersey District
PHOENIX	John Curran
Arizona District
Albuquerque District
Nevada-Sierra District
Salt Lake District
PITTSBURGH	Tammy Mayle
Erie District
Pittsburgh District
Cleveland District
Appalachian District
Columbus District
Cincinnati District
Kentuckiana District
SAN FRANCISCO	Nestor Masangcay
Honolulu District
Sacramento District
San Francisco District
Bay Valley District
SEATTLE	Dave Schroader
Portland District
Seattle District
Spokane District
Big Sky District
Alaska District
WASHINGTON	Lamont Green
Baltimore District
Richmond District
Capital District
Northern Virginia District

Attachment B (to Attachment 8)

ACN Contact Listing for Postal Service Inspectors

October 2, 2017

Jerome Hudson

Senior Security Specialist

Email:

Phone:

James Spivey

Manager Corporate Security

Email:

Phone:

Sean Driver

Senior Manager Corporate Security

Email:

Phone:

Lynn Attkisson

Senior Security Specialist

Email:

Phone:

EX-10.10

Exhibit 10.10

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT	1. CONTRACT ID CODE	PAGE	OF
		1	3

2. AMENDMENT/MODIFICATION NO. 110	3. EFFECTIVE DATE   10/30/2017	4. REQUISITION/PURCHASE REQ. NO.	5. PROJECT NO. (If applicable)
6. ISSUED BY                                                CODE	5ACAAQ	7. ADMINISTERED BY (IF OTHER THAN ITEM 6)	CODE	5ACAAQ
DALE D. PARSAN Cargo Air Acquisitions Air Transportation CMC United States Postal Service 475 L’Enfant Plaza SW, Room 1P650 Washington DC 20260-0650 (202) 268-2223		Cargo Air Acquisitions 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)		(x)	9A. AMENDMENT OF SOLICITATION NO.
FEDERAL EXPRESS CORPORATION
3610 HACKS CROSS ROAD MEMPHIS TN 38125-8800			9B. DATED (SEE ITEM 11)
		x	10A. MODIFICATION OF CONTRACT/ORDER NO. ACN-13-FX
			10B. DATED (SEE ITEM 13)
SUPPLIER CODE:      000389122	FACILITY CODE		04/23/2013
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 ACKNOWLEDGEMENT 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 Increase:      [*]

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
☐	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,      ☒    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.)

The purpose of this modification is to execute the following change to the ACN-13-FX contract:

1. 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 October 30, 2017 to November 26, 2017 (Operating Period 50) as follows:

TIERS: Base - Tier 5

From:

[*] 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)     Ron D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/ RON D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   11-3-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 11/7/17

* 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   2     Of       3

CONTRACT/ORDER NO.   ACN-13-FX/110 AWARD/ EFFECTIVE DATE     10/30/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO. SOLICITATION         ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	To: [*] per cubic foot This is an increase of [*]. TIERS: 6 – 8 TIER 6: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. TIER 7: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. TIER 8: From: [*] per cubic foot To: [*] per cubic foot This is an increase of [*]. [*] - Sub Rept Req’d: Y Carrier Code: FX Route Termini S: Various Route Termini End: Various Payment Terms: SEE CONTRACT Delivery: 11/28/2016 Discount Terms: See Schedule Accounting Info: BFN: 670167 FOB: Destination Period of Performance: 09/30/2013 to 09/29/2024 Change Item 1 to read as follows:
1	Day Network Account Number: 53503 Continued...				[*]

* 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   3     OF       3

CONTRACT/ORDER NO.   ACN-13-FX/110 AWARD/ EFFECTIVE DATE     10/30/2017 MASTER/AGENCY CONTRACT NO.     SOLICITATION NO. SOLICITATION         ISSUE DATE

ITEM NO	SCHEDULE OF SUPPLIES/SERVICES	QUANTITY	UNIT	UNIT PRICE	AMOUNT
	This is for estimation purposes only and is not a guarantee of contract value.

EX-10.11

Exhibit 10.11

FedEx contract 07-0255-036

Supplemental Agreement No. 27

to

Purchase Agreement No. 3157

between

The Boeing Company

And

Federal Express Corporation

Relating to Boeing Model 777-FREIGHTER Aircraft

THIS SUPPLEMENTAL AGREEMENT No. 27 (SA-27), entered into as of the 12th day of October 2017, by and between THE BOEING COMPANY (Boeing) and FEDERAL EXPRESS CORPORATION (Customer);

W I T N E S S E T H:

A. WHEREAS, the parties entered into that certain Purchase Agreement No. 3157, dated November 7, 2006 (Purchase Agreement), relating to the purchase and sale of certain Boeing Model 777-FREIGHTER Aircraft (Aircraft);

B. WHEREAS, Customer desires to reschedule the delivery month of one (1) Block B Aircraft as shown in the table below (SA-27 Accelerated Block B Aircraft):

Aircraft Block	Existing Delivery Month of Aircraft	Revised Delivery Month of Aircraft
B	[*]	[*]

C. WHEREAS, Boeing has agreed to provide additional commercial and business considerations for the SA-27 Accelerated Block B Aircraft.

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree to supplement the Purchase Agreement as follows:

All terms used herein and in the Purchase Agreement, and not defined herein, shall have the same meaning as in the Purchase Agreement.

1. Remove and replace, in its entirety, the “Table of Contents” with the revised Table of Contents, attached hereto, to

* 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.

P.A. No. 3157	1	SA–27
	BOEING PROPRIETARY

reflect the changes made by this Supplemental Agreement No. 27.

2. Boeing and Customer agree that upon execution of this Supplemental Agreement No. 27 the SA-27 Accelerated Block B Aircraft is hereby rescheduled as described in Recital Paragraph B above.

3. Remove and replace, in its entirety, “Table 1-A”, with the revised Table 1-A, attached hereto, revised to reflect revised delivery month and [*], Advance Payment Base Price and Advance Payments, subject to Paragraph 4, below, resulting from the reschedule of the SA-27 Accelerated Block B Aircraft.

4. Add Letter Agreement 6-1162-LKJ-0758, Special Matters – SA-27 Accelerated Block B Aircraft, attached hereto, to reflect additional commercial and business considerations to be provided for the SA-27 Accelerated Block B Aircraft. For the avoidance of doubt, the SA-27 Accelerated Block B Aircraft also retains the commercial and business considerations applicable to Block B Aircraft.

5. As a result of the changes incorporated in this Supplemental Agreement No. 27, Customer will owe a payment to Boeing in an amount equal to [*] (SA-27 Payment Amount). Customer will pay Boeing such SA-27 Payment Amount within three (3) business days of executing this Supplemental Agreement No. 27.

6. This Supplemental Agreement No. 27 to the Purchase Agreement shall not be effective unless executed and delivered by the parties on or prior to October 13, 2017.

* 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.

P.A. No. 3157	2	SA–27
	BOEING PROPRIETARY

EXECUTED as of the day and year first above written.

THE BOEING COMPANY		FEDERAL EXPRESS CORPORATION
By:	/s/ L. Kirsten Jensen	By:	/s/ Ray Carroll
Its:	Attorney-In-Fact	Its:	Vice President

P.A. No. 3157	3	SA–27
	BOEING PROPRIETARY

TABLE OF CONTENTS

ARTICLES		SA NUMBER
1.	Quantity, Model and Description
2.	Delivery Schedule
3.	Price
4.	Payment
5.	Miscellaneous
TABLE
1.	Aircraft Information Table		15
1A	Block B Firm Aircraft Information Table		27
1B	Block B Conditional Firm Aircraft Information Table		26
1C	Block C Aircraft Information Table		13
1C1	Block C Aircraft Information Table (MSN 39285)		11
1C2	Block C Aircraft Information Table		26
1D	Block D Aircraft Information Table		20
EXHIBIT
A.	Aircraft Configuration		4
A1.	Aircraft Configuration (Block B Aircraft)		4
A2.	Aircraft Configuration (Block C Aircraft except MSN 39285)		11
A3.	Aircraft Configuration (Block C Aircraft w/ MSN 39285)		11
A4.	Aircraft Configuration (Block D Aircraft)		12
B.	Aircraft Delivery Requirements and Responsibilities
SUPPLEMENTAL EXHIBITS
AE1.	Escalation Adjustment/Airframe and Optional Features
CS1.	Customer Support Variables
EE1.	Engine Escalation/Engine Warranty and Patent Indemnity
SLP1.	Service Life Policy Components

P.A. No. 3157	4	SA–27
	BOEING PROPRIETARY

LETTER AGREEMENT		SA NUMBER
3157-01	777 Spare Parts Initial Provisioning
3157-02	Demonstration Flight Waiver
6-1162-RCN-1785	Demonstrated Compliance
6-1162-RCN-1789	Option Aircraft Attachment to Letter 6-1162-RCN-1789	Exercised in SA # 4
6-1162-RCN-1790	Special Matters
6-1162-RCN-1791	Performance Guarantees	4
6-1162-RCN-1792	Liquidated Damages Non-Excusable Delay
6-1162-RCN-1793	Open Configuration Matters
6-1162-RCN-1795	AGTA Amended Articles
6-1162-RCN-1796	777 First-Look Inspection Program
6-1162-RCN-1797	Licensing and Customer Supplemental Type Certificates
6-1162-RCN-1798	777 Boeing Converted Freighter	Deleted in SA # 4
6-1162-RCN-1798 R1	777 Boeing Converted Freighter	4
6-1162-RCN-1799R1	[*]	24
6-1162-RRO-1062	Option Aircraft Attachment to Letter 6-1162-RRO-1062	26
6-1162-RRO-1065	Performance Guarantees for Block B Aircraft	4
6-1162-RRO-1066R1	Special Matters for Block B Aircraft	22
6-1162-RRO-1067	Special Matters for Option Aircraft detailed in Letter Agreement 6-1162-RRO-1062	4
6-1162-RRO-1068	Special Provision – Block B Aircraft	4
FED-PA-LA-1000790R3	Special Matters for Block C Aircraft	20
FED-PA-LA-1001683R2	Special Matters for Block D Aircraft	19
6-1162-RRO-1144R7	[*] as related to SAs #8, #13 through #16, SA # 18 through SA #20	20
6-1162-SCR-137	777F Miscellaneous Matters	20
6-1162-SCR-154	[*] Letter	22
6-1162-SCR-155	[*] Engine Hard Mount Letter	22
6-1162-SCR-186	[*], Non-Isolated Engine Mounts Letter	23
6-1162-SCR-193	[*] Matters	23

* 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.

P.A. No. 3157	5	SA–27
	BOEING PROPRIETARY

LETTER AGREEMENT		SA NUMBER
6-1162-LKJ-0726	[*]	24
	SA-24 Accelerated Block B Aircraft
6-1162-LKJ-0737	Special Matters – SA-26 Accelerated Block C Aircraft	26
6-1162-LKJ-0758	Special Matters – SA-27 Accelerated Block B Aircraft	27

* 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.

P.A. No. 3157	6	SA–27
	BOEING PROPRIETARY

SUPPLEMENTAL AGREEMENTS	SA           DATED AS OF:
Supplemental Agreement No. 1	May 12, 2008
Supplemental Agreement No. 2	July 14, 2008
Supplemental Agreement No. 3	December 15, 2008
Supplemental Agreement No. 4	January 9, 2009
Supplemental Agreement No. 5	January 11, 2010
Supplemental Agreement No. 6	March 17, 2010
Supplemental Agreement No. 7	March 17, 2010
Supplemental Agreement No. 8	April 30, 2010
Supplemental Agreement No. 9	June 18, 2010
Supplemental Agreement No. 10	June 18, 2010
Supplemental Agreement No. 11	August 19, 2010
Supplemental Agreement No. 12	September 3, 2010
Supplemental Agreement No. 13	August 27, 2010
Supplemental Agreement No. 14	October 25, 2010
Supplemental Agreement No. 15	October 29, 2010
Supplemental Agreement No. 16	January 31, 2011
Supplemental Agreement No. 17	February 14, 211
Supplemental Agreement No. 18	March 31, 2011
Supplemental Agreement No. 19	October 27, 2011
Supplemental Agreement No. 20	December 14, 2011
Supplemental Agreement No. 21	June 29, 2012
Supplemental Agreement No. 22	December 11, 2012
Supplemental Agreement No. 23	December 10, 2013
Supplemental Agreement No. 24	May 4, 2016
Supplemental Agreement No. 25	June 10, 2016

P.A. No. 3157	7	SA–27
	BOEING PROPRIETARY

Supplemental Agreement No. 26	February 10, 2017
Supplemental Agreement No. 27	October     , 2017

P.A. No. 3157	8	SA–27
	BOEING PROPRIETARY

Table 1-A to Purchase Agreement No. 3157

Aircraft Delivery, Description, Price and Advance Payments

Block B Firm

Airframe Model/MTOW:	777-Freighter	766000 pounds	Detail Specification: D019W007FED7F-1, Rev G dated July 25, 2012
Engine Model/Thrust:	GE90-110B1L	110000 pounds	Airframe Price Base Year/Escalation Formula:	[*]	ECI-MFG/CPI
Airframe Price:		[*]	Engine Price Base Year/Escalation Formula:	N/A	N/A
Optional Features:		[*]
Sub-Total of Airframe and Features:		[*]	Airframe Escalation Data:
Engine Price (Per Aircraft):		[*]	Base Year Index (ECI):	[*]
Aircraft Basic Price (Excluding BFE/SPE):		[*]	Base Year Index (CPI):	[*]
Buyer Furnished Equipment (BFE) Estimate:		[*]
Seller Purchased Equipment (SPE) Estimate:		[*]
Non-Refundable Deposit/Aircraft at Def Agreement:		[*]

						Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
Delivery	Number of	Escalation Factor	MSN		Escalation Estimate Adv Payment Base	At Signing	24 Mos.	21/18/15/12/9/6 Mos.	Total
Date	Aircraft	(Airframe)			Price Per A/P	1%	4%	5%	35%
[*]	1	[*]	[*]		[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]		[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	SA-24 Accelerted Block B Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]		[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	[*]	SA-27 Accelerated Block B Aircraft	[*]	[*]	[*]	[*]	[*]
Total:	5		1    SA-24 Accelerated Block B Aircraft. [*] for the SA-24 Accelerated Block B Aircraft are subject to Letter Agreement 6-1162-LKJ-0726.
			2    SA-27 Accelerated Block B Aircraft. [*] for the SA-27 Accelerated Block B Aircraft are subject to Letter Agreement 6-1162-LKJ-0758.

NOTES:    [*]

* 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.

APR No. 62654, 79650, 106232		Supplemental Agreement No. 27
	BOEING PROPRIETARY

	The Boeing Company
	P.O. Box 3707
	Seattle, WA 98124-2207

FedEx contract # 07-0255-M    

6-1162-LKJ-0758

Federal Express Corporation

3131 Democrat Road

Memphis, TN 38125

Subject:	Special Matters – SA-27 Accelerated Block B Aircraft
Reference:	(a) Purchase Agreement No. 3157 (Purchase Agreement) between The Boeing Company (Boeing) and Federal Express Corporation (Customer) relating to Model 777-FREIGHTER aircraft (Aircraft)
	(b) Letter Agreement 6-1162-RCN-1799R1, [*]

This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement.    The terms of this Letter Agreement apply to the SA-27 Accelerated Block B Aircraft as defined in Supplemental Agreement No. 27 to the Purchase Agreement (SA-27).

1.      In consideration of the acceleration of the SA-27 Accelerated Block B Aircraft, Boeing will provide Customer, the following additional business considerations.

1.1 [*] Advance Payment.

As a consequence of the acceleration of the SA-27 Accelerated Block B Aircraft, Customer will owe certain advance payments for the SA-27 Accelerated Block B Aircraft before [*] in accordance with the advance payment schedule provided in Table 1-A of the Purchase Agreement (Standard Advance Payment Schedule). [*]

1.2 [*]

[*]

1.2.1 [*]

[*]

1.2.2 Performance Period.

Notwithstanding paragraph 1.4, of the reference (b) letter agreement, the Performance Period for the [*] set forth in paragraph 1.2.1 above will be the period beginning on the date of this Letter Agreement and ending one (1) year after the scheduled delivery of the SA-27 Accelerated Block B Aircraft.

* 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.

6-1162-LKJ-0758		Page 1
Special Matters – SA-27 Accelerated Block B Aircraft		SA-27
	BOEING PROPRIETARY

1.2.3 Method of Performance.

[*]

2. ASSIGNMENT.

The commercial and other business arrangements set forth in this Letter Agreement are [*] to Customer and in consideration of Customer taking title to the SA-27 Accelerated Block B Aircraft at the time of delivery and cannot be assigned, in whole or in part, without the prior written consent of Boeing.

3. CONFIDENTIAL TREATMENT.

Customer and Boeing consider certain commercial and financial information contained in this Letter Agreement as confidential. Each of Customer and Boeing agree that it will treat this Letter Agreement and the information contained herein as confidential. Customer agrees to limit the disclosure of the contents of this Letter Agreement to employees of Customer with a need to know and who understand that they are not to disclose its content to any other person or entity without the prior written consent of Boeing. Notwithstanding the forgoing, Customer may disclose this Letter Agreement and the terms and conditions herein to its parent company, FedEx Corporation, to the Board of Directors of its parent corporation, FedEx Corporation, to its professional advisors under a duty of confidentiality with respect hereto, and as required by law.

* 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.

6-1162-LKJ-0758		Page 2
Special Matters – SA-27 Accelerated Block B Aircraft		SA-27
	BOEING PROPRIETARY

Very truly yours,

THE BOEING COMPANY
By	/s/ L. Kirsten Jensen
Its	Attorney-In-Fact

    ACCEPTED AND AGREED TO this

    Date: October 12, 2017

FEDERAL EXPRESS CORPORATION
By	/s/ Ray Carroll
Its	Vice President

6-1162-LKJ-0758		Page 3
Special Matters – SA-27 Accelerated Block B Aircraft		SA-27
	BOEING PROPRIETARY

EX-10.12

Exhibit 10.12

FedEx Corporation

2010 OMNIBUS STOCK INCENTIVE PLAN

Section 1. Purpose

The purpose of the FedEx Corporation 2010 Omnibus Stock Incentive Plan is to aid the Company and its Affiliates in retaining, attracting and rewarding Non-Management Directors and designated employees and to motivate them to exert their best efforts to achieve the long-term goals of the Company and its Affiliates. The Company believes that the ownership or increased ownership of Common Stock by employees and directors, or otherwise linking the compensation of employees and directors to the value of Common Stock, will further align their interests with those of the Company’s other stockholders and will promote the long-term success of the Company and the creation of long-term stockholder value. Accordingly, the Plan authorizes the grant of equity incentive awards to designated employees of the Company and its Affiliates and to directors of the Company.

Section 2. Definitions and Rules of Construction

2.1 Definitions. The following capitalized terms used in the Plan shall have the respective meanings set forth below:

“Affiliate” means (a) any Subsidiary and (b) any other entity that, directly or through one or more intermediaries, is controlled by the Company, as determined by the Committee.

“Award” means any Stock Option, Stock Appreciation Right, Restricted Share, Restricted Stock Unit, Dividend Equivalent or Other Stock-Based Award, together with any related right or interest, granted to a Participant under the Plan.

“Award Agreement” means a written or electronic agreement between the Company and a Participant setting forth the terms, conditions, restrictions and other provisions of an Award granted to the Participant.

“Board of Directors” means the Board of Directors of the Company.

“Change of Control” has the meaning given such term in Section 20.1.

“Code” means the Internal Revenue Code of 1986, as amended. For purposes of the Plan, references to sections of the Code shall be deemed to include references to any applicable regulations, including proposed regulations, and other guidance issued thereunder by the Department of Treasury or the Internal Revenue Service, and any successor provisions and regulations.

“Committee” means those members, not less than two, of the Compensation Committee of the Board of Directors who are Independent Directors, or any successor committee or subcommittee of the Board of Directors designated by the Board of Directors, which committee or subcommittee shall be comprised of two or more members of the Board of Directors, each of whom is an Independent Director.

“Common Stock” means the common stock, par value $0.10 per share, of the Company and such other securities of the Company as may be substituted for Common Stock pursuant to Section 19.1 or 19.2.

“Company” means FedEx Corporation, a Delaware corporation.

“Covered Employee” means an employee of the Company or an Affiliate who is a “covered employee” within the meaning of Code Section 162(m)(3).

“Disability” means “permanent disability” as determined by the Committee in its sole discretion.

“Dividend Equivalent” means the right granted to a Participant under Section 14 of the Plan to receive a payment in an amount equal to the dividends paid on one outstanding Share with respect to all or a portion of the Shares subject to a Full-Value Award held by such Participant.

“Effective Date” has the meaning given such term in Section 3.1.

“Eligible Person” means (a) any employee of the Company or an Affiliate, (b) any individual to whom an offer of employment with the Company or an Affiliate is made, as determined by the Committee (provided that such prospective employee may not receive any payment or exercise any right with respect to an Award until such person has commenced such employment), and (c) any Non-Management Director.

“Exchange Act” means the Securities Exchange Act of 1934, as amended. A reference to any provision of the Exchange Act or rule promulgated under the Exchange Act shall include reference to any successor provision or rule.

“Exercise Price” means (a) in the case of a Stock Option, the amount for which a Share may be purchased upon exercise of such Stock Option, as set forth in the applicable Award Agreement, and (b) in the case of a Stock Appreciation Right, the per Share amount, as specified in the applicable Award Agreement, which is subtracted from the Fair Market Value of a Share in determining the amount payable upon exercise of such SAR.

“Fair Market Value” means, on any date, (a) the average of the high and low per Share sales prices as reported on the New York Stock Exchange composite tape on that date or (b) if such method is not practicable, the value of a Share as determined by the Committee using such other method as it deems appropriate.

“Full-Value Award” means any Award other than in the form of a Stock Option or Stock Appreciation Right and which is settled by the issuance of Shares (or at the discretion of the Committee, settled in cash or other consideration by reference to the value of Shares).

“Grant Date” means the date on which the Committee completes the corporate action authorizing the grant of an Award or such later date as is determined and specified by the Committee as part of that authorization process.

“Incentive Stock Option” or “ISO” means a Stock Option or portion thereof that is intended to be and specifically designated as an “incentive stock option” within the meaning of Code Section 422 and meets the requirements thereof.

“Independent Director” means a member of the Board of Directors who qualifies at any given time as (a) an “independent director” under Section 303A of the New York Stock Exchange Listed Company Manual, (b) an “outside director” within the meaning of Code Section 162(m), and (c) a “non-employee director” as defined in Rule 16b-3.

“Minimum Vesting Requirement” has the meaning given such term in Section 4.2(f).

“Net Exercise” means a Participant’s ability (if authorized by the Committee) to exercise a Stock Option by directing the Company to deduct from the Shares issuable upon exercise of his or her Stock Option a number of Shares having an aggregate Fair Market Value equal to the sum of the aggregate Exercise Price therefor plus the amount of the Participant’s tax withholding (if any), whereupon the Company shall issue to the Participant the net remaining number of Shares after such deduction.

“Non-Management Director” means a member of the Board of Directors who is not an employee of the Company or an Affiliate.

“Non-Qualified Stock Option” or “NQSO” means a Stock Option or portion thereof that is not an Incentive Stock Option.

“Other Stock-Based Award” means an Award granted to a Participant under Section 15 of the Plan.

“Participant” means any Eligible Person who receives an Award under the Plan.

“Performance Award” means an Award that includes performance conditions as specified by the Committee pursuant to Section 12 of the Plan.

“Performance Period” has the meaning given such term in Section 13.2.

“Plan” means the FedEx Corporation 2010 Omnibus Stock Incentive Plan, as amended from time to time.

2

“Qualified Performance-Based Award” means an Award that is either (a) in the form of Restricted Shares, Restricted Stock Units or Other Stock-Based Awards, is intended to qualify for the Section 162(m) Exemption, is made subject to performance goals based on Qualified Performance Criteria as set forth in Section 13.3, and is designated by the Committee as a Qualified Performance-Based Award pursuant to Section 13 of the Plan, or (b) a Stock Option or Stock Appreciation Right having an Exercise Price equal to or greater than the Fair Market Value of a Share as of the Grant Date.

“Qualified Performance Criteria” means one or more of the business criteria listed in Section 13.3 upon which performance goals for certain Qualified Performance-Based Awards may be established by the Committee.

“Reporting Person” means an employee of the Company or an Affiliate who is subject to the reporting requirements of Section 16(a) of the Exchange Act.

“Restricted Shares” means Shares granted to a Participant under Section 10 of the Plan that are subject to certain restrictions and conditions and to a risk of forfeiture.

“Restricted Stock Unit” or “RSU” means the right to acquire one Share, or receive the equivalent amount in cash, granted to a Participant under Section 11 of the Plan, which right is subject to certain restrictions and conditions and to a risk of forfeiture.

“Retirement ” means with respect to any Participant, (a) the attainment by the Participant of the age of 55 and the cessation of the Participant’s Service, or (b) the Participant’s “retirement” as determined by the Committee in its sole discretion.

“Rule 16b-3” means Rule 16b-3 under the Exchange Act.

“Section 162(m) Exemption” means the exemption from the limitation of deductibility under Section 162(m)(4)(C) of the Code.

“Securities Act” means the Securities Act of 1933, as amended, and the rules promulgated thereunder or any successor statute thereto.

“Service” means a Participant’s employment with the Company or an Affiliate or a Participant’s service as a Non-Management Director, as applicable.

“Shares” means shares of Common Stock.

“Stock Appreciation Right” or “SAR” means a right granted to a Participant under Section 9 of the Plan to receive a payment equal to the excess of the Fair Market Value of a Share as of the date of exercise of the SAR over the Exercise Price of the SAR.

“Stock Option” means a right granted to a Participant under Section 8 of the Plan to purchase a specified number of Shares at a specified price during a specified time period. A Stock Option may be an Incentive Stock Option or a Non-Qualified Stock Option.

“Subsidiary” means any corporation or other entity of which the Company possesses, directly or through one or more intermediaries, 50% or more of the total combined voting power of such entity.

“Substitute Awards” means Awards granted under Section 7.6 in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or an Affiliate.

2.2 Rules of Construction. The section and other headings contained in the Plan are for reference purposes only and shall not affect the meaning or interpretation of the Plan. Unless the context clearly requires otherwise: (a) references to the plural include the singular and to the singular include the plural; (b) the terms “includes” and “including” are not limiting; (c) the term “or” has the inclusive meaning represented by the phrase “and/or”; and (d) any grammatical form or variant of a term defined in the Plan shall be construed to have a meaning corresponding to the definition of the term set forth herein. The terms “hereof,” “hereto,” “hereunder” and similar terms in the Plan refer to the Plan as a whole and not to any particular provision of the Plan.

3

Section 3. Term of the Plan

3.1 Effective Date. The Plan shall be effective as of the date on which it is approved by the Company’s stockholders (the “Effective Date”).

3.2 Term of the Plan. Unless the Plan is earlier terminated in accordance with the provisions hereof, no Award shall be granted under the Plan after June 30, 2020, but Awards granted on or prior to such date shall continue to be governed by the terms and conditions of the Plan and the applicable Award Agreement (including terms regarding amendments to or modifications of outstanding Awards).

Section 4. Administration of the Plan

4.1 The Committee. The Plan shall be administered by the Committee. No action of the Committee under the Plan shall be void or deemed to be without authority due to a Committee member’s failure to qualify as an Independent Director at the time the action was taken.

4.2 Committee Authority. Subject to the express provisions of the Plan, the Committee shall have full and exclusive power, authority and discretion to take any and all actions necessary, appropriate or advisable for the administration of the Plan, including the following:

(a) Select Eligible Persons to become Participants;

(b) Grant Awards;

(c) Delegate the granting of Awards as specified in Section 4.5;

(d) Determine the type or types of Awards to be granted to each Participant and the timing thereof;

(e) Determine the number of Awards to be granted and the number of Shares to which an Award will relate;

(f) Determine the terms, conditions, restrictions and other provisions of each Award, provided that the vesting schedule of any Award granted hereunder (other than Awards involving an aggregate number of Shares equal to or less than 5% of the Shares available for issuance pursuant to Awards under the Plan) shall provide that no portion of such Award may become vested or exercisable prior to the first anniversary of the Grant Date of such Award, subject, however, to the provisions of Sections 4.2(i), 7.6, 13.4, 18, 19.2, 20 and 22 (the “Minimum Vesting Requirement”);

(g) Establish performance conditions for Performance Awards and Qualified Performance-Based Awards, and verify the level of performance attained with respect to such performance conditions;

(h) Prescribe the form of each Award Agreement, which need not be identical for each Participant;

(i) Amend, modify, suspend, discontinue or terminate the Plan, waive any restrictions or conditions applicable to any Award, or amend or modify the terms and conditions of any outstanding Award;

(j) Adopt sub-plans or supplements to, or alternative versions of, the Plan as the Committee deems necessary or desirable to comply with the laws or regulations of or to accommodate the tax policy or custom of, foreign jurisdictions;

(k) Establish, adopt or revise rules, guidelines and policies for the administration of the Plan;

(l) Construe and interpret the Plan, any Award Agreement and any other documents and instruments relating to the Plan or any Award;

(m) Correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement; and

(n) Make all other decisions and determinations and take such other actions with respect to the Plan or any Award as the Committee may deem necessary, appropriate or advisable for the administration of the Plan.

The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee.

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4.3 Grants to Non-Management Directors.

(a) Awards. Notwithstanding any other provision of the Plan, including Sections 4.1 and 4.2, any Awards made under the Plan to Non-Management Directors shall be approved, or made in accordance with a policy or program approved, by the Board of Directors; provided, however, (1) the Committee shall recommend such Awards, policy or program to the Board of Directors for its approval and (2) the Committee retains full independent authority conferred under the Plan with respect to all other aspects of Awards to Non-Management Directors. Solely with respect to the grant of Awards to Non-Management Directors, all rights, powers and authorities vested in the Committee under the Plan with respect thereto shall instead be exercised by the Board of Directors and any reference in the Plan to the Committee shall be deemed to include a reference to the Board of Directors.

(b) Retainers and Meeting Fees. Upon such terms and conditions as may be established by the Board of Directors, each Non-Management Director may elect to have all or part of his or her retainer and meeting fees paid in Shares under the Plan.

4.4 Actions and Interpretations by the Committee. All interpretations, decisions, determinations and actions under or with respect to the Plan shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive and binding on all persons, including Participants, persons claiming rights from or through a Participant, and stockholders. The Committee’s determinations under the Plan need not be uniform and may be made selectively among Participants, whether or not such Participants are similarly situated.

4.5 Delegation of Authority.

(a) Subject to any applicable laws, rules or regulations (including Section 157(c) of the Delaware General Corporation Law or any successor provision), the Committee may, by resolution, expressly delegate to one or more officers of the Company the authority, within specified parameters as to the number, types and terms of Awards, to (1) designate Eligible Persons to be recipients of Awards and (2) determine the number of such Awards to be received by any such Participants; provided, however, that such delegation may not be made with respect to Awards to be granted to any Non-Management Director, any Eligible Person who is a Reporting Person or any Eligible Person who is then a Covered Employee.

(b) The Committee may delegate to any appropriate officer or employee of the Company or an Affiliate responsibility for performing ministerial and administrative functions under the Plan.

(c) In the event that the Committee’s authority is delegated to any officer or employee in accordance with Section 4.5(a) or (b), any actions undertaken by such person in accordance with the Committee’s delegation of authority shall have the same force and effect as if undertaken directly by the Committee, and any reference in the Plan to the Committee shall, to the extent consistent with the terms and limitations of such delegation, be deemed to include a reference to such officer or employee.

4.6 Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished by any officer or employee of the Company or an Affiliate, the Company’s independent certified public accountants, counsel or other advisors to the Company, or any consultant, attorney, accountant or other advisor retained by the Committee to assist in the administration of the Plan. Neither the Board of Directors nor the Committee, nor any member of either, shall be liable for any act, omission, interpretation, decision, construction or determination made in good faith in connection with the Plan or any Award.

Section 5. Shares Subject to the Plan; Maximum Awards

5.1 Number of Shares. Subject to the Share counting rules set forth in Section 5.3 and to adjustment as provided in Section 19, the aggregate number of Shares reserved and available for issuance pursuant to Awards granted under the Plan shall be 29,600,000, of which no more than 3,000,000 may be issued as Full-Value Awards.

5.2 Incentive Stock Options. The maximum number of Shares that may be issued upon exercise of Incentive Stock Options granted under the Plan shall be 19,600,000, subject to adjustment as provided in Section 19.

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5.3 Share Counting.

(a) The number of Shares covered by an Award, or to which an Award relates, shall be subtracted from the Plan Share reserve as of the Grant Date.

(b) To the extent an Award is canceled, terminates, expires, is forfeited or lapses for any reason (in whole or in part), any unissued or forfeited Shares subject to the Award shall be added back to the Plan Share reserve and available again for issuance pursuant to Awards granted under the Plan.

(c) Any Shares related to Awards that are settled in cash or other consideration in lieu of Shares shall be added back to the Plan Share reserve and available again for issuance pursuant to Awards granted under the Plan.

(d) Shares withheld or deducted from an Award by the Company to satisfy tax withholding requirements relating to Stock Options or Stock Appreciation Rights shall not be added back to the Plan Share reserve and shall not again be available for issuance pursuant to Awards granted under the Plan, but Shares withheld or deducted by the Company to satisfy tax withholding requirements relating to Full-Value Awards shall be added back to the Plan Share reserve and available again for issuance pursuant to Awards granted under the Plan. Shares delivered by a Participant to the Company to satisfy tax withholding requirements shall be treated in the same way as Shares withheld or deducted from an Award as specified above for purposes of Share counting under this Section 5.3(d).

(e) To the extent that the full number of Shares subject to a Stock Option or a Share-settled Stock Appreciation Right is not issued upon exercise of such Stock Option or Stock Appreciation Right for any reason, including by reason of a net settlement or Net Exercise, then all Shares that were covered by the exercised Stock Option or SAR shall not be added back to the Plan Share reserve and shall not again be available for issuance pursuant to Awards granted under the Plan.

(f) If the Exercise Price of a Stock Option is satisfied by delivering Shares to the Company (by either actual delivery or attestation), such Shares shall not be added to the Plan Share reserve and shall not be available for issuance pursuant to Awards granted under the Plan.

(g) To the extent that the full number of Shares subject to a Performance Award or Qualified Performance-Based Award (other than a Stock Option or Stock Appreciation Right) is not issued by reason of failure to achieve maximum performance goals, the number of Shares not issued shall be added back to the Plan Share reserve and shall be available again for issuance pursuant to Awards granted under the Plan.

(h) Shares repurchased on the open market with the proceeds of a Stock Option exercise shall not be added to the Plan Share reserve and shall not be available for issuance pursuant to Awards granted under the Plan.

(i) Any Dividend Equivalent denominated in Shares shall be counted against the aggregate number of Shares available for issuance pursuant to Awards under the Plan in such amount and at such time as the Dividend Equivalent first constitutes a commitment to issue Shares.

(j) Substitute Awards granted pursuant to Section 7.6 shall not count against the Plan Share reserve and the Shares otherwise available for issuance under the Plan.

5.4 Source of Shares. Shares issued under the Plan may consist, in whole or in part, of authorized but unissued shares or treasury shares.

5.5 Fractional Shares. No fractional Shares shall be issued under or pursuant to the Plan or any Award and the Committee shall determine, in its sole discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.

5.6 Maximum Awards. Subject to adjustment as provided in Section 19:

(a) Stock Options. The maximum aggregate number of Shares subject to Stock Options granted under the Plan to any one Participant during any fiscal year of the Company shall be 1,000,000.

(b) SARs. The maximum aggregate number of Shares subject to Stock Appreciation Rights granted under the Plan to any one Participant during any fiscal year of the Company shall be 1,000,000.

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(c) Restricted Shares. The maximum aggregate number of Restricted Shares granted under the Plan to any one Participant during any fiscal year of the Company shall be 500,000.

(d) RSUs. The maximum aggregate number of Shares underlying Awards of Restricted Stock Units granted under the Plan to any one Participant during any fiscal year of the Company shall be 500,000.

(e) Other Stock-Based Awards. The maximum aggregate number of Shares underlying Other Stock-Based Awards granted under the Plan to any one Participant during any fiscal year of the Company shall be 500,000.

(f) Performance Awards. The maximum aggregate number of Shares underlying Performance Awards granted under the Plan to any one Participant during any fiscal year of the Company shall be as set forth in Sections 5.6(a) – (e) above.

(g) Qualified Performance-Based Awards. The maximum aggregate number of Shares underlying Qualified Performance-Based Awards (other than Stock Options and Stock Appreciation Rights ) granted under the Plan to any one Participant during any fiscal year of the Company shall be as set forth in Sections 5.6(c) – (e) above.

Section 6. Eligibility and Participation in the Plan; Limitation on Rights of Participants

6.1 Eligible Persons. Only Eligible Persons are eligible to be designated by the Committee to receive Awards and become Participants under the Plan.

6.2 Participation in the Plan. The Committee shall from time to time, in its sole and complete discretion and subject to the provisions of the Plan, designate those Eligible Persons to whom Awards shall be granted and shall determine the nature and amount of each Award.

6.3 No Right to Receive Award or Be Treated Uniformly.

(a) No Eligible Person or other person shall have any claim or right to receive an Award under the Plan, and no Participant, having received an Award, shall have any claim or right to receive a future Award.

(b) Neither the Company, its Affiliates nor the Committee has any obligation to treat Eligible Persons or Participants uniformly under the Plan. Determinations made under the Plan may be made by the Committee selectively among Eligible Persons and Participants, whether or not such persons are similarly situated.

(c) The grant of an Award under this Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Award or to all Awards or as are expressly set forth in the Award Agreement relating to such Award.

6.4 No Right to Employment or Service. Neither the Plan, any Award granted under the Plan nor any Award Agreement (a) shall be deemed to constitute an employment contract or confer or be deemed to confer upon any Eligible Person or Participant any right to remain employed by the Company or an Affiliate, as the case may be, or to continue to provide services as a Non-Management Director, or (b) interfere with or limit in any way the right of the Company or an Affiliate, as the case may be, to terminate an Eligible Person’s or Participant’s employment by the Company or an Affiliate or service as a Non-Management Director for any reason at any time.

Section 7. Awards Generally

7.1 Form and Grant of Awards. The Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Subject to the provisions of the Plan (including Section 21), Awards may, in the sole discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate, may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

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7.2 No Cash Consideration for the Grant of Awards. Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, Awards shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.

7.3 Award Agreements. Awards granted under the Plan shall be evidenced by an Award Agreement that shall contain such terms, conditions, restrictions and provisions as the Committee shall determine and that are not inconsistent with the Plan. The Committee may, in its sole discretion, require as a condition to any Award Agreement’s effectiveness that such Award Agreement be executed by the Participant, including by electronic signature or other electronic indication of acceptance. The terms and conditions of Award Agreements need not be the same with respect to each Participant.

7.4 Forms of Payment Under Awards. Subject to the provisions of the Plan, payment or settlement of Awards may be made in such form or forms as the Committee shall determine and as shall be set forth in the applicable Award Agreement, including Shares, cash, other securities of the Company, other Awards, any other form of property as the Committee shall determine, or any combination thereof. Payment of Awards may be made in a single payment or transfer, in installments, or on a deferred basis (subject to the provisions of Section 24.10), as determined by the Committee and subject to the provisions of the Plan.

7.5 Nontransferability of Awards; Beneficiaries.

(a) Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, no Award, nor any interest in such Award, may be sold, pledged, assigned, exchanged, encumbered, hypothecated, gifted, transferred or disposed of in any manner by the Participant, other than by will or by the laws of descent and distribution. Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, all rights with respect to Awards granted to a Participant under the Plan shall be exercisable during the Participant’s lifetime only by such Participant or a duly appointed legal guardian or legal representative of such Participant. Notwithstanding the foregoing, the Committee shall not permit any Participant to transfer an Award to a third party for value.

(b) Notwithstanding the provisions of Section 7.5(a), the Committee, in its sole discretion, may provide in the terms of an Award Agreement, or in any other manner prescribed by the Committee, that a Participant shall have the right to designate, in the manner determined by the Committee, a beneficiary or beneficiaries who shall be entitled to exercise any rights and to receive any payments or distributions with respect to an Award following the Participant’s death.

(c) A legal guardian, legal representative, beneficiary or other person claiming any rights under the Plan from or through a Participant shall be subject to all terms and conditions of the Plan and the relevant Award Agreement applicable to the Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary, appropriate or advisable by the Committee. If the Committee does not authorize the designation of a beneficiary, or if so authorized, no beneficiary has been designated or survives the Participant, an outstanding Award may be exercised by or shall become payable to the legal representative of the Participant’s estate.

7.6 Substitute Awards. The Committee may grant Awards under the Plan in assumption of, or in substitution or exchange for, stock and stock-based awards held by employees and directors of another entity who become Eligible Persons in connection with the acquisition (whether by purchase, merger, consolidation or other corporate transaction) by the Company or an Affiliate of the business or assets of the former employing entity (“Substitute Awards”). The Committee may direct that the Substitute Awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances.

7.7 Issuance of Shares. To the extent that the Plan or any Award Agreement provides for the issuance of Shares, the issuance may be effected on a certificated or non-certificated basis, subject to applicable law and the applicable rules of any stock exchange.

Section 8. Stock Options

8.1 Grant of Stock Options. The Committee may grant Stock Options to any Eligible Person selected by the Committee. Stock Options shall be designated, in the discretion of the Committee, as an Incentive Stock Option or as a Non-Qualified Stock Option or a combination thereof. Each Stock Option will be evidenced by an Award Agreement that shall set forth the number of Shares covered by the Stock Option, the Exercise Price, the term of the Stock Option, the vesting schedule, and such other terms, conditions and provisions as may be specified by the Committee consistent with the terms of the Plan.

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8.2 Exercise Price. The Exercise Price of a Stock Option shall be determined by the Committee, provided that the Exercise Price of a Stock Option (other than a Stock Option issued as a Substitute Award) shall not be less than 100% of the Fair Market Value of a Share on the Grant Date.

8.3 Exercise Term. The Committee shall determine the period during which a Stock Option may be exercised, provided that no Stock Option shall be exercisable for more than ten years from the Grant Date of such Stock Option.

8.4 Time and Conditions of Exercise. The Committee shall establish the time or times at which a Stock Option may be exercised in whole or in part, subject to Section 8.3 and the Minimum Vesting Requirement. The Committee also shall determine the performance or other conditions, if any, that must be satisfied before all or part of a Stock Option may be exercised.

8.5 Incentive Stock Options.

(a) Eligibility. Incentive Stock Options may be granted only to employees of (1) the Company or (2) an Affiliate that is a “subsidiary corporation” within the meaning of Code Section 424(f).

(b) Annual Limit. To the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year (under the Plan and any other stock option plan of the Company) exceeds $100,000 or, if different, the maximum limitation in effect at the time of grant under the Code (the Fair Market Value being determined as of the Grant Date for the ISO), such portion in excess of $100,000 shall be treated as a Non-Qualified Stock Option.

(c) Code Section 422. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Code Section 422. Any Stock Option or portion thereof that is designated as an ISO that for any reason fails to meet the requirements of an ISO shall be treated as a Non-Qualified Stock Option.

(d) Disqualifying Dispositions. If Shares acquired upon exercise of an Incentive Stock Option are disposed of within two years following the Grant Date of the ISO or one year following the transfer of such Shares to the Participant upon exercise, the Participant shall, promptly following such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information regarding the disposition as the Company may reasonably require.

8.6 No Reloads. Award Agreements for Stock Options shall not contain any provision entitling a Participant to the automatic grant of additional Stock Options in connection with the exercise of the original Stock Option.

8.7 Exercise Procedures. Stock Options may be exercised by Participants in accordance with such rules and procedures as may be established by the Committee.

8.8 Payment of Exercise Price. The full Exercise Price of a Stock Option shall be payable in cash at the time the Stock Option is exercised (including payment through a “cashless exercise” arrangement), together with any applicable withholding taxes. The Committee, in its sole discretion, may provide in an Award Agreement or otherwise (subject to such terms, conditions, provisions and restrictions set forth therein) that: (a) payment of all or any part of the aggregate Exercise Price of a Stock Option may be made by tendering (actually or by attestation) Shares already owned by the Participant; or (b) the Stock Option may be exercised through a Net Exercise procedure.

Section 9. Stock Appreciation Rights

9.1 Grant of SARs. The Committee may grant Stock Appreciation Rights to any Eligible Person selected by the Committee. An SAR may be granted in tandem with a Stock Option or alone (“freestanding”). Each SAR will be evidenced by an Award Agreement that shall set forth the number of Shares covered by the SAR, the Exercise Price, the term of the SAR, the vesting schedule, and such other terms, conditions and provisions as may be specified by the Committee consistent with the terms of the Plan.

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9.2 Freestanding SARs.

(a) Exercise Price. The Exercise Price of a freestanding Stock Appreciation Right shall be determined by the Committee, provided that the Exercise Price of a freestanding SAR (other than a freestanding SAR issued as a Substitute Award) shall not be less than 100% of the Fair Market Value of a Share on the Grant Date.

(b) Exercise Term. The Committee shall determine the period during which a freestanding Stock Appreciation Right may be exercised, provided that no freestanding SAR shall be exercisable for more than ten years from the Grant Date of such SAR.

(c) Time and Conditions of Exercise. The Committee shall determine the time or times at which a freestanding SAR may be exercised in whole or in part, subject to Section 9.2(b) and the Minimum Vesting Requirement. The Committee also shall determine the performance or other conditions, if any, that must be satisfied before all or part of a freestanding SAR may be exercised.

9.3 Tandem Stock Options/SARs. A Stock Appreciation Right may be granted in tandem with a Stock Option, either at the time of grant or at any time thereafter during the term of the Stock Option. A tandem Stock Option/SAR will entitle the Participant to elect, as to all or any portion of the number of Shares subject to the Award, to exercise either the Stock Option or the SAR, resulting in the reduction of the corresponding number of Shares subject to the right so exercised as well as the tandem right not so exercised. An SAR granted in tandem with a Stock Option shall have an Exercise Price equal to the Exercise Price of the Stock Option, will be vested and exercisable at the same time or times that a related Stock Option is vested and exercisable, and will expire no later than the time at which the related Stock Option expires.

9.4 Payment of SARs. Upon the exercise of a Stock Appreciation Right, the Participant shall be entitled to receive an amount determined by multiplying (a) the excess of the Fair Market Value of a Share on the date of exercise over the Exercise Price by (b) the number of Shares with respect to which the SAR is exercised. The payment upon exercise of an SAR may be in cash, Shares valued at their Fair Market Value on the date of exercise, any other form of consideration, or some combination thereof, as determined by the Committee and set forth in the applicable Award Agreement, and shall be subject to any applicable withholding taxes.

Section 10. Restricted Shares

10.1 Grant of Restricted Shares. The Committee may grant Restricted Shares to any Eligible Person selected by the Committee, in such amounts as shall be determined by the Committee. Each grant of Restricted Shares will be evidenced by an Award Agreement that shall set forth the number of Restricted Shares covered by the Award and the terms, conditions, restrictions and other provisions applicable to the Restricted Shares as may be specified by the Committee consistent with the terms of the Plan.

10.2 Restrictions and Lapse of Restrictions. Restricted Shares shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions as the Committee may impose. Subject to the Minimum Vesting Requirement, these restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, upon the satisfaction of performance goals or continued Service requirements, or otherwise, as determined by the Committee and set forth in the applicable Award Agreement. If the vesting requirements applicable to all or any part of an Award of Restricted Shares shall not be satisfied, the Restricted Shares with respect to which such requirements are not satisfied shall be returned to the Company.

10.3 Issuance of Restricted Shares. Restricted Shares shall be delivered to the Participant at the time of grant either by book-entry registration or by delivering to the Participant, or if required by the Committee, a custodian or escrow agent (including the Company or its designee) designated by the Committee, a stock certificate or certificates registered in the name of the Participant. If physical certificates representing the Restricted Shares are registered in the name of the Participant, such certificates may, if the Committee so determines, bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Shares.

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10.4 Additional Shares Received With Respect to Restricted Shares. Any Shares or other securities of the Company received by a Participant as a stock dividend on, or in connection with a stock split or combination, share exchange, reorganization, recapitalization, merger, consolidation or otherwise with respect to, Restricted Shares shall have the same status, be subject to the same restrictions and, if such Restricted Shares are represented by a certificate, bear the same legend, if any, as such Restricted Shares.

10.5 Rights with Respect to Shares. Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, a Participant who receives an Award of Restricted Shares shall have all rights of ownership with respect to such Restricted Shares, including the right to vote such Shares and to receive any dividends or other distributions paid or made with respect thereto, subject, however, to the provisions of the Plan, the applicable Award Agreement and, if such Restricted Shares are represented by a certificate, any legend on the certificate for such Shares.

Section 11. Restricted Stock Units

11.1 Grant of RSUs. The Committee may grant Restricted Stock Units to any Eligible Person selected by the Committee, in such amounts as shall be determined by the Committee. Each grant of RSUs will be evidenced by an Award Agreement that shall set forth the number of RSUs covered by the Award and the terms, conditions, restrictions and other provisions applicable to the RSUs as may be specified by the Committee consistent with the terms of the Plan.

11.2 Restrictions and Lapse of Restrictions. Restricted Stock Units shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions as the Committee may impose. Subject to the Minimum Vesting Requirement, these restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, upon the satisfaction of performance goals or continued Service requirements, or otherwise, as determined by the Committee and set forth in the applicable Award Agreement.

11.3 Settlement of RSUs. Restricted Stock Units shall become payable to a Participant at the time or times set forth in the Award Agreement, which may be upon or following the vesting of the Award (subject to the provisions of Section 24.10). RSUs may be paid in cash, Shares or a combination thereof, as determined by the Committee and set forth in the applicable Award Agreement, subject to any applicable withholding taxes.

11.4 No Rights as a Stockholder. The Participant shall have no rights as a stockholder with respect to an Award of Restricted Stock Units until such time as Shares are paid and delivered to the Participant in settlement of the RSUs pursuant to the terms of the Award Agreement.

Section 12. Performance Awards

12.1 Grant of Performance Awards. The Committee may specify that any Award granted under the Plan shall constitute a Performance Award by conditioning the right of a Participant to exercise the Award or have it settled, and the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the Committee. The Committee shall have the complete discretion to determine the number of Performance Awards granted to each Participant, subject to the provisions of Section 5.6, and to designate the terms, conditions and provisions of such Performance Awards (subject to the Minimum Vesting Requirement). Each Performance Award will be evidenced by an Award Agreement that shall set forth the terms, conditions and other provisions applicable to the Performance Award as may be specified by the Committee consistent with the terms of the Plan.

12.2 Performance Goals. The Committee may use such business criteria and other performance measures as it may deem appropriate in establishing any performance conditions for Performance Awards, and may reserve the right to exercise its discretion to reduce or increase the amounts payable under any Performance Award, provided that (a) such discretion shall be limited as provided in Section 13.6 with respect to Qualified Performance-Based Awards and (b) no discretion to reduce or increase the amounts payable (except pursuant to the provisions of Section 19) shall be reserved unless such reservation of discretion is expressly stated by the Committee at the time it acts to authorize or approve the grant of such Performance Award.

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Section 13. Qualified Performance-Based Awards

13.1 Stock Options and SARs. The provisions of the Plan are intended to ensure that all Stock Options and Stock Appreciation Rights granted hereunder to any Covered Employee shall qualify for the Section 162(m) Exemption.

13.2 Other Awards. When granting any Award under the Plan other than a Stock Option or Stock Appreciation Right, the Committee may designate such Award as a Qualified Performance-Based Award, based upon a determination that the Participant is or may be a Covered Employee with respect to such Award, and the Committee wishes such Award to qualify for the Section 162(m) Exemption. If an Award is so designated, the Committee shall establish objective performance goals for such Award no later than the earlier of (a) the date 90 days after the commencement of the period of service to which the performance goal or goals relate as determined by the Committee in its sole discretion (the “Performance Period”) and (b) the date on which 25% of such Performance Period has elapsed and, in any event, at a time when the outcome of the performance goals remains substantially uncertain. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.

13.3 Qualified Performance Criteria. Performance goals for Qualified Performance-Based Awards shall be based on one or more of the following Qualified Performance Criteria for the Company, on a consolidated basis or for a specified Affiliate or other business unit of the Company, or a division, region, department or function within the Company or an Affiliate:

(a) Revenues (net or gross);

(b) Profit (including net profit, pre-tax profit, gross profit, operating profit, economic profit, profit margins or other corporate profit measures);

(c) Earnings (including earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, earnings per share (basic or diluted) or other corporate earnings measures);

(d) Income (including net income (before or after taxes), operating income or other corporate income measures);

(e) Cash (including cash flow, free cash flow, operating cash flow, net cash provided by operations, cash flow in excess of cost of capital or other cash measures);

(f) Return measures (including return on assets (gross or net), return on equity, return on income, return on invested capital, return on operating capital, return on sales, and cash flow return on assets, capital, investments, equity or sales);

(g) Operating margin or profit margin;

(h) Contribution margin by business segment;

(i) Share price or performance;

(j) Total stockholder return;

(k) Economic value increased;

(l) Volume growth;

(m) Package yields;

(n) Expenses (including expense management, expense ratio, expense efficiency ratios, expense reduction measures or other expense measures);

(o) Operating efficiency or productivity measures or ratios;

(p) Dividend payout levels;

(q) Internal rate of return or increase in net present value; and

(r) Strategic business criteria consisting of one or more goals regarding, among other things, acquisitions and divestitures, successfully integrating acquisitions, customer satisfaction, employee satisfaction, safety standards, strategic plan development and implementation, agency ratings of financial strength, completion of financing transactions and new product development.

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Performance goals with respect to the foregoing Qualified Performance Criteria may be specified in absolute terms, in percentages, or in terms of growth from period to period or growth rates over time, and may be measured relative to the performance of one or more specified companies, or a published or special index, or a stock market index, as the Committee deems appropriate. Performance goals need not be based on audited financial results.

13.4 Performance Goals. Each Qualified Performance-Based Award (other than a Stock Option or Stock Appreciation Right) shall be earned, vested and payable (as applicable) only upon the achievement of the performance goals established by the Committee based upon one or more Qualified Performance Criteria, together with the satisfaction of any other conditions, such as continued Service, as the Committee may determine to be appropriate; provided, however, that the Committee may provide in the applicable Award Agreement, either at the time of grant or by amendment thereafter, that achievement of such performance goals will be waived, in whole or in part, upon (a) the termination of employment of a Participant by reason of death or Disability, or (b) the occurrence of a Change of Control. Performance Periods established by the Committee for any Qualified Performance-Based Award may be as short as one year and may be any longer period.

13.5 Calculation of Performance Goals. The Committee may provide in any Qualified Performance-Based Award, at the time the performance goals are established, that any evaluation of performance shall exclude or otherwise objectively adjust for any specified event that occurs during a Performance Period, including the following: (a) asset write-downs or impairment charges; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (d) accruals and charges for reorganization and restructuring programs; (e) acquisitions or divestitures; (f) foreign exchange gains and losses; (g) extraordinary nonrecurring items as described in Financial Accounting Standards Board Accounting Standards Codification Topic 225.20, “Income Statement — Extraordinary and Unusual Items”; and (h) extraordinary nonrecurring items as described in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.

13.6 Certification of Performance Goals. After the completion of the applicable Performance Period, the Committee shall certify in writing the extent to which any performance goals and any other material conditions relating to a Qualified Performance-Based Award (other than a Stock Option or Stock Appreciation Right) have been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting of such Award. Except as specifically provided in Section 13.4, no Qualified Performance-Based Award held by a Covered Employee or by an employee who in the reasonable judgment of the Committee may be a Covered Employee on the date of payment, may be amended, nor may the Committee exercise any discretionary authority it may otherwise have under the Plan with respect to a Qualified Performance-Based Award, in any manner to waive the achievement of the applicable performance goals based on Qualified Performance Criteria or to increase the amount payable pursuant thereto or the value thereof, or otherwise in a manner that would cause the Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption. Subject to the provisions of Section 12.2, the Committee may, however, exercise negative discretion to determine that the portion of a Qualified Performance-Based Award actually earned, vested or payable (as applicable) shall be less than the portion that would be earned, vested or payable based solely upon application of the applicable performance goals.

13.7 Award Limits. Section 5.6 sets forth the maximum number of Shares that may be granted to any one Participant during any fiscal year of the Company in designated forms of Awards.

Section 14. Dividend Equivalents

14.1 Grant of Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents with respect to Full-Value Awards granted hereunder, subject to such terms and conditions as may be established by the Committee and set forth in the applicable Award Agreement. Dividend Equivalents shall entitle the Participant to receive payments equal to dividends paid on outstanding Shares with respect to all or a portion of the number of Shares subject to a Full-Value Award, as determined by the Committee. The Committee may provide that Dividend Equivalents be paid or distributed when accrued or be deemed to have been reinvested in additional Shares, or otherwise reinvested; provided, however, that with respect to Dividend Equivalents payable on Performance Awards, such Dividend Equivalents may be earned but shall not be paid until payment or settlement of the underlying Performance Award.

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14.2 Options and SARs. Dividend Equivalents shall not be granted with respect to Stock Options or Stock Appreciation Rights.

Section 15. Other Stock-Based Awards

The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to Shares, as deemed by the Committee to be consistent with the purposes of the Plan, including Shares awarded purely as a “bonus” and not subject to any restrictions or conditions, Shares issued to Non-Management Directors pursuant to the provisions of Section 4.3(b), Shares issued in lieu of other rights to cash compensation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights for Shares and Awards valued by reference to the book value of Shares or the value of securities of or the performance of specified Affiliates. The Committee shall determine the terms and conditions of such Other Stock-Based Awards (any Other Stock-Based Award that includes continued Service requirements shall be subject to the Minimum Vesting Requirement), which shall be set forth in the applicable Award Agreement.

Section 16. Tax Withholding

16.1 Tax Withholding. The Company and its Affiliates shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company or an Affiliate, an amount sufficient to satisfy any federal, state, local or other taxes of any kind, domestic or foreign, required by any applicable law, rule or regulation to be withheld with respect to any grant, exercise, lapse of restriction, vesting, distribution, payment or other taxable event involving an Award or the Plan, and take such other action as the Committee may deem necessary, appropriate or advisable to enable the Company or an Affiliate to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. With respect to withholding required upon any taxable event under the Plan, the Committee may, at the time the Award is granted or thereafter, require or permit that any such withholding requirement be satisfied, in whole or in part, by delivery of, or withholding from the Award, Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in accordance with such procedures as the Committee establishes. All such elections shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

16.2 Company Not Liable. Neither the Company, any Affiliate, the Board of Directors, nor the Committee shall be liable to any Participant or any other person as to any tax consequences expected, but not realized, by any Participant or other person due to the grant, exercise, lapse of restriction, vesting, distribution, payment or other taxable event involving any Award. Although the Company and its Affiliates may endeavor to (a) qualify an Award for favorable tax treatment in a jurisdiction or (b) avoid adverse tax treatment for an Award, the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment.

Section 17. Compliance with Laws

17.1 Compliance with Laws. The Plan, all Awards (including the grant, exercise, payment and settlement thereof), and the issuance of Shares hereunder shall be subject to all applicable laws, rules and regulations, domestic or foreign, and to such approvals by any governmental agencies or securities exchange or similar entity as may be required. Notwithstanding any other provision of the Plan or the provisions of any Award Agreement, the Company shall have no obligation to issue or deliver any Shares under the Plan or make any other payment or distribution of benefits under the Plan unless such issuance, delivery, payment or distribution would comply with all applicable laws, rules and regulations (including the Securities Act and the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity. The Company may require any Participant to make such representations and warranties, furnish such information, take such action and comply with and be subject to such conditions as may be necessary, appropriate or advisable to comply with the foregoing.

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17.2 No Obligation to Register Shares. The Company shall be under no obligation to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any Shares, security or interest in a security payable, issuable or deliverable under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made.

17.3 Stock Trading Restrictions. All Shares issuable under the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state or foreign securities laws, rules and regulations and the rules of any securities exchange or similar entity. The Committee may place legends on any certificate evidencing Shares or issue instructions to the transfer agent to reference restrictions applicable to the Shares.

Section 18. Rights After Termination of Service; Acceleration For Other Reasons

18.1 Death. Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, if a Participant’s Service terminates by reason of his or her death:

(a) All of that Participant’s outstanding Stock Options and Stock Appreciation Rights that are not Performance Awards shall become fully exercisable and may thereafter be exercised in full by the legal representative of the Participant’s estate or by the beneficiary, if any, designated by the Participant pursuant to the provisions of Section 7.5(b), for a period of twelve months from the date of the Participant’s death or until the expiration of the stated period of the Stock Option or SAR, whichever period is shorter (to the extent that the provisions of this Section 18.1(a) cause Incentive Stock Options to fail to comply with the provisions of Code Section 422, such Stock Options shall be deemed to be Non-Qualified Stock Options); and

(b) All vesting restrictions and conditions on that Participant’s outstanding Restricted Shares that are not Performance Awards or Qualified Performance-Based Awards shall immediately lapse and such Restricted Shares shall be fully vested.

The applicable Award Agreement shall set forth the treatment of a Participant’s outstanding Restricted Stock Units, Performance Awards, Qualified Performance-Based Awards (other than Stock Options and SARs) and Other Stock-Based Awards upon a Participant’s termination of Service by reason of his or her death.

18.2 Disability. Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, if a Participant’s Service terminates by reason of his or her Disability:

(a) All of that Participant’s outstanding Stock Options and Stock Appreciation Rights that are not Performance Awards shall become fully exercisable and may thereafter be exercised in full for a period of twenty-four months from the date of such termination of Service or the stated period of the Stock Option or SAR, whichever period is the shorter; provided, however, that if the Participant dies within a period of twenty-four months after such termination of Service, any outstanding Stock Option or SAR may thereafter be exercised by the legal representative of the Participant’s estate or by the beneficiary, if any, designated by the Participant pursuant to the provisions of Section 7.5(b), for a period of twelve months from the date of the Participant’s death or until the expiration of the stated period of the Stock Option or SAR, whichever period is the shorter (to the extent that the provisions of this Section 18.2(a) cause Incentive Stock Options to fail to comply with the provisions of Code Section 422, such Stock Options shall be deemed to be Non-Qualified Stock Options); and

(b) All vesting restrictions and conditions on that Participant’s outstanding Restricted Shares that are not Performance Awards or Qualified Performance-Based Awards shall immediately lapse and such Restricted Shares shall be fully vested.

Any rights of a Participant following his or her termination of Service by reason of Disability with respect to his or her outstanding Restricted Stock Units, Performance Awards, Qualified Performance-Based Awards (other than Stock Options and SARs) and Other Stock-Based Awards shall be set forth in the applicable Award Agreement.

18.3 Retirement. Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, if a Participant’s Service terminates by reason of his or her Retirement:

(a) The Participant’s outstanding Stock Options and Stock Appreciation Rights that are not Performance Awards will cease vesting but, solely to the extent exercisable at the time of the Participant’s Retirement, may thereafter be exercised until the expiration of the stated period of the Stock Option or SAR;

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provided, however, that if the Participant dies after such termination of Service, any unexercised Stock Option or SAR may thereafter be exercised by the legal representative of the Participant’s estate or by the beneficiary, if any, designated by the Participant pursuant to the provisions of Section 7.5(b), for a period of twelve months from the date of the Participant’s death or until the expiration of the stated period of the Stock Option or SAR, whichever period is the shorter (to the extent that the provisions of this Section 18.3(a) cause Incentive Stock Options to fail to comply with the provisions of Code Section 422, such Stock Options shall be deemed to be Non-Qualified Stock Options);

(b) If the Participant has attained the age of 60 at the time of his or her Retirement, all vesting restrictions and conditions on that Participant’s outstanding Restricted Shares that are not Performance Awards or Qualified Performance-Based Awards shall immediately lapse and such Restricted Shares shall be fully vested; and

(c) If the Participant has not yet attained the age of 60 at the time of his or her Retirement, that Participant’s outstanding Restricted Shares that are not Performance Awards or Qualified Performance-Based Awards shall not be forfeited, but all time-based vesting conditions and restrictions on such Restricted Shares shall continue in accordance with their terms, or until the Participant’s death or Disability, in which case the provisions of Section 18.1 or Section 18.2, as applicable, shall apply.

Any rights of a Participant following his or her Retirement with respect to outstanding Restricted Stock Units, Performance Awards, Qualified Performance-Based Awards (other than Stock Options and SARs) and Other Stock-Based Awards shall be set forth in the applicable Award Agreement.

18.4 Other. Unless otherwise determined by the Committee and set forth in the applicable Award Agreement, if a Participant’s Service terminates for any reason other than death, Disability or Retirement, the Participant’s Awards shall thereupon terminate and be forfeited.

18.5 Transfer; Leave of Absence.

(a) Transfer. For purposes of the Plan, a transfer of an employee Participant from the Company to an Affiliate, or vice versa, or from one Affiliate to another shall not be deemed a termination of Service by the Participant.

(b) Leave of Absence. Unless otherwise determined by the Committee, a leave of absence by an employee Participant, duly authorized in writing by the Company or an Affiliate, shall not be deemed a termination of Service by the Participant for purposes of the Plan.

18.6 Acceleration For Any Other Reason. Regardless of whether an event has occurred as described in Sections 18.1, 18.2 and 18.3 above, and subject to the provisions of Section 13 with respect to Qualified Performance-Based Awards, the Committee may in its sole discretion at any time determine that all or a portion of a Participant’s Stock Options, Stock Appreciation Rights and other Awards in the nature of rights that may be exercised shall become fully or partially exercisable, that all or a part of any time-based or Service-based vesting conditions on all or a portion of any outstanding Awards shall lapse, or that any performance-based conditions with respect to any Awards shall be deemed to be wholly or partially satisfied, in each case, as of such date as the Committee may, in its sole discretion, determine. The Committee may discriminate among Participants and among Awards granted to a Participant in exercising its discretion pursuant to this Section 18.6. Notwithstanding any other provision of the Plan, including this Section 18.6, the Committee may not accelerate the payment of any Award if such acceleration would fail to comply with Code Section 409A(a)(3).

Section 19. Adjustments for Changes in Capitalization

19.1 Mandatory Adjustments. In the event of an “equity restructuring” (as such term is defined in Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation — Stock Compensation”), including any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend, the authorization limits under Sections 5.1, 5.2 and 5.6 shall be adjusted proportionately, and the Committee shall make such adjustments to the Plan and outstanding Awards as it deems necessary or appropriate, in its sole discretion, to prevent dilution or enlargement of benefits or potential benefits intended to be made available under the Plan, including: (a) adjustment of the number and kind of shares or securities that may be issued under the Plan; (b) adjustment of the number and kind of shares or securities subject to outstanding Awards; (c) adjustment of

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the Exercise Price of outstanding Stock Options and Stock Appreciation Rights or the measure to be used to determine the amount of the benefit payable on an Award; (d) adjustment to market price-based performance goals or performance goals set on a per-Share basis; and (e) any other adjustments that the Committee determines to be equitable. Notwithstanding the foregoing, the Committee shall not make any adjustments to outstanding Stock Options or SARs to the extent that it causes such Stock Options or SARs to provide for a deferral of compensation subject to Code Section 409A. Without limiting the foregoing, in the event of a subdivision of the outstanding Common Stock (a stock split), a dividend payable in Shares, or a combination or consolidation of the outstanding Common Stock into a lesser number of Shares, the authorization limits under Sections 5.1, 5.2 and 5.6 shall automatically be adjusted proportionately, and the Shares then subject to each outstanding Award shall automatically, without the necessity for any additional action by the Committee, be adjusted proportionately without any change in the aggregate Exercise Price therefor.

19.2 Discretionary Adjustments. Upon the occurrence or in anticipation of any share combination, exchange or reclassification, recapitalization, merger, consolidation or other corporate reorganization affecting the Common Stock, or any transaction described in Section 19.1, in addition to any of the actions described in Section 19.1, the Committee may, in its sole discretion, provide: (a) that Awards will be settled in cash rather than Shares; (b) that Awards will become immediately vested and exercisable and will expire after a designated period of time to the extent not then exercised; (c) that Awards will be equitably converted, adjusted or substituted in connection with such transaction; (d) that outstanding Awards may be settled by payment in cash or cash equivalents equal to the excess of the Fair Market Value of the underlying Shares as of a specified date associated with the transaction, over the Exercise Price of the Award; (e) that performance targets and Performance Periods for Performance Awards and Qualified Performance-Based Awards will be modified, consistent with Code Section 162(m) where applicable; or (f) any combination of the foregoing. The Committee’s determination need not be uniform and may be different for different Participants whether or not such Participants are similarly situated.

19.3 No Fractional Shares, etc.. After giving effect to any adjustment pursuant to the provisions of this Section 19, the number of Shares subject to any Award denominated in whole Shares shall always be a whole number, unless otherwise determined by the Committee. Any discretionary adjustments made pursuant to the provisions of this Section 19 shall be subject to the provisions of Section 22. To the extent any adjustments made pursuant to this Section 19 cause Incentive Stock Options to cease to qualify as Incentive Stock Options, such Stock Options shall be deemed to be Non-Qualified Stock Options.

Section 20. Change of Control

20.1 Definition. For purposes of the Plan, the term “Change of Control” means the occurrence of any of the following on or after the Effective Date:

(a) Any “person” (as such term is used in Sections 13(d) and 14 of the Exchange Act), other than (1) the Company, (2) any subsidiary of the Company, (3) any employee benefit plan (or a trust forming a part thereof) maintained by the Company or any subsidiary of the Company, (4) any underwriter temporarily holding securities of the Company pursuant to an offering of such securities or (5) any person in connection with a transaction described in clauses (1), (2) and (3) of Section 20.1(b) below, becomes the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing 30% or more of the total voting power of the Company’s then outstanding voting securities, unless such securities (or, if applicable, securities that are being converted into voting securities) are acquired directly from the Company in a transaction approved by a majority of the Incumbent Board (as defined in Section 20.1(d) below).

(b) The consummation of a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, or the sale or other disposition, in one transaction or a series of transactions, of all or substantially all of the assets of the Company (a “Corporate Transaction”), unless:

(1) the stockholders of the Company immediately before such Corporate Transaction will own, directly or indirectly, immediately following such Corporate Transaction, at least 60% of the total voting power of the outstanding voting securities of the corporation or other entity resulting from such Corporate Transaction (including a corporation or other entity that acquires all or substantially all of the Company’s assets, the “Surviving Company”) or the ultimate parent company thereof in substantially the same proportion as their ownership of the voting securities of the Company immediately before such Corporate Transaction;

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(2) the individuals who were members of the Board of Directors immediately prior to the execution of the agreement providing for such Corporate Transaction constitute a majority of the members of the board of directors or equivalent governing body of the Surviving Company or the ultimate parent company thereof; and

(3) no person, other than (A) the Company, (B) any subsidiary of the Company, (C) any employee benefit plan (or a trust forming a part thereof) maintained by the Company or any subsidiary of the Company, (D) the Surviving Company, (E) any subsidiary or parent company of the Surviving Company, or (F) any person who, immediately prior to such Corporate Transaction, was the beneficial owner of securities of the Company representing 30% or more of the total voting power of the Company’s then outstanding voting securities, is the beneficial owner of 30% or more of the total voting power of the then outstanding voting securities of the Surviving Company or the ultimate parent company thereof.

(c) The stockholders of the Company approve a complete liquidation or dissolution of the Company.

(d) Directors who, as of the Effective Date, constitute the Board of Directors (the “Incumbent Board”), cease to constitute at least a majority of the Board of Directors (or, in the event of any merger, consolidation or reorganization the principal purpose of which is to change the Company’s state of incorporation, form a holding company or effect a similar reorganization as to form, the board of directors of such surviving company or its ultimate parent company); provided, however, that any individual becoming a member of the Board of Directors subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened proxy contest relating to the election of directors.

Notwithstanding the foregoing, a Change of Control will not be deemed to occur solely because any person (a “Subject Person”) becomes the beneficial owner of more than the permitted amount of the outstanding voting securities of the Company as a result of the acquisition of voting securities by the Company which, by reducing the number of voting securities outstanding, increases the proportional number of voting securities beneficially owned by the Subject Person, provided, that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such acquisition by the Company, the Subject Person becomes the beneficial owner of any additional voting securities that increases the percentage of the then outstanding voting securities beneficially owned by the Subject Person to 30% or more of the total voting power, then a Change of Control will have occurred.

20.2 Effect of Change of Control. Notwithstanding any other provision of the Plan, unless otherwise determined by the Committee and set forth in the applicable Award Agreement, the provisions of this Section 20.2 shall apply to the types of Awards specified in subsections (a) and (b) below in the event of a Change of Control.

(a) Stock Options and SARs. In the event of a Change of Control, all outstanding Stock Options and Stock Appreciation Rights that are not Performance Awards shall become fully vested and immediately exercisable. To the extent that the provisions of this Section 20.2(a) cause Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Stock Options shall be deemed to be Non-Qualified Stock Options.

(b) Restricted Shares. In the event of a Change of Control as described in Section 20.1(b), as shall be determined by the Committee: (1) any outstanding and unvested Restricted Shares that are not Performance Awards or Qualified Performance-Based Awards shall be canceled and the Company shall make a cash payment to those Participants in an amount equal to the highest price per Share received by the holders of Common Stock in connection with such Change of Control multiplied by the number of such unvested Restricted Shares then held by such Participant, with any non-cash consideration to be valued in good faith by the Committee; or (2) all vesting restrictions and conditions with respect to all outstanding Restricted Shares that are not Performance Awards or Qualified Performance-Based Awards shall immediately lapse and such Restricted Shares shall be fully vested. In the event of a Change of Control as described in Section 20.1(a), (c) or (d), all vesting restrictions and conditions with respect to all outstanding Restricted Shares that are not Performance Awards or Qualified Performance-Based Awards shall immediately lapse and such Restricted Shares shall be fully vested.

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(c) Other Awards. Any rights of a Participant in connection with a Change of Control with respect to Restricted Stock Units, Performance Awards, Qualified Performance-Based Awards (other than Stock Options and Stock Appreciation Rights) and Other Stock-Based Awards shall be set forth in the applicable Award Agreement.

20.3 Excise Taxes. In the event that any acceleration of vesting pursuant to an Award and any other payment or benefit received or to be received by a Participant under the Plan in connection with a Change of Control would subject a Participant to any excise tax pursuant to Code Section 4999 (which excise tax would be the Participant’s obligation) due to the characterization of such acceleration of vesting, payment or benefit as an “excess parachute payment” under Code Section 280G, the Participant may elect, in his or her sole discretion, to reduce the amount of any acceleration of vesting, payment or benefit called for under an Award in order to avoid such characterization.

Section 21. Repricing Prohibited

Except as contemplated by the provisions of Section 19, outstanding Stock Options and Stock Appreciation Rights will not be “repriced” for any reason without the prior approval of the Company’s stockholders. For purposes of the Plan, a “repricing” means lowering the Exercise Price of an outstanding Stock Option or SAR or any other action that has the same effect or is treated as a repricing under generally accepted accounting principles, and includes a tandem cancellation of a Stock Option or SAR at a time when its Exercise Price exceeds the fair market value of the underlying Common Stock and exchange for another Stock Option, SAR, other Award, other equity security or a cash payment.

Section 22. Amendment and Termination

22.1 Amendment or Termination of the Plan. The Board of Directors or the Committee may amend, modify, suspend, discontinue or terminate the Plan or any portion of the Plan at any time; provided, however, any amendment or modification that (a) increases the total number of Shares available for issuance pursuant to Awards granted under the Plan (except as contemplated by the provisions of Section 19), (b) deletes or limits the provision of Section 21 (repricing prohibition), or (c) requires the approval of the Company’s stockholders pursuant to any applicable law, regulation or securities exchange rule or listing requirement, shall be subject to approval by the Company’s stockholders. Subject to the provisions of Section 22.3, no amendment, modification, suspension, discontinuance or termination of the Plan shall impair the rights of any Participant under any Award previously granted under the Plan without such Participant’s consent, provided that such consent shall not be required with respect to any Plan amendment, modification or other such action if the Committee determines in its sole discretion that such amendment, modification or other such action is not reasonably likely to significantly reduce or diminish the benefits provided to the Participant under such Award.

22.2 Awards Previously Granted. The Committee may waive any conditions or restrictions under, amend or modify the terms and conditions of, or cancel or terminate any outstanding Award at any time and from time to time; provided, however, subject to the provisions of Section 22.3 and the provisions of the applicable Award Agreement, no such amendment, modification, cancellation or termination shall impair the rights of a Participant under an Award without such Participant’s consent, provided that such consent shall not be required with respect to any amendment, modification or other such action if the Committee determines in its sole discretion that such amendment, modification or other such action is not reasonably likely to significantly reduce or diminish the benefits provided to the Participant under such Award.

22.3 Compliance Amendments. Notwithstanding any other provision of the Plan or any Award Agreement to the contrary, the Committee may, in its sole discretion and without the consent of any Participant, amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as it deems necessary or advisable in order for the Company, the Plan, an Award or an Award Agreement to satisfy or conform to any applicable present or future law, regulation or rule or to meet the requirements of any accounting standard.

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Section 23. Foreign Jurisdictions

Awards granted to Participants who are foreign nationals or who are employed by the Company or an Affiliate outside of the United States may have such terms and conditions different from those specified in the Plan and such additional terms and conditions as the Committee, in its sole discretion, determines to be necessary, appropriate or advisable to foster and promote achievement of the material purposes of the Plan and to fairly accommodate for differences in local law, tax policy or custom or to facilitate administration of the Plan. The Committee may approve such sub-plans, appendices or supplements to, or amendments, restatements or alternative versions of, the Plan as it may consider necessary, appropriate or advisable, without thereby affecting the terms of the Plan as in effect for any other purpose. The special terms and any appendices, supplements, amendments, restatements or alternative versions, however, shall not include any provisions that are inconsistent with the terms of the Plan as then in effect, unless the Plan could have been amended to eliminate such inconsistency without further approval by the Company’s stockholders.

Section 24. General

24.1 No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall preclude or limit the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.

24.2 Treatment for Other Compensation Purposes. The amount of any compensation received or deemed to be received by a Participant pursuant to an Award shall not be deemed part of a Participant’s regular, recurring compensation for purposes of any termination, indemnity or severance pay laws, and shall not be included in or have any effect on the determination of benefits under any other compensation or benefit plan, program or arrangement of the Company or an Affiliate, including any pension or severance benefits plan, unless expressly provided by the terms of any such plan, program or arrangement.

24.3 No Trust or Fund. The Plan is intended to constitute an “unfunded” plan. Nothing contained herein or in any Award Agreement shall (a) require the Company to segregate any monies, other property or Shares, create any trusts, or to make any special deposits for any amounts payable to any Participant or other person, or (b) be construed as creating in respect of any Participant or any other person any equity or other interest of any kind in any assets of the Company or an Affiliate or creating a trust of any kind or a fiduciary relationship of any kind between the Company or any Affiliate and a Participant or any other person. Prior to the payment or settlement of any Award, nothing contained herein or in any Award Agreement shall give any Participant or any other person any rights that are greater than those of a general unsecured creditor of the Company or an Affiliate.

24.4 Use of Proceeds. All proceeds received by the Company pursuant to Awards granted under the Plan shall be used for general corporate purposes.

24.5 No Limitations on Corporate Action. Neither the Plan, the grant of any Award nor any Award Agreement shall limit, impair or otherwise affect the right or power of the Company or any of its Affiliates to make adjustments, reclassifications, reorganizations or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.

24.6 No Stockholder Rights. Subject to the provisions of the Plan and the applicable Award Agreement, no Participant shall have any rights as a stockholder with respect to any Shares to be issued under the Plan prior to the issuance thereof.

24.7 Prohibition on Loans. The Company shall not loan funds to any Participant for the purpose of paying the Exercise Price associated with any Stock Option or Stock Appreciation Right or for the purpose of paying any taxes associated with the grant, exercise, lapse of restriction, vesting, distribution, payment or other taxable event involving an Award or the Plan.

24.8 No Obligation to Exercise Awards; No Right to Notice of Expiration Date. An Award of a Stock Option or a Stock Appreciation Right imposes no obligation upon the Participant to exercise the Award. The Company, its Affiliates and the Committee have no obligation to inform a Participant of the date on which a Stock Option or SAR is no longer exercisable except in the Award Agreement.

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24.9 Compliance with Section 16(b). With respect to Participants who are Reporting Persons, all transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3. All transactions under the Plan involving Reporting Persons are subject to such conditions, regardless of whether the conditions are expressly set forth in the Plan. Any provision of the Plan that is contrary to a condition of Rule 16b-3 shall not apply to such Reporting Persons.

24.10 Code Section 409A Compliance. Notwithstanding anything contained in the Plan or in any Award Agreement to the contrary, the Plan and all Awards hereunder are intended to satisfy the requirements of Code Section 409A so as to avoid the imposition of any additional taxes or penalties thereunder, and all terms, conditions and provisions of the Plan and an Award Agreement shall be interpreted and applied in a manner consistent with this intent. If the Committee determines that an Award, Award Agreement, payment, distribution, transaction, or any other action or arrangement contemplated by the provisions of the Plan or an Award Agreement would, if undertaken, cause a Participant to become subject to any additional taxes or penalties under Code Section 409A, such Award, Award Agreement, payment, distribution, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan or Award Agreement will be deemed modified or, if necessary, suspended in order to comply with the requirements of Code Section 409A to the extent determined appropriate by the Committee in its sole discretion, in each case without the consent of or notice to the Participant.

24.11 Governing Law. Except as to matters governed by United States federal law or the Delaware General Corporation Law, the Plan, all Award Agreements and all determinations made and actions taken under the Plan and any Award Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles.

24.12 Plan Controls. In the event of any conflict or inconsistency between the Plan and any Award Agreement, the provisions of the Plan shall govern and the Award Agreement shall be interpreted to minimize or eliminate any such conflict or inconsistency.

24.13 Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

24.14 Successors. The Plan shall be binding upon the Company and its successors and assigns, and the Participant and the Participant’s legal representatives and beneficiaries.

Adopted September 27, 2010

Amended September 23, 2013

Amended July 16, 2017

Amended September 25, 2017

21

EX-12.1

EXHIBIT 12.1

FEDEX CORPORATION

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(UNAUDITED)

(IN MILLIONS, EXCEPT RATIOS)

	Six Months Ended
	November 30,				Year Ended May 31,
	2017		2016		2017		2016		2015		2014		2013
Earnings:
Income before income taxes	$	2,121	$	2,220	$	4,579	$	2,740	$	1,627	$	3,658	$	4,338
Add back:
Interest expense, net of capitalized interest		257		242		502		336		235		160		82
Amortization of debt issuance costs		2		6		11		8		5		4		5
Portion of rent expense representative of    interest factor		600		489		1,182		924		908		876		864
Earnings as adjusted	$	2,980	$	2,957	$	6,274	$	4,008	$	2,775	$	4,698	$	5,289
Fixed Charges:
Interest expense, net of capitalized interest	$	257	$	242	$	502	$	336	$	235	$	160	$	82
Capitalized interest		31		21		41		42		37		29		45
Amortization of debt issuance costs		2		6		11		8		5		4		5
Portion of rent expense representative of    interest factor		600		489		1,182		924		908		876		864
	$	890	$	758	$	1,736	$	1,310	$	1,185	$	1,069	$	996
Ratio of Earnings to Fixed Charges		3.3		3.9		3.6		3.1		2.3		4.4		5.3

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, 333-45037, 333-34934, 333-100572, 333-111399, 333-121418, 333-130619, and 333-156333 and Form S-3 No. 333-207036) of FedEx Corporation and in the related Prospectuses of our report dated December 20, 2017, relating to the unaudited condensed consolidated interim financial statements of FedEx Corporation that are included in its Form 10-Q for the quarter ended November 30, 2017.

/s/ Ernst & Young LLP

Memphis, Tennessee

December 20, 2017

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: December 20, 2017

/s/ Frederick W. Smith

Frederick W. Smith

Chairman 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: December 20, 2017

/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 November 30, 2017 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: December 20, 2017

/s/ Frederick W. Smith

Frederick W. Smith

Chairman 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 November 30, 2017 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: December 20, 2017

/s/ Alan B. Graf, Jr.

Alan B. Graf, Jr.

Executive Vice President and

Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Nov. 30, 2017	Dec. 18, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Nov. 30, 2017
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Entity Registrant Name	FedEx Corporation
Entity Central Index Key	0001048911
Current Fiscal Year End Date	--05-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		267,889,623
Trading Symbol	FDX

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Nov. 30, 2017	May 31, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 2,768	$ 3,969
Receivables, less allowances of $353 and $252	8,655	7,599
Spare parts, supplies and fuel, less allowances of $248 and $237	533	514
Prepaid expenses and other	925	546
Total current assets	12,881	12,628
PROPERTY AND EQUIPMENT, AT COST	53,240	50,626
Less accumulated depreciation and amortization	25,950	24,645
Net property and equipment	27,290	25,981
OTHER LONG-TERM ASSETS
Goodwill	7,325	7,154
Other assets	2,785	2,789
Total other long-term assets	10,110	9,943
ASSETS	50,281	48,552
CURRENT LIABILITIES
Short-term borrowings	250
Current portion of long-term debt	11	22
Accrued salaries and employee benefits	1,912	1,914
Accounts payable	3,147	2,752
Accrued expenses	2,907	3,230
Total current liabilities	8,227	7,918
LONG-TERM DEBT, LESS CURRENT PORTION	15,180	14,909
OTHER LONG-TERM LIABILITIES
Deferred income taxes	3,088	2,485
Pension, postretirement healthcare and other benefit obligations	3,868	4,487
Self-insurance accruals	1,651	1,494
Deferred lease obligations	633	531
Deferred gains, principally related to aircraft transactions	122	137
Other liabilities	457	518
Total other long-term liabilities	9,819	9,652
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS' INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of November 30, 2017 and May 31, 2017	32	32
Additional paid-in capital	3,055	3,005
Retained earnings	21,785	20,833
Accumulated other comprehensive loss	(434)	(415)
Treasury stock, at cost	(7,383)	(7,382)
Total common stockholders’ investment	17,055	16,073
LIABILITIES AND STOCKHOLDERS' INVESTMENT	$ 50,281	$ 48,552

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Nov. 30, 2017	May 31, 2017
CURRENT ASSETS
Allowances for receivables	$ 353	$ 252
Allowances for spare parts, supplies and fuel	$ 248	$ 237
COMMON STOCKHOLDERS' INVESTMENT
Common stock, par value	$ 0.10	$ 0.10
Common stock, shares authorized	800,000,000	800,000,000
Common stock, shares issued	318,000,000	318,000,000

XML

Condensed Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Income Statement [Abstract]
REVENUES	$ 16,313	$ 14,931	$ 31,610	$ 29,594
OPERATING EXPENSES:
Salaries and employee benefits	5,742	5,353	11,260	10,664
Purchased transportation	3,840	3,431	7,285	6,671
Rentals and landing fees	835	802	1,653	1,592
Depreciation and amortization	756	740	1,507	1,479
Fuel	818	658	1,521	1,308
Maintenance and repairs	665	579	1,340	1,177
Other	2,395	2,201	4,665	4,272
OPERATING EXPENSES	15,051	13,764	29,231	27,163
OPERATING INCOME	1,262	1,167	2,379	2,431
OTHER INCOME (EXPENSE):
Interest, net	(124)	(119)	(238)	(232)
Other, net	1	30	(20)	21
OTHER INCOME (EXPENSE)	(123)	(89)	(258)	(211)
INCOME BEFORE INCOME TAXES	1,139	1,078	2,121	2,220
PROVISION FOR INCOME TAXES	364	378	750	805
NET INCOME	$ 775	$ 700	$ 1,371	$ 1,415
EARNINGS PER COMMON SHARE:
Basic	$ 2.89	$ 2.63	$ 5.12	$ 5.32
Diluted	2.84	2.59	5.03	5.24
DIVIDENDS DECLARED PER COMMON SHARE	$ 0.50	$ 0.40	$ 1.50	$ 1.20

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]
NET INCOME	$ 775	$ 700	$ 1,371	$ 1,415
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax of $7, $21, $18, and $16	(90)	(230)	19	(218)
Amortization of prior service credit, net of tax of $11, $11, $22, and $22	(19)	(19)	(38)	(38)
Other comprehensive income (loss)	(109)	(249)	(19)	(256)
COMPREHENSIVE INCOME	$ 666	$ 451	$ 1,352	$ 1,159

XML

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Other Comprehensive Income, Tax Amounts
Foreign currency translation adjustments, tax expense (benefit)	$ (7)	$ 21	$ 18	$ 16
Amortization of prior service credit, tax benefit	$ 11	$ 11	$ 22	$ 22

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016
Operating Activities:
Net income	$ 1,371	$ 1,415
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	1,507	1,479
Provision for uncollectible accounts	116	76
Stock-based compensation	103	93
Deferred income taxes and other noncash items	327	320
Gain from sale of investment		(35)
Changes in assets and liabilities:
Receivables	(983)	(513)
Other assets	(338)	(250)
Accounts payable and other liabilities	(564)	67
Other, net	(41)	(17)
Cash provided by operating activities	1,498	2,635
Investing Activities:
Capital expenditures	(2,621)	(2,681)
Business acquisitions, net of cash acquired	(44)
Proceeds from asset dispositions and other	12	100
Cash used in investing activities	(2,653)	(2,581)
Financing Activities:
Proceeds from short-term borrowings	250
Principal payments on debt	(28)	(43)
Proceeds from stock issuances	205	164
Dividends paid	(268)	(213)
Purchase of treasury stock	(270)	(334)
Other, net	3	(5)
Cash used in financing activities	(108)	(431)
Effect of exchange rate changes on cash	62	(98)
Net decrease in cash and cash equivalents	(1,201)	(475)
Cash and cash equivalents at beginning of period	3,969	3,534
Cash and cash equivalents at end of period	$ 2,768	$ 3,059

XML

General

6 Months Ended

Nov. 30, 2017

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, 2017  (“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 November 30, 2017, the results of our operations for the three- and six-month periods ended November 30, 2017 and 2016, and cash flows for the six-month periods ended November 30, 2017 and 2016. Operating results for the three- and six-month periods ended November 30, 2017 are not necessarily indicative of the results that may be expected for the year ending May 31, 2018.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2018 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

BUSINESS ACQUISITION. On October 13, 2017, FedEx acquired Northwest Research, Inc., a leader in inventory research and management, for $50 million in cash from operations. The majority of the purchase price was allocated to property, plant and equipment. The financial results of this acquired business are included in the FedEx Corporate Services, Inc. (“FedEx Services”) segment from the date of acquisition and were not material to our results of operations. Therefore, pro forma financial information has not been provided.

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. The pilots of Federal Express Corporation (“FedEx Express”), who represent a small number of its total employees, are employed under a collective bargaining agreement that took effect on November 2, 2015. This collective bargaining agreement is scheduled to become amendable in November 2021, after a six-year term. In addition to our pilots at FedEx Express, FedEx Supply Chain Distribution System, Inc. (“FedEx Supply Chain”) has a small number of employees who are members of unions, and 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 $41 million for the three-month period ended November 30, 2017 and $103 million for the six-month period ended November 30, 2017. Our stock-based compensation expense was $36 million for the three-month period ended November 30, 2016 and $93 million for the six-month period ended November 30, 2016. 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. We believe the following new accounting guidance is relevant to the readers of our financial statements.

During the first quarter of 2018, we early adopted the Accounting Standards Update issued by the Financial Accounting Standards Board (“FASB”) related to Intra-Entity Transfers of Assets Other Than Inventory. This update requires companies to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs, as opposed to when the assets are ultimately sold to an outside party. This new guidance had a minimal impact on our accounting and financial reporting for the second quarter and first half of 2018.

On May 28, 2014, the FASB and International Accounting Standards Board issued a new accounting standard that will supersede virtually all existing revenue recognition guidance under generally accepted accounting principles in the United States. This standard will be effective for us beginning June 1, 2018 (fiscal 2019). The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided. The new guidance establishes a five-step approach for the recognition of revenue. We are continuing to complete the assessment of the impact this new standard will have on our consolidated financial statements and related disclosures, including ongoing contract reviews. We do not anticipate that the new guidance will have a material impact on our revenue recognition policies, practices or systems.

On February 25, 2016, the FASB issued a new lease accounting standard which requires lessees to put most leases on their balance sheets but recognize the expenses in their income statements in a manner similar to current practice. The new standard states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Expenses related to leases determined to be operating leases will be recognized on a straight-line basis, while those determined to be financing leases will be recognized following a front-loaded expense profile in which interest and amortization are presented separately in the income statement. Based on our lease portfolio, we currently anticipate recognizing a lease liability and related right-of-use asset on the balance sheet in excess of $13 billion with an immaterial impact on our income statement compared to the current lease accounting model. However, the ultimate impact of the standard will depend on the company’s lease portfolio as of the adoption date. We are currently in the process of evaluating our existing lease portfolios, including accumulating all of the necessary information required to properly account for the leases under the new standard. Additionally, we are implementing an enterprise-wide lease management system to assist in the accounting and are evaluating additional changes to our processes and internal controls to ensure we meet the standard’s reporting and disclosure requirements. These changes will be effective for our fiscal year beginning June 1, 2019 (fiscal 2020), with a modified retrospective adoption method to the beginning of 2018.

In March 2017, the FASB issued an Accounting Standards Update that changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. This new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component outside of income from operations. This standard will impact our operating income but will have no impact on our net income or earnings per share. For example, adoption of this guidance would have reduced operating income by $146 million in the second quarter and $292 million in the first half of 2018, and by $112 million in the second quarter and $224 million in the first half of 2017, but would not have impacted our net income in these periods. This new guidance will be effective for our fiscal year beginning June 1, 2018 (fiscal 2019) and will be applied retrospectively.

TREASURY SHARES. In January 2016, our Board of Directors authorized a share repurchase program of up to 25 million shares. Shares under the current repurchase program may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx common stock and general market conditions. No time limit was set for the completion of the program, and the program may be suspended or discontinued at any time.

During the second quarter of 2018, we repurchased 0.8 million shares of FedEx common stock at an average price of $220.67 per share for a total of $184 million. During the first half of 2018, we repurchased 1.2 million shares of FedEx common stock at an average price of $216.45 per share for a total of $270 million. As of November 30, 2017, 14.8 million shares remained under the share repurchase authorization.

DIVIDENDS DECLARED PER COMMON SHARE. On November 17, 2017, our Board of Directors declared a quarterly dividend of $0.50 per share of common stock. The dividend will be paid on January 2, 2018 to stockholders of record as of the close of business on December 11, 2017. 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

Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Nov. 30, 2017

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 unaudited condensed consolidated financial statements for the periods ended November 30 (in millions; amounts in parentheses indicate debits to AOCI):

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Foreign currency translation loss:
Balance at beginning of period	$	(576	)	$	(502	)	$	(685	)	$	(514	)
Translation adjustments		(90	)		(230	)		19			(218	)
Balance at end of period		(666	)		(732	)		(666	)		(732	)
Retirement plans adjustments:
Balance at beginning of period		251			326			270			345
Reclassifications from AOCI		(19	)		(19	)		(38	)		(38	)
Balance at end of period		232			307			232			307
Accumulated other comprehensive (loss) at end of period	$	(434	)	$	(425	)	$	(434	)	$	(425	)

The following table presents details of the reclassifications from AOCI for the periods ended November 30 (in millions; amounts in parentheses indicate debits to earnings):

	Amount Reclassified from AOCI												Affected Line Item in the Income Statement
	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Amortization of retirement plans    prior service credits, before tax	$	30		$	30		$	60		$	60		Salaries and employee benefits
Income tax benefit		(11	)		(11	)		(22	)		(22	)	Provision for income taxes
AOCI reclassifications, net of tax	$	19		$	19		$	38		$	38		Net income

XML

Financing Arrangements

6 Months Ended

Nov. 30, 2017

Debt And Capital Lease Obligations [Abstract]

Financing Arrangements

(3) Financing Arrangements

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

We have a five-year $1.75 billion revolving credit facility that expires in November 2020. The facility, which includes a $500 million letter of credit sublimit, is available to finance our operations and other cash flow needs. The agreement contains a financial covenant, which requires us to maintain a ratio of debt to consolidated earnings (excluding non-cash pension mark-to-market adjustments and non-cash asset impairment charges) before interest, taxes, depreciation and amortization (“adjusted EBITDA”) of not more than 3.5 to 1.0, calculated as of the end of the applicable quarter on a rolling four-quarters basis. The ratio of our debt to adjusted EBITDA was 1.9 to 1.0 at November 30, 2017. We believe this covenant is the 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 financial 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.

During the second quarter of 2018, we issued $250 million of commercial paper, providing us with additional short-term liquidity flexibility. Our commercial paper program is backed by unused commitments under the revolving credit facility and borrowings under the program reduce the amount available under the credit facility. As of November 30, 2017, $250 million of commercial paper and $255 million in letters of credit were outstanding, leaving $1.245 billion available under the revolving credit facility for future borrowings.

Long-term debt, exclusive of capital leases, had carrying values of $15.1 billion at November 30, 2017 and $14.9 billion at May 31, 2017, compared with estimated fair values of $15.9 billion at November 30, 2017 and $15.5 billion at May 31, 2017. The annualized weighted average interest rate on long-term debt was 3.6% for the six-months ended November 30, 2017. 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.

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Computation of Earnings Per Share

6 Months Ended

Nov. 30, 2017

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 periods ended November 30 was as follows (in millions, except per share amounts):

	Three Months Ended				Six Months Ended
	2017		2016		2017		2016
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	774	$	700	$	1,369	$	1,414
Weighted-average common shares		268		266		268		266
Basic earnings per common share	$	2.89	$	2.63	$	5.12	$	5.32
Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	774	$	700	$	1,369	$	1,414
Weighted-average common shares		268		266		268		266
Dilutive effect of share-based awards		4		4		4		4
Weighted-average diluted shares		272		270		272		270
Diluted earnings per common share	$	2.84	$	2.59	$	5.03	$	5.24
Anti-dilutive options excluded from diluted earnings per    common share		2.9		5.1		3.0		5.1

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

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Retirement Plans

6 Months Ended

Nov. 30, 2017

Compensation And Retirement Disclosure [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 periods ended November 30 were as follows (in millions):

	Three Months Ended				Six Months Ended
	2017		2016		2017		2016
Defined benefit pension plans	$	37	$	58	$	74	$	116
Defined contribution plans		124		112		251		231
Postretirement healthcare plans		18		19		37		38
	$	179	$	189	$	362	$	385

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended November 30 included the following components (in millions):

	Three Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2017			2016			2017			2016			2017		2016
Service cost	$	170		$	160		$	23		$	20		$	9	$	9
Interest cost		278			282			13			11			9		10
Expected return on plan assets		(406	)		(375	)		(11	)		(11	)		—		—
Amortization of prior service credit and other		(29	)		(30	)		(1	)		1			—		—
	$	13		$	37		$	24		$	21		$	18	$	19
	Six Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2017			2016			2017			2016			2017		2016
Service cost	$	340		$	319		$	46		$	41		$	18	$	18
Interest cost		557			564			25			22			19		20
Expected return on plan assets		(812	)		(751	)		(22	)		(21	)		—		—
Amortization of prior service credit and other		(59	)		(59	)		(1	)		1			—		—
	$	26		$	73		$	48		$	43		$	37	$	38

Contributions to our tax-qualified U.S. domestic pension plans for the six-month periods ended November 30 were as follows (in millions):

	2017		2016
Required	$	268	$	250
Voluntary		482		250
	$	750	$	500

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Business Segment Information

6 Months Ended

Nov. 30, 2017

Segment Reporting Disclosure Of Entitys Reportable Segments [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 are FedEx Express, including TNT Express B.V. (“TNT 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 Services, form the core of our reportable segments.

Our reportable segments include the following businesses:

FedEx Express Segment	FedEx Express (express transportation)
	TNT Express (international express transportation, small-package ground delivery and freight transportation)
	FedEx Trade Networks (air and ocean freight forwarding, customs brokerage and cross-border enablement technology and solutions)
FedEx Ground Segment	FedEx Ground (small-package ground delivery)
	FedEx Supply Chain (third-party logistics)
FedEx Freight Segment	FedEx Freight (LTL freight transportation)
	FedEx Custom Critical (time-critical transportation)
FedEx Services Segment	FedEx Services (sales, marketing, information technology, communications, customer service, technical support, billing and collection services and back-office functions)
	FedEx Office (document and business services and package acceptance)

As discussed in our Annual Report, in the first quarter of 2018, we began to report TNT Express as part of the FedEx Express segment. Prior year amounts have been revised to conform to the current year presentation.

FedEx Services Segment

The FedEx Services segment operates combined sales, marketing, administrative and information technology functions 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 and reported in their natural expense line items. The FedEx Services segment includes: FedEx Services, which provides sales, marketing, information technology, communications, customer service, technical support, billing and collection services for U.S. customers of our major business units and certain back-office support to our other companies; and FedEx Office and Print Services, Inc. (“FedEx Office”), which provides an array of document and business services and retail access to our customers for our package transportation businesses.

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. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our businesses.

Eliminations, Corporate and Other

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.

Corporate and other includes corporate headquarters costs for executive officers and certain legal and financial functions, as well as certain other costs and credits not attributed to our core business. These costs are not allocated to the business segments.

The following table provides a reconciliation of reportable segment revenues and operating income to our unaudited condensed consolidated financial statement totals for the periods ended November 30 (in millions):

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Revenues
FedEx Express segment	$	9,354		$	8,642		$	18,006		$	17,102
FedEx Ground segment		4,929			4,419			9,568			8,709
FedEx Freight segment		1,762			1,597			3,514			3,255
FedEx Services segment		416			414			816			809
Eliminations and other		(148	)		(141	)		(294	)		(281	)
	$	16,313		$	14,931		$	31,610		$	29,594
Operating Income
FedEx Express segment	$	717		$	706		$	1,150		$	1,316
FedEx Ground segment		521			465			1,147			1,075
FedEx Freight segment		118			88			294			223
Eliminations, corporate and other		(94	)		(92	)		(212	)		(183	)
	$	1,262		$	1,167		$	2,379		$	2,431

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Commitments

6 Months Ended

Nov. 30, 2017

Commitments [Abstract]

Commitments

(7) Commitments

As of November 30, 2017, our purchase commitments under various contracts for the remainder of 2018 and annually thereafter were as follows (in millions):

	Aircraft and Aircraft-Related		Other(1)		Total
2018 (remainder)	$	870	$	469	$	1,339
2019		1,723		679		2,402
2020		1,965		525		2,490
2021		1,488		386		1,874
2022		1,451		235		1,686
Thereafter		3,334		499		3,833
Total	$	10,831	$	2,793	$	13,624

⁽¹⁾ Primarily equipment and advertising contracts.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of November 30, 2017, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and six 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. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

During the second quarter of 2018, FedEx Express entered into an agreement to purchase 50 Cessna SkyCourier 408 aircraft with options to purchase up to 50 additional Cessna SkyCourier 408 aircraft. The 50 firm-order Cessna SkyCourier 408 aircraft are expected to be delivered from fiscal 2021 through 2024.

During the second quarter of 2018, FedEx Express entered into an agreement to purchase 30 ATR 72-600F aircraft with options to purchase up to 20 additional ATR 72-600F aircraft. The 30 firm-order ATR 72-600F aircraft are expected to be delivered from fiscal 2021 through 2026.

We had $684 million in deposits and progress payments as of November 30, 2017 on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our consolidated balance sheets. 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 November 30, 2017 with the year of expected delivery:

	Cessna SkyCourier 408		ATR 72-600F		B767F		B777F		Total
2018 (remainder)		-		-		8		1		9
2019		-		-		15		2		17
2020		-		-		16		3		19
2021		12		5		10		3		30
2022		12		6		10		4		32
Thereafter		26		19		6		-		51
Total		50		30		65		13		158

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at November 30, 2017 is as follows (in millions):

	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2018 (remainder)	$	335	$	1,113	$	1,448
2019		343		2,014		2,357
2020		261		1,799		2,060
2021		203		1,623		1,826
2022		185		1,464		1,649
Thereafter		175		8,746		8,921
Total	$	1,502	$	16,759	$	18,261

Future minimum lease payments under capital leases were immaterial at November 30, 2017. 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.

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Contingencies

6 Months Ended

Nov. 30, 2017

Loss Contingency [Abstract]

Contingencies

(8) Contingencies

Independent Contractor — Lawsuits and Administrative Proceedings. During the second quarter of 2018, the final objector to the $228 million settlement in the case that was remanded by the multidistrict litigation court to California and appealed to the Ninth Circuit Court of Appeals settled with plaintiffs’ counsel and FedEx Ground paid the settlement amount.

FedEx Ground is involved in lawsuits and administrative proceedings claiming that owner-operators engaged under a contractor model no longer in use should have been treated as employees of FedEx Ground, rather than independent contractors. In addition, we are defending joint-employer cases where it is alleged that FedEx Ground should be treated as an employer of the drivers employed by owner-operators engaged by FedEx Ground. These cases are in varying stages of litigation, and we are not currently able to estimate an amount or range of potential loss in all of these matters. However, we do not expect to incur, individually or in the aggregate, a material loss in these matters. Nevertheless, adverse determinations in matters related to owner-operators engaged by FedEx Ground could, among other things, entitle certain owner-operators to the reimbursement of certain expenses, and their drivers to the benefit of wage-and-hour laws, and result in employment and withholding tax and benefit liability for FedEx Ground. We believe that owner-operators engaged by FedEx Ground are properly classified as independent contractors and that FedEx Ground is not an employer of the drivers employed by these owner-operators.

City and State of New York Cigarette Suit. The City of New York and the State of New York filed two related lawsuits against FedEx Ground in December 2013 and November 2014 arising from FedEx Ground’s alleged shipments of cigarettes to New York residents in contravention of several statutes, including the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and New York’s Public Health Law, as well as common law nuisance claims. In April 2016, the two lawsuits were consolidated and will now proceed as one lawsuit. The first-filed lawsuit alleges that FedEx Ground provided delivery services on behalf of four shippers, and the second-filed lawsuit alleges that FedEx Ground provided delivery services on behalf of six additional shippers; none of these shippers continue to ship in our network. Following motions to dismiss filed in both lawsuits, some of the claims were dismissed entirely or limited. In the first-filed lawsuit, the New York Public Health Law and common law nuisance claims were dismissed and the plaintiffs voluntarily dismissed another claim. In the second-filed lawsuit, the common law nuisance claim was dismissed entirely and the New York Public Health Law claim has been limited to claims arising after September 27, 2013, when an amendment to that law provided enforcement authority to the City of New York and State of New York. Other claims, including the RICO claims, remain in both lawsuits. The likelihood of loss is reasonably possible, but the amount or range of loss, if any, cannot be estimated at this stage of the litigation, but we expect the amount of any loss to be immaterial.

On July 10, 2017, the City of New York and the State of New York filed a third lawsuit against FedEx Ground and included FedEx Freight as a co-defendant. This new case identifies no shippers or shipments, but generally alleges violations of the same laws that are the subject of the other two lawsuits. The amount or range of loss, if any, cannot be estimated at this stage of the lawsuit.

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.

On September 9, 2016, FedEx Supply Chain received a written offer from several District Attorneys’ Offices in California to settle a civil action that the District Attorneys intend to file against FedEx Supply Chain for alleged violations of the state’s hazardous waste regulations. Specifically, the District Attorneys’ Offices allege FedEx Supply Chain unlawfully disposed of hazardous waste at one of its California facilities and caused the illegal transportation and disposal of hazardous waste from the retail stores of a FedEx Supply Chain customer at this same facility. The District Attorneys allege these violations began in 2006 and continued until the facility closed in the spring of 2015. We believe an immaterial loss in this matter is probable, and we will pursue all available remedies against the sellers of GENCO to recover any losses in this matter.

Other Matters. During the third quarter of 2017, FedEx Trade Networks informed U.S. Customs and Border Protection (“CBP”) that in connection with certain customs entries it may have made improper claims for (i) reduced-duty treatment and (ii) duty-free treatment. In the fourth quarter of 2017 we established accruals totaling $39.3 million for the then-current estimated probable loss for these matters. In the first quarter of 2018, FedEx Trade Networks tendered payments to CBP in these matters totaling $46.5 million, and an additional expense of $7.2 million was recognized. CBP acknowledged receipt of the amounts tendered in these matters, and we are awaiting a response indicating whether these matters are fully resolved.

FedEx and its subsidiaries are subject to other legal proceedings that arise in the ordinary course of business, including certain lawsuits containing various class-action allegations of wage-and-hour violations in which plaintiffs claim, 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. 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.

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Supplemental Cash Flow Information

6 Months Ended

Nov. 30, 2017

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

(9) Supplemental Cash Flow Information

Cash paid for interest expense and income taxes for the six-month periods ended November 30 was as follows (in millions):

	2017			2016
Cash payments for:
Interest (net of capitalized interest)	$	238		$	232
Income taxes	$	617		$	216
Income tax refunds received		(19	)		(13	)
Cash tax payments, net	$	598		$	203

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Condensed Consolidating Financial Statements

6 Months Ended

Nov. 30, 2017

Condensed Financial Information Of Parent Company Only Disclosure [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 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 100% owned by FedEx, guarantee $15.0 billion of our long-term 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)

November 30, 2017

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	959	$	342	$	1,495	$	(28	)	$	2,768
Receivables, less allowances		2		5,340		3,441		(128	)		8,655
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		286		931		241		—			1,458
Total current assets		1,247		6,613		5,177		(156	)		12,881
PROPERTY AND EQUIPMENT, AT COST		22		49,585		3,633		—			53,240
Less accumulated depreciation and amortization		18		24,349		1,583		—			25,950
Net property and equipment		4		25,236		2,050		—			27,290
INTERCOMPANY RECEIVABLE		1,175		3,184		—		(4,359	)		—
GOODWILL		—		1,571		5,754		—			7,325
INVESTMENT IN SUBSIDIARIES		29,116		2,903		—		(32,019	)		—
OTHER ASSETS		3,501		1,197		1,297		(3,210	)		2,785
	$	35,043	$	40,704	$	14,278	$	(39,744	)	$	50,281
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings	$	250	$	—	$	—	$	—		$	250
Current portion of long-term debt		—		1		10		—			11
Accrued salaries and employee benefits		59		1,325		528		—			1,912
Accounts payable		153		1,636		1,514		(156	)		3,147
Accrued expenses		451		1,621		835		—			2,907
Total current liabilities		913		4,583		2,887		(156	)		8,227
LONG-TERM DEBT, LESS CURRENT PORTION		14,872		289		19		—			15,180
INTERCOMPANY PAYABLE		—		—		4,359		(4,359	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		6,102		196		(3,210	)		3,088
Other liabilities		2,203		3,642		886		—			6,731
Total other long-term liabilities		2,203		9,744		1,082		(3,210	)		9,819
STOCKHOLDERS’ INVESTMENT		17,055		26,088		5,931		(32,019	)		17,055
	$	35,043	$	40,704	$	14,278	$	(39,744	)	$	50,281

CONDENSED CONSOLIDATING BALANCE SHEETS

May 31, 2017

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,884	$	325	$	1,807	$	(47	)	$	3,969
Receivables, less allowances		3		4,729		2,928		(61	)		7,599
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		25		787		248		—			1,060
Total current assets		1,912		5,841		4,983		(108	)		12,628
PROPERTY AND EQUIPMENT, AT COST		22		47,201		3,403		—			50,626
Less accumulated depreciation and amortization		18		23,211		1,416		—			24,645
Net property and equipment		4		23,990		1,987		—			25,981
INTERCOMPANY RECEIVABLE		1,521		2,607		—		(4,128	)		—
GOODWILL		—		1,571		5,583		—			7,154
INVESTMENT IN SUBSIDIARIES		27,712		2,636		—		(30,348	)		—
OTHER ASSETS		3,494		1,271		1,249		(3,225	)		2,789
	$	34,643	$	37,916	$	13,802	$	(37,809	)	$	48,552
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	—	$	9	$	13	$	—		$	22
Accrued salaries and employee benefits		72		1,335		507		—			1,914
Accounts payable		10		1,411		1,439		(108	)		2,752
Accrued expenses		991		1,522		717		—			3,230
Total current liabilities		1,073		4,277		2,676		(108	)		7,918
LONG-TERM DEBT, LESS CURRENT PORTION		14,641		244		24		—			14,909
INTERCOMPANY PAYABLE		—		—		4,128		(4,128	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		5,472		238		(3,225	)		2,485
Other liabilities		2,856		3,448		863		—			7,167
Total other long-term liabilities		2,856		8,920		1,101		(3,225	)		9,652
STOCKHOLDERS’ INVESTMENT		16,073		24,475		5,873		(30,348	)		16,073
	$	34,643	$	37,916	$	13,802	$	(37,809	)	$	48,552

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	12,044		$	4,362		$	(93	)	$	16,313
OPERATING EXPENSES:
Salaries and employee benefits		35			4,439			1,268			—			5,742
Purchased transportation		—			2,314			1,576			(50	)		3,840
Rentals and landing fees		1			640			197			(3	)		835
Depreciation and amortization		—			649			107			—			756
Fuel		—			746			72			—			818
Maintenance and repairs		—			584			81			—			665
Intercompany charges, net		(95	)		—			95			—			—
Other		59			1,592			784			(40	)		2,395
		—			10,964			4,180			(93	)		15,051
OPERATING INCOME		—			1,080			182			—			1,262
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		775			40			—			(815	)		—
Interest, net		(130	)		11			(5	)		—			(124	)
Intercompany charges, net		132			(71	)		(61	)		—			—
Other, net		(2	)		(8	)		11			—			1
INCOME BEFORE INCOME TAXES		775			1,052			127			(815	)		1,139
Provision for income taxes		—			225			139			—			364
NET INCOME	$	775		$	827		$	(12	)	$	(815	)	$	775
COMPREHENSIVE INCOME	$	756		$	817		$	(92	)	$	(815	)	$	666

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	10,997		$	4,004		$	(70	)	$	14,931
OPERATING EXPENSES:
Salaries and employee benefits		29			4,161			1,163			—			5,353
Purchased transportation		—			2,074			1,383			(26	)		3,431
Rentals and landing fees		2			625			177			(2	)		802
Depreciation and amortization		—			634			106			—			740
Fuel		—			584			74			—			658
Maintenance and repairs		—			504			75			—			579
Intercompany charges, net		(89	)		38			51			—			—
Other		58			1,429			756			(42	)		2,201
		—			10,049			3,785			(70	)		13,764
OPERATING INCOME		—			948			219			—			1,167
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		700			54			—			(754	)		—
Interest, net		(123	)		4			—			—			(119	)
Intercompany charges, net		124			(64	)		(60	)		—			—
Other, net		(1	)		(5	)		36			—			30
INCOME BEFORE INCOME TAXES		700			937			195			(754	)		1,078
Provision for income taxes		—			291			87			—			378
NET INCOME	$	700		$	646		$	108		$	(754	)	$	700
COMPREHENSIVE INCOME	$	682		$	635		$	(112	)	$	(754	)	$	451

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Six Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	23,611		$	8,216		$	(217	)	$	31,610
OPERATING EXPENSES:
Salaries and employee benefits		73			8,666			2,521			—			11,260
Purchased transportation		—			4,377			3,040			(132	)		7,285
Rentals and landing fees		2			1,267			388			(4	)		1,653
Depreciation and amortization		—			1,288			219			—			1,507
Fuel		—			1,383			138			—			1,521
Maintenance and repairs		—			1,186			154			—			1,340
Intercompany charges, net		(211	)		113			98			—			—
Other		136			3,068			1,542			(81	)		4,665
		—			21,348			8,100			(217	)		29,231
OPERATING INCOME		—			2,263			116			—			2,379
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,371			37			—			(1,408	)		—
Interest, net		(259	)		24			(3	)		—			(238	)
Intercompany charges, net		263			(142	)		(121	)		—			—
Other, net		(4	)		(16	)		—			—			(20	)
INCOME BEFORE INCOME TAXES		1,371			2,166			(8	)		(1,408	)		2,121
Provision for income taxes		—			624			126			—			750
NET INCOME	$	1,371		$	1,542		$	(134	)	$	(1,408	)	$	1,371
COMPREHENSIVE INCOME	$	1,334		$	1,536		$	(110	)	$	(1,408	)	$	1,352

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Six Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	21,900		$	7,834		$	(140	)	$	29,594
OPERATING EXPENSES:
Salaries and employee benefits		65			8,267			2,332			—			10,664
Purchased transportation		—			3,991			2,734			(54	)		6,671
Rentals and landing fees		3			1,245			347			(3	)		1,592
Depreciation and amortization		—			1,245			234			—			1,479
Fuel		—			1,162			146			—			1,308
Maintenance and repairs		—			1,030			147			—			1,177
Intercompany charges, net		(179	)		100			79			—			—
Other		111			2,802			1,442			(83	)		4,272
		—			19,842			7,461			(140	)		27,163
OPERATING INCOME		—			2,058			373			—			2,431
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,415			110			—			(1,525	)		—
Interest, net		(245	)		13			—			—			(232	)
Intercompany charges, net		246			(145	)		(101	)		—			—
Other, net		(1	)		(10	)		32			—			21
INCOME BEFORE INCOME TAXES		1,415			2,026			304			(1,525	)		2,220
Provision for income taxes		—			671			134			—			805
NET INCOME	$	1,415		$	1,355		$	170		$	(1,525	)	$	1,415
COMPREHENSIVE INCOME	$	1,378		$	1,337		$	(31	)	$	(1,525	)	$	1,159

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(1,959	)	$	3,504		$	(66	)	$	19		$	1,498
INVESTING ACTIVITIES
Capital expenditures		—			(2,474	)		(147	)		—			(2,621	)
Business acquisitions, net of cash acquired		—			(44	)		—			—			(44	)
Proceeds from asset dispositions and other		—			12			—			—			12
CASH USED IN INVESTING    ACTIVITIES		—			(2,506	)		(147	)		—			(2,653	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		947			(1,019	)		72			—			—
Payment on loan between subsidiaries		167			—			(167	)		—			—
Proceeds from short-term borrowings		250			—			—			—			250
Principal payments on debt		—			(18	)		(10	)		—			(28	)
Proceeds from stock issuances		205			—			—			—			205
Dividends paid		(268	)		—			—			—			(268	)
Purchase of treasury stock		(270	)		—			—			—			(270	)
Other, net		3			—			—			—			3
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		1,034			(1,037	)		(105	)		—			(108	)
Effect of exchange rate changes on cash		—			56			6			—			62
Net (decrease) increase in cash and cash equivalents		(925	)		17			(312	)		19			(1,201	)
Cash and cash equivalents at beginning of period		1,884			325			1,807			(47	)		3,969
Cash and cash equivalents at end of period	$	959		$	342		$	1,495		$	(28	)	$	2,768

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(376	)	$	2,550		$	473		$	(12	)	$	2,635
INVESTING ACTIVITIES
Capital expenditures		—			(2,455	)		(226	)		—			(2,681	)
Proceeds from asset dispositions and other		84			13			3			—			100
CASH USED IN INVESTING ACTIVITIES		84			(2,442	)		(223	)		—			(2,581	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		24			(94	)		70			—			—
Payment on loan between subsidiaries		8			(15	)		7			—			—
Intercompany dividends		—			1			(1	)		—			—
Principal payments on debt		—			(31	)		(12	)		—			(43	)
Proceeds from stock issuances		164			—			—			—			164
Dividends paid		(213	)		—			—			—			(213	)
Purchase of treasury stock		(334	)		—			—			—			(334	)
Other, net		4			(2	)		(7	)		—			(5	)
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		(347	)		(141	)		57			—			(431	)
Effect of exchange rate changes on cash		(5	)		1			(94	)		—			(98	)
Net (decrease) increase in cash and cash equivalents		(644	)		(32	)		213			(12	)		(475	)
Cash and cash equivalents at beginning of period		1,974			326			1,277			(43	)		3,534
Cash and cash equivalents at end of period	$	1,330		$	294		$	1,490		$	(55	)	$	3,059

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General (Policies)

6 Months Ended

Nov. 30, 2017

Accounting 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, 2017  (“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 November 30, 2017, the results of our operations for the three- and six-month periods ended November 30, 2017 and 2016, and cash flows for the six-month periods ended November 30, 2017 and 2016. Operating results for the three- and six-month periods ended November 30, 2017 are not necessarily indicative of the results that may be expected for the year ending May 31, 2018.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2018 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Nov. 30, 2017

Accumulated Other Comprehensive Income Loss Tables [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table provides changes in accumulated other comprehensive income (loss) (“AOCI”), net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended November 30 (in millions; amounts in parentheses indicate debits to AOCI):

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Foreign currency translation loss:
Balance at beginning of period	$	(576	)	$	(502	)	$	(685	)	$	(514	)
Translation adjustments		(90	)		(230	)		19			(218	)
Balance at end of period		(666	)		(732	)		(666	)		(732	)
Retirement plans adjustments:
Balance at beginning of period		251			326			270			345
Reclassifications from AOCI		(19	)		(19	)		(38	)		(38	)
Balance at end of period		232			307			232			307
Accumulated other comprehensive (loss) at end of period	$	(434	)	$	(425	)	$	(434	)	$	(425	)

Reclassification Out of Accumulated Other Comprehensive Income (Loss)

The following table presents details of the reclassifications from AOCI for the periods ended November 30 (in millions; amounts in parentheses indicate debits to earnings):

	Amount Reclassified from AOCI												Affected Line Item in the Income Statement
	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Amortization of retirement plans    prior service credits, before tax	$	30		$	30		$	60		$	60		Salaries and employee benefits
Income tax benefit		(11	)		(11	)		(22	)		(22	)	Provision for income taxes
AOCI reclassifications, net of tax	$	19		$	19		$	38		$	38		Net income

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Computation of Earnings Per Share (Tables)

6 Months Ended

Nov. 30, 2017

Computation Of Earnings Per Share Tables [Abstract]

Schedule of basic and diluted earnings per common share

The calculation of basic and diluted earnings per common share for the periods ended November 30 was as follows (in millions, except per share amounts):

	Three Months Ended				Six Months Ended
	2017		2016		2017		2016
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	774	$	700	$	1,369	$	1,414
Weighted-average common shares		268		266		268		266
Basic earnings per common share	$	2.89	$	2.63	$	5.12	$	5.32
Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	774	$	700	$	1,369	$	1,414
Weighted-average common shares		268		266		268		266
Dilutive effect of share-based awards		4		4		4		4
Weighted-average diluted shares		272		270		272		270
Diluted earnings per common share	$	2.84	$	2.59	$	5.03	$	5.24
Anti-dilutive options excluded from diluted earnings per    common share		2.9		5.1		3.0		5.1

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

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Retirement Plans (Tables)

6 Months Ended

Nov. 30, 2017

Retirement Plan Tables [Abstract]

Schedule of Retirement Plan Costs

Our retirement plans costs for the periods ended November 30 were as follows (in millions):

	Three Months Ended				Six Months Ended
	2017		2016		2017		2016
Defined benefit pension plans	$	37	$	58	$	74	$	116
Defined contribution plans		124		112		251		231
Postretirement healthcare plans		18		19		37		38
	$	179	$	189	$	362	$	385

Schedule of Net Periodic Benefit Cost

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended November 30 included the following components (in millions):

	Three Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2017			2016			2017			2016			2017		2016
Service cost	$	170		$	160		$	23		$	20		$	9	$	9
Interest cost		278			282			13			11			9		10
Expected return on plan assets		(406	)		(375	)		(11	)		(11	)		—		—
Amortization of prior service credit and other		(29	)		(30	)		(1	)		1			—		—
	$	13		$	37		$	24		$	21		$	18	$	19
	Six Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2017			2016			2017			2016			2017		2016
Service cost	$	340		$	319		$	46		$	41		$	18	$	18
Interest cost		557			564			25			22			19		20
Expected return on plan assets		(812	)		(751	)		(22	)		(21	)		—		—
Amortization of prior service credit and other		(59	)		(59	)		(1	)		1			—		—
	$	26		$	73		$	48		$	43		$	37	$	38

Schedule of Tax Qualified Pension Plans Contributions

Contributions to our tax-qualified U.S. domestic pension plans for the six-month periods ended November 30 were as follows (in millions):

	2017		2016
Required	$	268	$	250
Voluntary		482		250
	$	750	$	500

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Business Segment Information (Tables)

6 Months Ended

Nov. 30, 2017

Business Segment Information Tables [Abstract]

Schedule of Segment Information

The following table provides a reconciliation of reportable segment revenues and operating income to our unaudited condensed consolidated financial statement totals for the periods ended November 30 (in millions):

	Three Months Ended						Six Months Ended
	2017			2016			2017			2016
Revenues
FedEx Express segment	$	9,354		$	8,642		$	18,006		$	17,102
FedEx Ground segment		4,929			4,419			9,568			8,709
FedEx Freight segment		1,762			1,597			3,514			3,255
FedEx Services segment		416			414			816			809
Eliminations and other		(148	)		(141	)		(294	)		(281	)
	$	16,313		$	14,931		$	31,610		$	29,594
Operating Income
FedEx Express segment	$	717		$	706		$	1,150		$	1,316
FedEx Ground segment		521			465			1,147			1,075
FedEx Freight segment		118			88			294			223
Eliminations, corporate and other		(94	)		(92	)		(212	)		(183	)
	$	1,262		$	1,167		$	2,379		$	2,431

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Commitments (Tables)

6 Months Ended

Nov. 30, 2017

Commitments Tables [Abstract]

Schedule of Purchase Commitments

As of November 30, 2017, our purchase commitments under various contracts for the remainder of 2018 and annually thereafter were as follows (in millions):

	Aircraft and Aircraft-Related		Other(1)		Total
2018 (remainder)	$	870	$	469	$	1,339
2019		1,723		679		2,402
2020		1,965		525		2,490
2021		1,488		386		1,874
2022		1,451		235		1,686
Thereafter		3,334		499		3,833
Total	$	10,831	$	2,793	$	13,624

⁽¹⁾ Primarily equipment and advertising contracts.

Schedule of Aircraft Purchase Commitments

The following table is a summary of the key aircraft we are committed to purchase as of November 30, 2017 with the year of expected delivery:

	Cessna SkyCourier 408		ATR 72-600F		B767F		B777F		Total
2018 (remainder)		-		-		8		1		9
2019		-		-		15		2		17
2020		-		-		16		3		19
2021		12		5		10		3		30
2022		12		6		10		4		32
Thereafter		26		19		6		-		51
Total		50		30		65		13		158

Schedule of Future Minimum Lease Payments, Operating Leases

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at November 30, 2017 is as follows (in millions):

	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2018 (remainder)	$	335	$	1,113	$	1,448
2019		343		2,014		2,357
2020		261		1,799		2,060
2021		203		1,623		1,826
2022		185		1,464		1,649
Thereafter		175		8,746		8,921
Total	$	1,502	$	16,759	$	18,261

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Nov. 30, 2017

Supplemental Cash Flow Tables [Abstract]

Supplemental Cash Flow

Cash paid for interest expense and income taxes for the six-month periods ended November 30 was as follows (in millions):

	2017			2016
Cash payments for:
Interest (net of capitalized interest)	$	238		$	232
Income taxes	$	617		$	216
Income tax refunds received		(19	)		(13	)
Cash tax payments, net	$	598		$	203

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Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Nov. 30, 2017

Condensed Consolidating Financial Statements Tables [Abstract]

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEETS

(UNAUDITED)

November 30, 2017

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	959	$	342	$	1,495	$	(28	)	$	2,768
Receivables, less allowances		2		5,340		3,441		(128	)		8,655
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		286		931		241		—			1,458
Total current assets		1,247		6,613		5,177		(156	)		12,881
PROPERTY AND EQUIPMENT, AT COST		22		49,585		3,633		—			53,240
Less accumulated depreciation and amortization		18		24,349		1,583		—			25,950
Net property and equipment		4		25,236		2,050		—			27,290
INTERCOMPANY RECEIVABLE		1,175		3,184		—		(4,359	)		—
GOODWILL		—		1,571		5,754		—			7,325
INVESTMENT IN SUBSIDIARIES		29,116		2,903		—		(32,019	)		—
OTHER ASSETS		3,501		1,197		1,297		(3,210	)		2,785
	$	35,043	$	40,704	$	14,278	$	(39,744	)	$	50,281
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings	$	250	$	—	$	—	$	—		$	250
Current portion of long-term debt		—		1		10		—			11
Accrued salaries and employee benefits		59		1,325		528		—			1,912
Accounts payable		153		1,636		1,514		(156	)		3,147
Accrued expenses		451		1,621		835		—			2,907
Total current liabilities		913		4,583		2,887		(156	)		8,227
LONG-TERM DEBT, LESS CURRENT PORTION		14,872		289		19		—			15,180
INTERCOMPANY PAYABLE		—		—		4,359		(4,359	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		6,102		196		(3,210	)		3,088
Other liabilities		2,203		3,642		886		—			6,731
Total other long-term liabilities		2,203		9,744		1,082		(3,210	)		9,819
STOCKHOLDERS’ INVESTMENT		17,055		26,088		5,931		(32,019	)		17,055
	$	35,043	$	40,704	$	14,278	$	(39,744	)	$	50,281

CONDENSED CONSOLIDATING BALANCE SHEETS

May 31, 2017

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,884	$	325	$	1,807	$	(47	)	$	3,969
Receivables, less allowances		3		4,729		2,928		(61	)		7,599
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		25		787		248		—			1,060
Total current assets		1,912		5,841		4,983		(108	)		12,628
PROPERTY AND EQUIPMENT, AT COST		22		47,201		3,403		—			50,626
Less accumulated depreciation and amortization		18		23,211		1,416		—			24,645
Net property and equipment		4		23,990		1,987		—			25,981
INTERCOMPANY RECEIVABLE		1,521		2,607		—		(4,128	)		—
GOODWILL		—		1,571		5,583		—			7,154
INVESTMENT IN SUBSIDIARIES		27,712		2,636		—		(30,348	)		—
OTHER ASSETS		3,494		1,271		1,249		(3,225	)		2,789
	$	34,643	$	37,916	$	13,802	$	(37,809	)	$	48,552
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	—	$	9	$	13	$	—		$	22
Accrued salaries and employee benefits		72		1,335		507		—			1,914
Accounts payable		10		1,411		1,439		(108	)		2,752
Accrued expenses		991		1,522		717		—			3,230
Total current liabilities		1,073		4,277		2,676		(108	)		7,918
LONG-TERM DEBT, LESS CURRENT PORTION		14,641		244		24		—			14,909
INTERCOMPANY PAYABLE		—		—		4,128		(4,128	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		5,472		238		(3,225	)		2,485
Other liabilities		2,856		3,448		863		—			7,167
Total other long-term liabilities		2,856		8,920		1,101		(3,225	)		9,652
STOCKHOLDERS’ INVESTMENT		16,073		24,475		5,873		(30,348	)		16,073
	$	34,643	$	37,916	$	13,802	$	(37,809	)	$	48,552

Condensed Consolidating Statements of Comprehensive Income

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	12,044		$	4,362		$	(93	)	$	16,313
OPERATING EXPENSES:
Salaries and employee benefits		35			4,439			1,268			—			5,742
Purchased transportation		—			2,314			1,576			(50	)		3,840
Rentals and landing fees		1			640			197			(3	)		835
Depreciation and amortization		—			649			107			—			756
Fuel		—			746			72			—			818
Maintenance and repairs		—			584			81			—			665
Intercompany charges, net		(95	)		—			95			—			—
Other		59			1,592			784			(40	)		2,395
		—			10,964			4,180			(93	)		15,051
OPERATING INCOME		—			1,080			182			—			1,262
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		775			40			—			(815	)		—
Interest, net		(130	)		11			(5	)		—			(124	)
Intercompany charges, net		132			(71	)		(61	)		—			—
Other, net		(2	)		(8	)		11			—			1
INCOME BEFORE INCOME TAXES		775			1,052			127			(815	)		1,139
Provision for income taxes		—			225			139			—			364
NET INCOME	$	775		$	827		$	(12	)	$	(815	)	$	775
COMPREHENSIVE INCOME	$	756		$	817		$	(92	)	$	(815	)	$	666

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	10,997		$	4,004		$	(70	)	$	14,931
OPERATING EXPENSES:
Salaries and employee benefits		29			4,161			1,163			—			5,353
Purchased transportation		—			2,074			1,383			(26	)		3,431
Rentals and landing fees		2			625			177			(2	)		802
Depreciation and amortization		—			634			106			—			740
Fuel		—			584			74			—			658
Maintenance and repairs		—			504			75			—			579
Intercompany charges, net		(89	)		38			51			—			—
Other		58			1,429			756			(42	)		2,201
		—			10,049			3,785			(70	)		13,764
OPERATING INCOME		—			948			219			—			1,167
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		700			54			—			(754	)		—
Interest, net		(123	)		4			—			—			(119	)
Intercompany charges, net		124			(64	)		(60	)		—			—
Other, net		(1	)		(5	)		36			—			30
INCOME BEFORE INCOME TAXES		700			937			195			(754	)		1,078
Provision for income taxes		—			291			87			—			378
NET INCOME	$	700		$	646		$	108		$	(754	)	$	700
COMPREHENSIVE INCOME	$	682		$	635		$	(112	)	$	(754	)	$	451

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Six Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	23,611		$	8,216		$	(217	)	$	31,610
OPERATING EXPENSES:
Salaries and employee benefits		73			8,666			2,521			—			11,260
Purchased transportation		—			4,377			3,040			(132	)		7,285
Rentals and landing fees		2			1,267			388			(4	)		1,653
Depreciation and amortization		—			1,288			219			—			1,507
Fuel		—			1,383			138			—			1,521
Maintenance and repairs		—			1,186			154			—			1,340
Intercompany charges, net		(211	)		113			98			—			—
Other		136			3,068			1,542			(81	)		4,665
		—			21,348			8,100			(217	)		29,231
OPERATING INCOME		—			2,263			116			—			2,379
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,371			37			—			(1,408	)		—
Interest, net		(259	)		24			(3	)		—			(238	)
Intercompany charges, net		263			(142	)		(121	)		—			—
Other, net		(4	)		(16	)		—			—			(20	)
INCOME BEFORE INCOME TAXES		1,371			2,166			(8	)		(1,408	)		2,121
Provision for income taxes		—			624			126			—			750
NET INCOME	$	1,371		$	1,542		$	(134	)	$	(1,408	)	$	1,371
COMPREHENSIVE INCOME	$	1,334		$	1,536		$	(110	)	$	(1,408	)	$	1,352

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Six Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	21,900		$	7,834		$	(140	)	$	29,594
OPERATING EXPENSES:
Salaries and employee benefits		65			8,267			2,332			—			10,664
Purchased transportation		—			3,991			2,734			(54	)		6,671
Rentals and landing fees		3			1,245			347			(3	)		1,592
Depreciation and amortization		—			1,245			234			—			1,479
Fuel		—			1,162			146			—			1,308
Maintenance and repairs		—			1,030			147			—			1,177
Intercompany charges, net		(179	)		100			79			—			—
Other		111			2,802			1,442			(83	)		4,272
		—			19,842			7,461			(140	)		27,163
OPERATING INCOME		—			2,058			373			—			2,431
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,415			110			—			(1,525	)		—
Interest, net		(245	)		13			—			—			(232	)
Intercompany charges, net		246			(145	)		(101	)		—			—
Other, net		(1	)		(10	)		32			—			21
INCOME BEFORE INCOME TAXES		1,415			2,026			304			(1,525	)		2,220
Provision for income taxes		—			671			134			—			805
NET INCOME	$	1,415		$	1,355		$	170		$	(1,525	)	$	1,415
COMPREHENSIVE INCOME	$	1,378		$	1,337		$	(31	)	$	(1,525	)	$	1,159

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended November 30, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(1,959	)	$	3,504		$	(66	)	$	19		$	1,498
INVESTING ACTIVITIES
Capital expenditures		—			(2,474	)		(147	)		—			(2,621	)
Business acquisitions, net of cash acquired		—			(44	)		—			—			(44	)
Proceeds from asset dispositions and other		—			12			—			—			12
CASH USED IN INVESTING    ACTIVITIES		—			(2,506	)		(147	)		—			(2,653	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		947			(1,019	)		72			—			—
Payment on loan between subsidiaries		167			—			(167	)		—			—
Proceeds from short-term borrowings		250			—			—			—			250
Principal payments on debt		—			(18	)		(10	)		—			(28	)
Proceeds from stock issuances		205			—			—			—			205
Dividends paid		(268	)		—			—			—			(268	)
Purchase of treasury stock		(270	)		—			—			—			(270	)
Other, net		3			—			—			—			3
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		1,034			(1,037	)		(105	)		—			(108	)
Effect of exchange rate changes on cash		—			56			6			—			62
Net (decrease) increase in cash and cash equivalents		(925	)		17			(312	)		19			(1,201	)
Cash and cash equivalents at beginning of period		1,884			325			1,807			(47	)		3,969
Cash and cash equivalents at end of period	$	959		$	342		$	1,495		$	(28	)	$	2,768

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended November 30, 2016

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(376	)	$	2,550		$	473		$	(12	)	$	2,635
INVESTING ACTIVITIES
Capital expenditures		—			(2,455	)		(226	)		—			(2,681	)
Proceeds from asset dispositions and other		84			13			3			—			100
CASH USED IN INVESTING ACTIVITIES		84			(2,442	)		(223	)		—			(2,581	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		24			(94	)		70			—			—
Payment on loan between subsidiaries		8			(15	)		7			—			—
Intercompany dividends		—			1			(1	)		—			—
Principal payments on debt		—			(31	)		(12	)		—			(43	)
Proceeds from stock issuances		164			—			—			—			164
Dividends paid		(213	)		—			—			—			(213	)
Purchase of treasury stock		(334	)		—			—			—			(334	)
Other, net		4			(2	)		(7	)		—			(5	)
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		(347	)		(141	)		57			—			(431	)
Effect of exchange rate changes on cash		(5	)		1			(94	)		—			(98	)
Net (decrease) increase in cash and cash equivalents		(644	)		(32	)		213			(12	)		(475	)
Cash and cash equivalents at beginning of period		1,974			326			1,277			(43	)		3,534
Cash and cash equivalents at end of period	$	1,330		$	294		$	1,490		$	(55	)	$	3,059

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General - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		6 Months Ended
	Oct. 13, 2017	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Stock-based compensation		$ 41	$ 36	$ 103	$ 93
Lease liability and related right-of-use asset		13,000		13,000
Operating income		$ 1,262	1,167	$ 2,379	2,431
Stock Repurchase Program Number Of Shares Authorized To Be Repurchased		25,000,000		25,000,000
Number of Shares Repurchased		800,000		1,200,000
Treasury Stock Acquired, Average Cost Per Share		$ 220.67		$ 216.45
Payments for Repurchase of Common Stock		$ 184		$ 270	334
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased		14,800,000		14,800,000
Dividends Payable, Date Declared		Nov. 17, 2017
Dividends Payable Amount Per Share		$ 0.50		$ 0.50
Dividends Payable, Date To Be Paid		Jan. 02, 2018
Dividends Payable, Date Of Record		Dec. 11, 2017
ASU 201703 [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Operating income		$ 146	$ 112	$ 292	$ 224
Northwest Research, Inc. [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Cash paid for acquisition of business	$ 50

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Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance			$ 16,073
Translation adjustments	$ (90)	$ (230)	19	$ (218)
Ending balance	17,055		17,055
Foreign Currency Translation Loss [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(576)	(502)	(685)	(514)
Translation adjustments	(90)	(230)	19	(218)
Ending balance	(666)	(732)	(666)	(732)
Retirement Plans Adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	251	326	270	345
Reclassifications from AOCI	(19)	(19)	(38)	(38)
Ending balance	232	307	232	307
Accumulated Other Comprehensive (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Ending balance	$ (434)	$ (425)	$ (434)	$ (425)

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Accumulated Other Comprehensive Income (Loss) - Reclassification Out of Accumulated Other Comprehensive Income (Loss) (Details) - Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	$ 30	$ 30	$ 60	$ 60
Provision for income taxes	(11)	(11)	(22)	(22)
Net income	$ 19	$ 19	$ 38	$ 38

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Financing Arrangements - Additional Information (Details) - USD ($)	3 Months Ended	6 Months Ended
	Nov. 30, 2017	Nov. 30, 2017	May 31, 2017
Line Of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date		Nov. 13, 2020
Letter of Credit Maximum Sublimit Amount	$ 500,000,000	$ 500,000,000
Financial Covenant Terms Ratio	350.00%	350.00%
Financial Covenant Compliance Ratio	190.00%	190.00%
Proceeds from issuance of commercial paper	$ 250,000,000
Commercial paper outstanding	250,000,000	$ 250,000,000
Letters Of Credit Outstanding	255,000,000	255,000,000
Long Term Debt Exclusive of Capital Leases Carrying Value	15,100,000,000	15,100,000,000	$ 14,900,000,000
Long Term Debt Exclusive Of Capital Leases Fair Value	$ 15,900,000,000	$ 15,900,000,000	$ 15,500,000,000
Long-term debt weighted average interest rate	3.60%	3.60%
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Line of Credit Facility, Term		5 years
Line Of Credit Facility Maximum Borrowing Capacity	$ 1,750,000,000	$ 1,750,000,000
Line of credit facility outstanding for future borrowings	$ 1,245,000,000	$ 1,245,000,000

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Computation of Earnings Per Share - Schedule of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Basic earnings per common share:
Net earnings allocable to common shares	[1]	$ 774	$ 700	$ 1,369	$ 1,414
Weighted-average common shares		268.0	266.0	268.0	266.0
Basic earnings per common share		$ 2.89	$ 2.63	$ 5.12	$ 5.32
Diluted earnings per common share:
Net earnings allocable to common shares	[1]	$ 774	$ 700	$ 1,369	$ 1,414
Weighted-average common shares		268.0	266.0	268.0	266.0
Dilutive effect of share-based awards		4.0	4.0	4.0	4.0
Weighted-average diluted shares		272.0	270.0	272.0	270.0
Diluted earnings per common share		$ 2.84	$ 2.59	$ 5.03	$ 5.24
Anti-dilutive options excluded from diluted earnings per common share		2.9	5.1	3.0	5.1

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

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Retirement Plans - Schedule of Retirement Plan Costs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Pension And Other Postretirement Benefit Expense [Abstract]
Defined benefit pension plans	$ 37	$ 58	$ 74	$ 116
Defined contribution plans	124	112	251	231
Postretirement healthcare plans	18	19	37	38
Retirement plans costs	$ 179	$ 189	$ 362	$ 385

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Retirement Plans - Schedule of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Pension Plans [Member] | U.S. Pension Plans [Member]
Net Periodic Benefit Cost
Service cost	$ 170	$ 160	$ 340	$ 319
Interest cost	278	282	557	564
Expected return on plan assets	(406)	(375)	(812)	(751)
Amortization of prior service credit and other	(29)	(30)	(59)	(59)
Total net periodic benefit cost	13	37	26	73
Pension Plans [Member] | International Pension Plans [Member]
Net Periodic Benefit Cost
Service cost	23	20	46	41
Interest cost	13	11	25	22
Expected return on plan assets	(11)	(11)	(22)	(21)
Amortization of prior service credit and other	(1)	1	(1)	1
Total net periodic benefit cost	24	21	48	43
Postretirement Healthcare Plans [Member]
Net Periodic Benefit Cost
Service cost	9	9	18	18
Interest cost	9	10	19	20
Total net periodic benefit cost	$ 18	$ 19	$ 37	$ 38

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Retirement Plans - Schedule of Tax Qualified Pension Plans Contributions (Details) - U.S. Pension Plans [Member] - USD ($) $ in Millions	6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Contributions By Employer	$ 750	$ 500
Required Contribution [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Contributions By Employer	268	250
Voluntary Contribution [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Contributions By Employer	$ 482	$ 250

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Business Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Segment Reporting Information [Line Items]
Revenues	$ 16,313	$ 14,931	$ 31,610	$ 29,594
Operating Income	1,262	1,167	2,379	2,431
FedEx Express Segment [Member]
Segment Reporting Information [Line Items]
Revenues	9,354	8,642	18,006	17,102
Operating Income	717	706	1,150	1,316
FedEx Ground Segment [Member]
Segment Reporting Information [Line Items]
Revenues	4,929	4,419	9,568	8,709
Operating Income	521	465	1,147	1,075
FedEx Freight Segment [Member]
Segment Reporting Information [Line Items]
Revenues	1,762	1,597	3,514	3,255
Operating Income	118	88	294	223
FedEx Services Segment [Member]
Segment Reporting Information [Line Items]
Revenues	416	414	816	809
Eliminations, Corporate and Other [Member]
Segment Reporting Information [Line Items]
Revenues	(148)	(141)	(294)	(281)
Operating Income	$ (94)	$ (92)	$ (212)	$ (183)

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Commitments - Schedule of Purchase Commitments (Details) $ in Millions	Nov. 30, 2017 USD ($)
Unrecorded Unconditional Purchase Obligation [Line Items]
2018 (remainder)	$ 1,339
2019	2,402
2020	2,490
2021	1,874
2022	1,686
Thereafter	3,833
Total	13,624
Aircraft And Related Equipment Commitments [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
2018 (remainder)	870
2019	1,723
2020	1,965
2021	1,488
2022	1,451
Thereafter	3,334
Total	10,831
Other Commitments [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
2018 (remainder)	469	[1]
2019	679	[1]
2020	525	[1]
2021	386	[1]
2022	235	[1]
Thereafter	499	[1]
Total	$ 2,793	[1]

[1] Primarily equipment and advertising contracts.

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Commitments - Additional Information (Details) $ in Millions	3 Months Ended	6 Months Ended
	Nov. 30, 2017 USD ($) air-craft	Nov. 30, 2017 USD ($) air-craft
Other Aircraft Commitments Disclosure [Abstract]
Boeing 767F Conditional Aircraft Commitments		4
Boeing 777F Conditional Aircraft Commitments		6
Deposit and Progress Payments | $	$ 684	$ 684
Cessna SkyCourier 408 [Member]
Other Aircraft Commitments Disclosure [Abstract]
Number of aircraft agreed to purchase	50	50
Additional maximum number of aircraft, options to purchase	50	50
Aircraft expected to be delivered, earliest fiscal year	2021
Aircraft expected to be delivered, latest fiscal year	2024
ATR 72-600F [Member]
Other Aircraft Commitments Disclosure [Abstract]
Number of aircraft agreed to purchase	30	30
Additional maximum number of aircraft, options to purchase	20	20
Aircraft expected to be delivered, earliest fiscal year	2021
Aircraft expected to be delivered, latest fiscal year	2026

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Commitments - Schedule of Aircraft Purchase Commitments (Details)	6 Months Ended
	Nov. 30, 2017 air-craft
Schedule of Aircraft Commitments [Line Items]
2018 (remainder)	9
2019	17
2020	19
2021	30
2022	32
Thereafter	51
Total	158
Cessna SkyCourier 408 [Member]
Schedule of Aircraft Commitments [Line Items]
2021	12
2022	12
Thereafter	26
Total	50
Boeing 767 Freighter [Member]
Schedule of Aircraft Commitments [Line Items]
2018 (remainder)	8
2019	15
2020	16
2021	10
2022	10
Thereafter	6
Total	65
ATR 72-600F [Member]
Schedule of Aircraft Commitments [Line Items]
2021	5
2022	6
Thereafter	19
Total	30
Boeing 777 Freighter [Member]
Schedule of Aircraft Commitments [Line Items]
2018 (remainder)	1
2019	2
2020	3
2021	3
2022	4
Total	13

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Commitments - Schedule of Future Minimum Lease Payments, Operating Leases (Details) $ in Millions	Nov. 30, 2017 USD ($)
Schedule of Future Minimum Operating Lease Payments [Line Items]
2018 (remainder)	$ 1,448
2019	2,357
2020	2,060
2021	1,826
2022	1,649
Thereafter	8,921
Total	18,261
Aircraft and Related Equipment [Member]
Schedule of Future Minimum Operating Lease Payments [Line Items]
2018 (remainder)	335
2019	343
2020	261
2021	203
2022	185
Thereafter	175
Total	1,502
Facilities and Other [Member]
Schedule of Future Minimum Operating Lease Payments [Line Items]
2018 (remainder)	1,113
2019	2,014
2020	1,799
2021	1,623
2022	1,464
Thereafter	8,746
Total	$ 16,759

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Contingencies - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017
California Case [Member]
Loss Contingencies [Line Items]
Litigation Settlement Amount	$ 228.0
U.S. Customs and Border Protection ("CBP") [Member] | Expected Litigation Loss [Member]
Loss Contingencies [Line Items]
Loss contingency amount			$ 39.3
Payments for legal settlements		$ 46.5
Litigation settlement expense		$ 7.2

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Supplemental Cash Flow Information -Supplemental Cash Flow (Details) - USD ($) $ in Millions	6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016
Supplemental Cash Flow Information [Abstract]
Interest (net of capitalized interest)	$ 238	$ 232
Income taxes	617	216
Income tax refunds received	(19)	(13)
Cash tax payments, net	$ 598	$ 203

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Condensed Consolidating Financial Statements - Additional Information (Details) $ in Billions	Nov. 30, 2017 USD ($)
Guarantor Obligations [Abstract]
Long- term debt Guarantee	$ 15.0

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Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions	Nov. 30, 2017	May 31, 2017	Nov. 30, 2016	May 31, 2016
CURRENT ASSETS
Cash and cash equivalents	$ 2,768	$ 3,969	$ 3,059	$ 3,534
Receivables, less allowances	8,655	7,599
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	1,458	1,060
Total current assets	12,881	12,628
PROPERTY AND EQUIPMENT, AT COST	53,240	50,626
Less accumulated depreciation and amortization	25,950	24,645
Net property and equipment	27,290	25,981
GOODWILL	7,325	7,154
OTHER ASSETS	2,785	2,789
ASSETS	50,281	48,552
CURRENT LIABILITIES
Short-term borrowings	250
Current portion of long-term debt	11	22
Accrued salaries and employee benefits	1,912	1,914
Accounts payable	3,147	2,752
Accrued expenses	2,907	3,230
Total current liabilities	8,227	7,918
LONG-TERM DEBT, LESS CURRENT PORTION	15,180	14,909
OTHER LONG-TERM LIABILITIES
Deferred income taxes	3,088	2,485
Other liabilities	6,731	7,167
Total other long-term liabilities	9,819	9,652
STOCKHOLDERS’ INVESTMENT	17,055	16,073
LIABILITIES AND STOCKHOLDERS' INVESTMENT	50,281	48,552
Consolidation Eliminations [Member]
CURRENT ASSETS
Cash and cash equivalents	(28)	(47)	(55)	(43)
Receivables, less allowances	(128)	(61)
Total current assets	(156)	(108)
INTERCOMPANY RECEIVABLE	(4,359)	(4,128)
INVESTMENT IN SUBSIDIARIES	(32,019)	(30,348)
OTHER ASSETS	(3,210)	(3,225)
ASSETS	(39,744)	(37,809)
CURRENT LIABILITIES
Accounts payable	(156)	(108)
Total current liabilities	(156)	(108)
INTERCOMPANY PAYABLE	(4,359)	(4,128)
OTHER LONG-TERM LIABILITIES
Deferred income taxes	(3,210)	(3,225)
Total other long-term liabilities	(3,210)	(3,225)
STOCKHOLDERS’ INVESTMENT	(32,019)	(30,348)
LIABILITIES AND STOCKHOLDERS' INVESTMENT	(39,744)	(37,809)
Parent Company [Member] | Reportable Legal Entities [Member]
CURRENT ASSETS
Cash and cash equivalents	959	1,884	1,330	1,974
Receivables, less allowances	2	3
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	286	25
Total current assets	1,247	1,912
PROPERTY AND EQUIPMENT, AT COST	22	22
Less accumulated depreciation and amortization	18	18
Net property and equipment	4	4
INTERCOMPANY RECEIVABLE	1,175	1,521
INVESTMENT IN SUBSIDIARIES	29,116	27,712
OTHER ASSETS	3,501	3,494
ASSETS	35,043	34,643
CURRENT LIABILITIES
Short-term borrowings	250
Accrued salaries and employee benefits	59	72
Accounts payable	153	10
Accrued expenses	451	991
Total current liabilities	913	1,073
LONG-TERM DEBT, LESS CURRENT PORTION	14,872	14,641
OTHER LONG-TERM LIABILITIES
Other liabilities	2,203	2,856
Total other long-term liabilities	2,203	2,856
STOCKHOLDERS’ INVESTMENT	17,055	16,073
LIABILITIES AND STOCKHOLDERS' INVESTMENT	35,043	34,643
Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
CURRENT ASSETS
Cash and cash equivalents	342	325	294	326
Receivables, less allowances	5,340	4,729
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	931	787
Total current assets	6,613	5,841
PROPERTY AND EQUIPMENT, AT COST	49,585	47,201
Less accumulated depreciation and amortization	24,349	23,211
Net property and equipment	25,236	23,990
INTERCOMPANY RECEIVABLE	3,184	2,607
GOODWILL	1,571	1,571
INVESTMENT IN SUBSIDIARIES	2,903	2,636
OTHER ASSETS	1,197	1,271
ASSETS	40,704	37,916
CURRENT LIABILITIES
Current portion of long-term debt	1	9
Accrued salaries and employee benefits	1,325	1,335
Accounts payable	1,636	1,411
Accrued expenses	1,621	1,522
Total current liabilities	4,583	4,277
LONG-TERM DEBT, LESS CURRENT PORTION	289	244
OTHER LONG-TERM LIABILITIES
Deferred income taxes	6,102	5,472
Other liabilities	3,642	3,448
Total other long-term liabilities	9,744	8,920
STOCKHOLDERS’ INVESTMENT	26,088	24,475
LIABILITIES AND STOCKHOLDERS' INVESTMENT	40,704	37,916
Non Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
CURRENT ASSETS
Cash and cash equivalents	1,495	1,807	$ 1,490	$ 1,277
Receivables, less allowances	3,441	2,928
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	241	248
Total current assets	5,177	4,983
PROPERTY AND EQUIPMENT, AT COST	3,633	3,403
Less accumulated depreciation and amortization	1,583	1,416
Net property and equipment	2,050	1,987
GOODWILL	5,754	5,583
OTHER ASSETS	1,297	1,249
ASSETS	14,278	13,802
CURRENT LIABILITIES
Current portion of long-term debt	10	13
Accrued salaries and employee benefits	528	507
Accounts payable	1,514	1,439
Accrued expenses	835	717
Total current liabilities	2,887	2,676
LONG-TERM DEBT, LESS CURRENT PORTION	19	24
INTERCOMPANY PAYABLE	4,359	4,128
OTHER LONG-TERM LIABILITIES
Deferred income taxes	196	238
Other liabilities	886	863
Total other long-term liabilities	1,082	1,101
STOCKHOLDERS’ INVESTMENT	5,931	5,873
LIABILITIES AND STOCKHOLDERS' INVESTMENT	$ 14,278	$ 13,802

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Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 30, 2017	Nov. 30, 2016	Nov. 30, 2017	Nov. 30, 2016
Condensed Financial Statements Captions [Line Items]
REVENUES	$ 16,313	$ 14,931	$ 31,610	$ 29,594
OPERATING EXPENSES:
Salaries and employee benefits	5,742	5,353	11,260	10,664
Purchased transportation	3,840	3,431	7,285	6,671
Rentals and landing fees	835	802	1,653	1,592
Depreciation and amortization	756	740	1,507	1,479
Fuel	818	658	1,521	1,308
Maintenance and repairs	665	579	1,340	1,177
Other	2,395	2,201	4,665	4,272
OPERATING EXPENSES	15,051	13,764	29,231	27,163
OPERATING INCOME	1,262	1,167	2,379	2,431
OTHER INCOME (EXPENSE):
Interest, net	(124)	(119)	(238)	(232)
Other, net	1	30	(20)	21
INCOME BEFORE INCOME TAXES	1,139	1,078	2,121	2,220
PROVISION FOR INCOME TAXES	364	378	750	805
NET INCOME	775	700	1,371	1,415
COMPREHENSIVE INCOME	666	451	1,352	1,159
Consolidation Eliminations [Member]
Condensed Financial Statements Captions [Line Items]
REVENUES	(93)	(70)	(217)	(140)
OPERATING EXPENSES:
Purchased transportation	(50)	(26)	(132)	(54)
Rentals and landing fees	(3)	(2)	(4)	(3)
Other	(40)	(42)	(81)	(83)
OPERATING EXPENSES	(93)	(70)	(217)	(140)
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	(815)	(754)	(1,408)	(1,525)
INCOME BEFORE INCOME TAXES	(815)	(754)	(1,408)	(1,525)
NET INCOME	(815)	(754)	(1,408)	(1,525)
COMPREHENSIVE INCOME	(815)	(754)	(1,408)	(1,525)
Parent Company [Member] | Reportable Legal Entities [Member]
OPERATING EXPENSES:
Salaries and employee benefits	35	29	73	65
Rentals and landing fees	1	2	2	3
Intercompany charges, net	(95)	(89)	(211)	(179)
Other	59	58	136	111
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	775	700	1,371	1,415
Interest, net	(130)	(123)	(259)	(245)
Intercompany charges, net	132	124	263	246
Other, net	(2)	(1)	(4)	(1)
INCOME BEFORE INCOME TAXES	775	700	1,371	1,415
NET INCOME	775	700	1,371	1,415
COMPREHENSIVE INCOME	756	682	1,334	1,378
Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
REVENUES	12,044	10,997	23,611	21,900
OPERATING EXPENSES:
Salaries and employee benefits	4,439	4,161	8,666	8,267
Purchased transportation	2,314	2,074	4,377	3,991
Rentals and landing fees	640	625	1,267	1,245
Depreciation and amortization	649	634	1,288	1,245
Fuel	746	584	1,383	1,162
Maintenance and repairs	584	504	1,186	1,030
Intercompany charges, net		38	113	100
Other	1,592	1,429	3,068	2,802
OPERATING EXPENSES	10,964	10,049	21,348	19,842
OPERATING INCOME	1,080	948	2,263	2,058
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	40	54	37	110
Interest, net	11	4	24	13
Intercompany charges, net	(71)	(64)	(142)	(145)
Other, net	(8)	(5)	(16)	(10)
INCOME BEFORE INCOME TAXES	1,052	937	2,166	2,026
PROVISION FOR INCOME TAXES	225	291	624	671
NET INCOME	827	646	1,542	1,355
COMPREHENSIVE INCOME	817	635	1,536	1,337
Non Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
REVENUES	4,362	4,004	8,216	7,834
OPERATING EXPENSES:
Salaries and employee benefits	1,268	1,163	2,521	2,332
Purchased transportation	1,576	1,383	3,040	2,734
Rentals and landing fees	197	177	388	347
Depreciation and amortization	107	106	219	234
Fuel	72	74	138	146
Maintenance and repairs	81	75	154	147
Intercompany charges, net	95	51	98	79
Other	784	756	1,542	1,442
OPERATING EXPENSES	4,180	3,785	8,100	7,461
OPERATING INCOME	182	219	116	373
OTHER INCOME (EXPENSE):
Interest, net	(5)		(3)
Intercompany charges, net	(61)	(60)	(121)	(101)
Other, net	11	36		32
INCOME BEFORE INCOME TAXES	127	195	(8)	304
PROVISION FOR INCOME TAXES	139	87	126	134
NET INCOME	(12)	108	(134)	170
COMPREHENSIVE INCOME	$ (92)	$ (112)	$ (110)	$ (31)

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Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Nov. 30, 2017	Nov. 30, 2017	Nov. 30, 2016
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$ 1,498	$ 2,635
Investing Activities:
Capital expenditures		(2,621)	(2,681)
Business acquisitions, net of cash acquired		(44)
Proceeds from asset dispositions and other		12	100
Cash used in investing activities		(2,653)	(2,581)
Financing Activities:
Proceeds from short-term borrowings		250
Principal payments on debt		(28)	(43)
Proceeds from stock issuances		205	164
Dividends paid		(268)	(213)
Purchase of treasury stock	$ (184)	(270)	(334)
Other, net		3	(5)
Cash used in financing activities		(108)	(431)
Effect of exchange rate changes on cash		62	(98)
Net decrease in cash and cash equivalents		(1,201)	(475)
Cash and cash equivalents at beginning of period		3,969	3,534
Cash and cash equivalents at end of period	2,768	2,768	3,059
Consolidation Eliminations [Member]
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		19	(12)
Financing Activities:
Net decrease in cash and cash equivalents		19	(12)
Cash and cash equivalents at beginning of period		(47)	(43)
Cash and cash equivalents at end of period	(28)	(28)	(55)
Parent Company [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(1,959)	(376)
Investing Activities:
Proceeds from asset dispositions and other			84
Cash used in investing activities			84
Financing Activities:
Net transfers from (to) Parent		947	24
Payment on loan between subsidiaries		167	8
Proceeds from short-term borrowings		250
Proceeds from stock issuances		205	164
Dividends paid		(268)	(213)
Purchase of treasury stock		(270)	(334)
Other, net		3	4
Cash used in financing activities		1,034	(347)
Effect of exchange rate changes on cash			(5)
Net decrease in cash and cash equivalents		(925)	(644)
Cash and cash equivalents at beginning of period		1,884	1,974
Cash and cash equivalents at end of period	959	959	1,330
Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		3,504	2,550
Investing Activities:
Capital expenditures		(2,474)	(2,455)
Business acquisitions, net of cash acquired		(44)
Proceeds from asset dispositions and other		12	13
Cash used in investing activities		(2,506)	(2,442)
Financing Activities:
Net transfers from (to) Parent		(1,019)	(94)
Intercompany dividends			1
Payment on loan between subsidiaries			(15)
Principal payments on debt		(18)	(31)
Other, net			(2)
Cash used in financing activities		(1,037)	(141)
Effect of exchange rate changes on cash		56	1
Net decrease in cash and cash equivalents		17	(32)
Cash and cash equivalents at beginning of period		325	326
Cash and cash equivalents at end of period	342	342	294
Non Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(66)	473
Investing Activities:
Capital expenditures		(147)	(226)
Proceeds from asset dispositions and other			3
Cash used in investing activities		(147)	(223)
Financing Activities:
Net transfers from (to) Parent		72	70
Intercompany dividends			(1)
Payment on loan between subsidiaries		(167)	7
Principal payments on debt		(10)	(12)
Other, net			(7)
Cash used in financing activities		(105)	57
Effect of exchange rate changes on cash		6	(94)
Net decrease in cash and cash equivalents		(312)	213
Cash and cash equivalents at beginning of period		1,807	1,277
Cash and cash equivalents at end of period	$ 1,495	$ 1,495	$ 1,490