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 February 28, 2018

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 March 19, 2018
Common Stock, par value $0.10 per share	267,215,207

FEDEX CORPORATION

INDEX

	PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets February 28, 2018 and May 31, 2017	3
Condensed Consolidated Statements of Income Three and Nine Months Ended February 28, 2018 and 2017	5
Condensed Consolidated Statements of Comprehensive Income Three and Nine Months Ended February 28, 2018 and 2017	6
Condensed Consolidated Statements of Cash Flows Nine Months Ended February 28, 2018 and 2017	7
Notes to Condensed Consolidated Financial Statements	8
Report of Independent Registered Public Accounting Firm	27
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition	28
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	51
ITEM 4. Controls and Procedures	51
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	52
ITEM 1A. Risk Factors	52
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	54
ITEM 6. Exhibits	55
Signature	57
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 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)

	February 28, 2018 (Unaudited)		May 31, 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,789	$	3,969
Receivables, less allowances of $373 and $252		8,671		7,599
Spare parts, supplies and fuel, less allowances of $258 and $237		523		514
Prepaid expenses and other		1,592		546
Total current assets		13,575		12,628
PROPERTY AND EQUIPMENT, AT COST		54,377		50,626
Less accumulated depreciation and amortization		26,680		24,645
Net property and equipment		27,697		25,981
OTHER LONG-TERM ASSETS
Goodwill		7,464		7,154
Other assets		3,115		2,789
Total other long-term assets		10,579		9,943
	$	51,851	$	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)

	February 28, 2018 (Unaudited)			May 31, 2017
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings	$	799		$	—
Current portion of long-term debt		764			22
Accrued salaries and employee benefits		1,945			1,914
Accounts payable		3,102			2,752
Accrued expenses		2,893			3,230
Total current liabilities		9,503			7,918
LONG-TERM DEBT, LESS CURRENT PORTION		16,017			14,909
OTHER LONG-TERM LIABILITIES
Deferred income taxes		2,401			2,485
Pension, postretirement healthcare and other benefit obligations		2,181			4,487
Self-insurance accruals		1,715			1,494
Deferred lease obligations		532			531
Deferred gains, principally related to aircraft transactions		124			137
Other liabilities		484			518
Total other long-term liabilities		7,437			9,652
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS’ INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares    issued as of February 28, 2018 and May 31, 2017		32			32
Additional paid-in capital		3,085			3,005
Retained earnings		23,710			20,833
Accumulated other comprehensive loss		(357	)		(415	)
Treasury stock, at cost		(7,576	)		(7,382	)
Total common stockholders’ investment		18,894			16,073
	$	51,851		$	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						Nine Months Ended
	February 28,						February 28,
	2018			2017			2018			2017
REVENUES	$	16,526		$	14,997		$	48,136		$	44,591
OPERATING EXPENSES:
Salaries and employee benefits		5,981			5,395			17,241			16,059
Purchased transportation		3,935			3,498			11,220			10,169
Rentals and landing fees		873			834			2,526			2,426
Depreciation and amortization		786			762			2,293			2,241
Fuel		914			735			2,435			2,043
Maintenance and repairs		628			588			1,968			1,765
Other		2,408			2,160			7,073			6,432
		15,525			13,972			44,756			41,135
OPERATING INCOME		1,001			1,025			3,380			3,456
OTHER INCOME (EXPENSE):
Interest, net		(125	)		(122	)		(363	)		(354	)
Other, net		(2	)		(4	)		(22	)		17
		(127	)		(126	)		(385	)		(337	)
INCOME BEFORE INCOME TAXES		874			899			2,995			3,119
PROVISION FOR INCOME TAXES		(1,200	)		337			(450	)		1,142
NET INCOME	$	2,074		$	562		$	3,445		$	1,977
EARNINGS PER COMMON SHARE:
Basic	$	7.74		$	2.11		$	12.85		$	7.43
Diluted	$	7.59		$	2.07		$	12.63		$	7.31
DIVIDENDS DECLARED PER COMMON SHARE	$	0.50		$	0.40		$	2.00		$	1.60

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						Nine Months Ended
	February 28,						February 28,
	2018			2017			2018			2017
NET INCOME	$	2,074		$	562		$	3,445		$	1,977
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax of $9, $3, $26, and $19		100			110			119			(108	)
Amortization of prior service credit, net of tax of $7, $12, $29, and $34		(23	)		(19	)		(61	)		(57	)
		77			91			58			(165	)
COMPREHENSIVE INCOME	$	2,151		$	653		$	3,503		$	1,812

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)

	Nine Months Ended
	February 28,
	2018			2017
Operating Activities:
Net income	$	3,445		$	1,977
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		2,293			2,241
Provision for uncollectible accounts		177			115
Stock-based compensation		135			123
Deferred income taxes and other noncash items		(914	)		474
Gain from sale of investment		—			(35	)
Changes in assets and liabilities:
Receivables		(986	)		(340	)
Other assets		(151	)		(235	)
Accounts payable and other liabilities		(2,781	)		(1,642	)
Other, net		(56	)		(33	)
Cash provided by operating activities		1,162			2,645
Investing Activities:
Capital expenditures		(3,994	)		(3,790	)
Business acquisitions, net of cash acquired		(44	)		—
Proceeds from asset dispositions and other		21			123
Cash used in investing activities		(4,017	)		(3,667	)
Financing Activities:
Proceeds from short-term borrowings, net		797			—
Principal payments on debt		(31	)		(49	)
Proceeds from debt issuances		1,481			1,190
Proceeds from stock issuances		284			265
Dividends paid		(402	)		(319	)
Purchase of treasury stock		(558	)		(358	)
Other, net		6			2
Cash provided by financing activities		1,577			731
Effect of exchange rate changes on cash		98			(70	)
Net decrease in cash and cash equivalents		(1,180	)		(361	)
Cash and cash equivalents at beginning of period		3,969			3,534
Cash and cash equivalents at end of period	$	2,789		$	3,173

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 February 28, 2018, the results of our operations for the three- and nine-month periods ended February 28, 2018 and 2017, and cash flows for the nine-month periods ended February 28, 2018 and 2017. Operating results for the three- and nine-month periods ended February 28, 2018 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 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 $32 million for the three-month period ended February 28, 2018 and $135 million for the nine-month period ended February 28, 2018. Our stock-based compensation expense was $31 million for the three-month period ended February 28, 2017 and $123 million for the nine-month period ended February 28, 2017. 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.

In December 2017, the SEC staff issued Staff Accounting Bulletin (“SAB”) 118 to provide guidance to registrants in accounting for income taxes under the Tax Cuts and Jobs Act (“TCJA”). See Note 5 for further discussion related to applying this guidance.

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 an immaterial impact on our accounting and financial reporting for the third quarter and nine months of 2018.

In January 2017, the FASB issued an Accounting Standards Update that simplifies the subsequent measurement of goodwill, eliminating Step 2 from the goodwill impairment test. Under this new guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an

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impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This guidance will be applied prospectively and will be effective for us beginning June 1, 2020 (fiscal 2021). Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We expect to early adopt the guidance during the fourth quarter of 2018.

In 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 finalizing the assessment of the impact this new standard will have on our consolidated financial statements and related disclosures, including ongoing contract reviews, which will be completed by the end of 2018. We do not anticipate that the new guidance will have a material impact on our revenue recognition policies, practices or systems.

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 $143 million in the third quarter and $436 million in the nine months of 2018, and by $113 million in the third quarter and $337 million in the nine months of 2017, but would not have impacted our net income in these periods. This new guidance will be effective June 1, 2018 and will be applied retrospectively.

In 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 our 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 portfolio, 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 June 1, 2019 (fiscal 2020).

In February 2018, the FASB issued an Accounting Standards Update that will permit companies to reclassify the income tax effect of the TCJA on items within accumulated other comprehensive income (loss) (“AOCI”) to retained earnings. These changes will be effective June 1, 2019 (fiscal 2020).

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 third quarter of 2018, we repurchased 1.2 million shares of FedEx common stock at an average price of $248.73 per share for a total of $288 million. During the nine months of 2018, we repurchased 2.4 million shares of FedEx common stock at an average price of $232.00 per share for a total of $558 million. As of February 28, 2018, 13.6 million shares remained under the current share repurchase authorization.

DIVIDENDS DECLARED PER COMMON SHARE. On February 16, 2018, our Board of Directors declared a quarterly dividend of $0.50 per share of common stock. The dividend will be paid on April 2, 2018 to stockholders of record as of the close of business on March 12, 2018. 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 AOCI, net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended February 28 (in millions; amounts in parentheses indicate debits to AOCI):

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Foreign currency translation loss:
Balance at beginning of period	$	(666	)	$	(732	)	$	(685	)	$	(514	)
Translation adjustments		100			110			119			(108	)
Balance at end of period		(566	)		(622	)		(566	)		(622	)
Retirement plans adjustments:
Balance at beginning of period		232			307			270			345
Reclassifications from AOCI		(23	)		(19	)		(61	)		(57	)
Balance at end of period		209			288			209			288
Accumulated other comprehensive (loss) at end of period	$	(357	)	$	(334	)	$	(357	)	$	(334	)

The following table presents details of the reclassifications from AOCI for the periods ended February 28 (in millions; amounts in parentheses indicate debits to earnings):

	Amount Reclassified from AOCI												Affected Line Item in the Income Statement
	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Amortization of retirement plans    prior service credits, before tax	$	30		$	31		$	90		$	91		Salaries and employee benefits
Income tax benefit		(7	)		(12	)		(29	)		(34	)	Provision for income taxes
AOCI reclassifications, net of tax	$	23		$	19		$	61		$	57		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.

During the third quarter of 2018, we issued $1.5 billion of senior unsecured debt under our current shelf registration statement, comprised of $500 million of 3.40% fixed-rate notes due in February 2028, and $1 billion of 4.05% fixed-rate notes due in February 2048. Interest on these notes is paid semi-annually. We used the net proceeds for a voluntary incremental contribution in February 2018 to our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”).

During the quarter, we amended our five-year revolving credit facility to increase the aggregate amount available under the facility from $1.75 billion to $2.0 billion. The facility, which expires in November 2020 and 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 2.2 to 1.0 at February 28, 2018. 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 this 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 third quarter of 2018, we issued commercial paper which provided us with additional short-term liquidity. The maximum outstanding during the quarter was $800 million. 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 February 28, 2018, $800 million of commercial paper and $54 million in letters of credit were outstanding, leaving $1.146 billion available under the revolving credit facility for future borrowings.

Long-term debt, exclusive of capital leases, had carrying values of $16.7 billion at February 28, 2018 and $14.9 billion at May 31, 2017, compared with estimated fair values of $17.0 billion at February 28, 2018 and $15.5 billion at May 31, 2017. The annualized

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weighted-average interest rate on long-term debt was 3.6% at February 28, 2018. The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of our long-term debt is classified as Level 2 within the fair value hierarchy. This classification is defined as a fair value determined using market-based inputs other than quoted prices that are observable for the liability, either directly or indirectly.

(4) Computation of Earnings Per Share

The calculation of basic and diluted earnings per common share for the periods ended February 28 was as follows (in millions, except per share amounts):

	Three Months Ended				Nine Months Ended
	2018		2017		2018		2017
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	2,071	$	561	$	3,441	$	1,974
Weighted-average common shares		268		266		268		266
Basic earnings per common share	$	7.74	$	2.11	$	12.85	$	7.43
Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	2,071	$	561	$	3,441	$	1,974
Weighted-average common shares		268		266		268		266
Dilutive effect of share-based awards		5		5		4		4
Weighted-average diluted shares		273		271		272		270
Diluted earnings per common share	$	7.59	$	2.07	$	12.63	$	7.31
Anti-dilutive options excluded from diluted earnings per    common share		1.9		4.0		2.6		4.7

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

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(5) Income Taxes

On December 22, 2017, the United States government enacted comprehensive tax legislation through the TCJA. The TCJA significantly changes the U.S. corporate income tax system including, among other things, lowering the statutory federal income tax rate from 35% to 21%, eliminating or reducing certain income tax deductions, and implementing a modified territorial tax system that includes a one-time transition tax on previously deferred foreign earnings. Due to our May 31 fiscal year end, the lower rate will be phased in, resulting in a U.S. statutory federal rate of 29.2% for 2018 and a 21% statutory federal rate for subsequent years.

In December 2017, the SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides for a measurement period of up to one year from the enactment date for companies to complete the accounting for the initial income tax effects of the TCJA. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting is complete and provide a provisional estimate (where determinable) of the income tax effects of the TCJA where the accounting is incomplete. The provisional estimate is required to be updated throughout the measurement period.

As of February 28, 2018, we have not completed our initial accounting of the tax effects of the TCJA; however, where determinable, we have made an estimate of the effects on our existing deferred tax balances and the one-time transition tax. During the quarter, we recognized a provisional benefit of $1.15 billion related to the remeasurement of our net U.S. deferred tax liability and a provisional benefit of $36 million from foreign tax credits exceeding the one-time transition tax on previously deferred foreign earnings.    

In addition to the provisional amounts above, we recognized a one-time benefit of $204 million from a $1.5 billion contribution to our U.S. Pension Plans in February 2018 and a benefit of $165 million related to a lower statutory income tax rate on fiscal 2018 year-to-date earnings.  

The following table provides a reconciliation of the 2017 effective tax rates to the 2018 effective tax rates, including the impact of the TCJA, for the periods ended February 28:

	Three Months Ended			Nine Months Ended
	2018			2018
2017 Effective Tax Rate		37.5	%		36.6	%
Remeasurement of net U.S. deferred tax liability		(131.5	)		(38.4	)
Effect of February 2018 pension contribution (a)		(23.3	)		(6.8	)
Lower statutory tax rate		(18.9	)		(5.5	)
Transition tax		(4.1	)		(1.2	)
Other (b)		3.0			0.3
2018 Effective Tax Rate		(137.3	)%		(15.0	)%

(a) The benefit is from the pension contribution deducted on our 2017 tax return at a tax rate of 35%.

(b) The 2018 tax rates were negatively impacted by the effect of the NotPetya cyberattack, changes in uncertain tax positions and tax rate impacts on changes in deferred tax items after the TCJA enactment and were favorably impacted from foreign tax credits associated with a second quarter dividend from foreign operations.

(6) 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 February 28 were as follows (in millions):

	Three Months Ended				Nine Months Ended
	2018		2017		2018		2017
Defined benefit pension plans	$	39	$	57	$	113	$	173
Defined contribution plans		135		117		386		348
Postretirement healthcare plans		19		19		56		57
	$	193	$	193	$	555	$	578

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Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended February 28 included the following components (in millions):

	Three Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2018			2017			2018			2017			2018		2017
Service cost	$	169		$	160		$	23		$	20		$	9	$	9
Interest cost		279			282			12			11			10		10
Expected return on plan assets		(406	)		(375	)		(10	)		(9	)		—		—
Amortization of prior service credit and other		(29	)		(30	)		1			(2	)		—		—
	$	13		$	37		$	26		$	20		$	19	$	19
	Nine Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2018			2017			2018			2017			2018		2017
Service cost	$	509		$	479		$	69		$	61		$	27	$	27
Interest cost		836			846			37			33			29		30
Expected return on plan assets		(1,218	)		(1,126	)		(32	)		(30	)		—		—
Amortization of prior service credit and other		(88	)		(89	)		—			(1	)		—		—
	$	39		$	110		$	74		$	63		$	56	$	57

Contributions to our U.S. Pension Plans for the nine-month periods ended February 28 were as follows (in millions):

	2018		2017
Required	$	22	$	444
Voluntary		2,478		1,306
	$	2,500	$	1,750

During the third quarter of 2018, we made voluntary contributions to our U.S. Pension Plans of $1.75 billion.

(7) 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)

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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.

Effective March 1, 2018, we realigned our specialty logistics and e-commerce solutions in a new organizational structure under FedEx Trade Networks, Inc. in the FedEx Express segment. The realignment allows us to improve our ability to deliver the capabilities of our specialty companies to customers. The new structure includes FedEx Custom Critical, FedEx Cross Border, FedEx Supply Chain, FedEx Trade Networks Transport & Brokerage and, effective June 1, 2018, a new company called FedEx Forward Depots. Prior period segment results will be recast to conform to current year presentation beginning in the fourth quarter of 2018.

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.

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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 February 28 (in millions):

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Revenues
FedEx Express segment	$	9,370		$	8,569		$	27,376		$	25,671
FedEx Ground segment		5,222			4,688			14,790			13,397
FedEx Freight segment		1,694			1,492			5,208			4,747
FedEx Services segment		397			389			1,213			1,198
Eliminations and other		(157	)		(141	)		(451	)		(422	)
	$	16,526		$	14,997		$	48,136		$	44,591
Operating Income
FedEx Express segment	$	424		$	557		$	1,574		$	1,873
FedEx Ground segment		634			515			1,781			1,590
FedEx Freight segment		55			41			349			264
Eliminations, corporate and other		(112	)		(88	)		(324	)		(271	)
	$	1,001		$	1,025		$	3,380		$	3,456

(8) Commitments

As of February 28, 2018, 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)	$	516	$	254	$	770
2019		1,789		725		2,514
2020		1,931		621		2,552
2021		1,244		400		1,644
2022		1,364		251		1,615
Thereafter		3,314		508		3,822
Total	$	10,158	$	2,759	$	12,917

⁽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 February 28, 2018, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and three 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 quarter, FedEx Express entered into an agreement to accelerate the delivery of two B777F aircraft from 2021 to 2020, one B777F aircraft from 2021 to 2019, and one B777F aircraft from 2022 to 2020. 

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We had $922 million in deposits and progress payments as of February 28, 2018 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 February 28, 2018 with the year of expected delivery:

	Cessna SkyCourier 408		ATR 72-600F		B767F		B777F		Total
2018 (remainder)		-		-		4		1		5
2019		-		-		15		3		18
2020		-		-		16		6		22
2021		12		5		10		-		27
2022		12		6		10		3		31
Thereafter		26		19		6		-		51
Total		50		30		61		13		154

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at February 28, 2018 is as follows (in millions):

	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2018 (remainder)	$	47	$	585	$	632
2019		343		2,065		2,408
2020		261		1,854		2,115
2021		203		1,675		1,878
2022		185		1,510		1,695
Thereafter		175		9,018		9,193
Total	$	1,214	$	16,707	$	17,921

Future minimum lease payments under capital leases were immaterial at February 28, 2018. 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.

(9) Contingencies

Independent Contractor — Lawsuits and Administrative Proceedings. 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

- 16 -

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. 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 additional 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. In March 2018, we settled this matter for an immaterial amount, and the settlement agreement has been approved by the court. We have been reimbursed by the sellers of GENCO for the amount of the settlement.

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.

(10) Supplemental Cash Flow Information

Cash paid for interest expense and income taxes for the nine-month periods ended February 28 was as follows (in millions):

	2018			2017
Cash payments for:
Interest (net of capitalized interest)	$	430		$	400
Income taxes	$	707		$	294
Income tax refunds received		(59	)		(16	)
Cash tax payments, net	$	648		$	278

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(11) 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 $16.6 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.

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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)

February 28, 2018

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	957	$	375	$	1,494	$	(37	)	$	2,789
Receivables, less allowances		1		5,308		3,462		(100	)		8,671
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		920		928		267		—			2,115
Total current assets		1,878		6,611		5,223		(137	)		13,575
PROPERTY AND EQUIPMENT, AT COST		22		50,601		3,754		—			54,377
Less accumulated depreciation and amortization		18		24,999		1,663		—			26,680
Net property and equipment		4		25,602		2,091		—			27,697
INTERCOMPANY RECEIVABLE		1,401		2,508		130		(4,039	)		—
GOODWILL		—		1,571		5,893		—			7,464
INVESTMENT IN SUBSIDIARIES		31,295		2,928		—		(34,223	)		—
OTHER ASSETS		2,706		1,566		1,268		(2,425	)		3,115
	$	37,284	$	40,786	$	14,605	$	(40,824	)	$	51,851
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings	$	799	$	—	$	—	$	—		$	799
Current portion of long-term debt		750		6		8		—			764
Accrued salaries and employee benefits		69		1,362		514		—			1,945
Accounts payable		149		1,483		1,607		(137	)		3,102
Accrued expenses		379		1,605		909		—			2,893
Total current liabilities		2,146		4,456		3,038		(137	)		9,503
LONG-TERM DEBT, LESS CURRENT PORTION		15,713		288		16		—			16,017
INTERCOMPANY PAYABLE		—		—		4,039		(4,039	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		4,285		541		(2,425	)		2,401
Other liabilities		531		3,605		900		—			5,036
Total other long-term liabilities		531		7,890		1,441		(2,425	)		7,437
STOCKHOLDERS’ INVESTMENT		18,894		28,152		6,071		(34,223	)		18,894
	$	37,284	$	40,786	$	14,605	$	(40,824	)	$	51,851

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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

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CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	12,433		$	4,229		$	(136	)	$	16,526
OPERATING EXPENSES:
Salaries and employee benefits		39			4,623			1,319			—			5,981
Purchased transportation		—			2,459			1,560			(84	)		3,935
Rentals and landing fees		2			684			189			(2	)		873
Depreciation and amortization		1			670			115			—			786
Fuel		—			837			77			—			914
Maintenance and repairs		1			543			84			—			628
Intercompany charges, net		(114	)		185			(71	)		—			—
Other		71			1,596			791			(50	)		2,408
		—			11,597			4,064			(136	)		15,525
OPERATING INCOME		—			836			165			—			1,001
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		2,074			2			—			(2,076	)		—
Interest, net		(137	)		11			1			—			(125	)
Intercompany charges, net		140			(78	)		(62	)		—			—
Other, net		(3	)		104			(103	)		—			(2	)
INCOME BEFORE INCOME TAXES		2,074			875			1			(2,076	)		874
Provision for income taxes		—			(1,197	)		(3	)		—			(1,200	)
NET INCOME	$	2,074		$	2,072		$	4		$	(2,076	)	$	2,074
COMPREHENSIVE INCOME	$	2,051		$	2,069		$	107		$	(2,076	)	$	2,151

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CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	11,275		$	3,794		$	(72	)	$	14,997
OPERATING EXPENSES:
Salaries and employee benefits		29			4,210			1,156			—			5,395
Purchased transportation		—			2,219			1,306			(27	)		3,498
Rentals and landing fees		1			657			177			(1	)		834
Depreciation and amortization		1			649			112			—			762
Fuel		—			657			78			—			735
Maintenance and repairs		1			514			73			—			588
Intercompany charges, net		(87	)		(33	)		120			—			—
Other		55			1,428			721			(44	)		2,160
		—			10,301			3,743			(72	)		13,972
OPERATING INCOME		—			974			51			—			1,025
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		562			(41	)		—			(521	)		—
Interest, net		(129	)		6			1			—			(122	)
Intercompany charges, net		130			(79	)		(51	)		—			—
Other, net		(1	)		(118	)		115			—			(4	)
INCOME BEFORE INCOME TAXES		562			742			116			(521	)		899
Provision for income taxes		—			280			57			—			337
NET INCOME	$	562		$	462		$	59		$	(521	)	$	562
COMPREHENSIVE INCOME	$	543		$	444		$	187		$	(521	)	$	653

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CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Nine Months Ended February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	36,044		$	12,445		$	(353	)	$	48,136
OPERATING EXPENSES:
Salaries and employee benefits		112			13,289			3,840			—			17,241
Purchased transportation		—			6,836			4,600			(216	)		11,220
Rentals and landing fees		4			1,951			577			(6	)		2,526
Depreciation and amortization		1			1,958			334			—			2,293
Fuel		—			2,220			215			—			2,435
Maintenance and repairs		1			1,729			238			—			1,968
Intercompany charges, net		(325	)		298			27			—			—
Other		207			4,664			2,333			(131	)		7,073
		—			32,945			12,164			(353	)		44,756
OPERATING INCOME		—			3,099			281			—			3,380
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		3,445			39			—			(3,484	)		—
Interest, net		(396	)		35			(2	)		—			(363	)
Intercompany charges, net		403			(220	)		(183	)		—			—
Other, net		(7	)		88			(103	)		—			(22	)
INCOME BEFORE INCOME TAXES		3,445			3,041			(7	)		(3,484	)		2,995
Provision for income taxes		—			(573	)		123			—			(450	)
NET INCOME	$	3,445		$	3,614		$	(130	)	$	(3,484	)	$	3,445
COMPREHENSIVE INCOME	$	3,385		$	3,605		$	(3	)	$	(3,484	)	$	3,503

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CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Nine Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	33,175		$	11,628		$	(212	)	$	44,591
OPERATING EXPENSES:
Salaries and employee benefits		94			12,477			3,488			—			16,059
Purchased transportation		—			6,210			4,040			(81	)		10,169
Rentals and landing fees		4			1,902			524			(4	)		2,426
Depreciation and amortization		1			1,894			346			—			2,241
Fuel		—			1,819			224			—			2,043
Maintenance and repairs		1			1,544			220			—			1,765
Intercompany charges, net		(266	)		67			199			—			—
Other		166			4,230			2,163			(127	)		6,432
		—			30,143			11,204			(212	)		41,135
OPERATING INCOME		—			3,032			424			—			3,456
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,977			69			—			(2,046	)		—
Interest, net		(374	)		19			1			—			(354	)
Intercompany charges, net		376			(224	)		(152	)		—			—
Other, net		(2	)		(128	)		147			—			17
INCOME BEFORE INCOME TAXES		1,977			2,768			420			(2,046	)		3,119
Provision for income taxes		—			951			191			—			1,142
NET INCOME	$	1,977		$	1,817		$	229		$	(2,046	)	$	1,977
COMPREHENSIVE INCOME	$	1,921		$	1,781		$	156		$	(2,046	)	$	1,812

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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(3,537	)	$	4,664		$	25		$	10		$	1,162
INVESTING ACTIVITIES
Capital expenditures		—			(3,746	)		(248	)		—			(3,994	)
Business acquisitions, net of cash acquired		—			(44	)		—			—			(44	)
Proceeds from asset dispositions and other		(5	)		23			3			—			21
CASH USED IN INVESTING    ACTIVITIES		(5	)		(3,767	)		(245	)		—			(4,017	)
FINANCING ACTIVITIES
Proceeds from short-term borrowings, net		797			—			—			—			797
Net transfers from (to) Parent		807			(895	)		88			—			—
Payment on loan between subsidiaries		210			—			(210	)		—			—
Proceeds from debt issuances		1,481			—			—			—			1,481
Principal payments on debt		—			(17	)		(14	)		—			(31	)
Proceeds from stock issuances		284			—			—			—			284
Dividends paid		(402	)		—			—			—			(402	)
Purchase of treasury stock		(558	)		—			—			—			(558	)
Other, net		2			4			—			—			6
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		2,621			(908	)		(136	)		—			1,577
Effect of exchange rate changes on cash		(6	)		61			43			—			98
Net (decrease) increase in cash and cash equivalents		(927	)		50			(313	)		10			(1,180	)
Cash and cash equivalents at beginning of period		1,884			325			1,807			(47	)		3,969
Cash and cash equivalents at end of period	$	957		$	375		$	1,494		$	(37	)	$	2,789

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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(1,497	)	$	3,615		$	529		$	(2	)	$	2,645
INVESTING ACTIVITIES
Capital expenditures		—			(3,456	)		(334	)		—			(3,790	)
Proceeds from asset dispositions and other		85			16			22			—			123
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		85			(3,440	)		(312	)		—			(3,667	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		117			(148	)		31			—			—
Payment on loan between subsidiaries		36			(15	)		(21	)		—			—
Intercompany dividends		—			1			(1	)		—			—
Principal payments on debt		—			(33	)		(16	)		—			(49	)
Proceeds from debt issuances		1,190			—			—			—			1,190
Proceeds from stock issuances		265			—			—			—			265
Dividends paid		(319	)		—			—			—			(319	)
Purchase of treasury stock		(358	)		—			—			—			(358	)
Other, net		(8	)		(12	)		22			—			2
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		923			(207	)		15			—			731
Effect of exchange rate changes on cash		(10	)		7			(67	)		—			(70	)
Net (decrease) increase in cash and cash equivalents		(499	)		(25	)		165			(2	)		(361	)
Cash and cash equivalents at beginning of period		1,974			326			1,277			(43	)		3,534
Cash and cash equivalents at end of period	$	1,475		$	301		$	1,442		$	(45	)	$	3,173

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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 February 28, 2018, and the related condensed consolidated statements of income and comprehensive income for the three-month and nine-month periods ended February 28, 2018 and February 28, 2017 and the condensed consolidated statements of cash flows for the nine-month periods ended February 28, 2018 and February 28, 2017. 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

March 21, 2018

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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 7 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 facility services and cargo handling, temporary labor and security), insurance, professional fees, taxes and licenses and uniforms.

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 February 28:

	Three Months Ended						Percent				Nine Months Ended						Percent
	2018			2017			Change				2018			2017			Change
Revenues	$	16,526		$	14,997			10			$	48,136		$	44,591			8
Operating income:
FedEx Express segment		424			557			(24	)			1,574			1,873			(16	)
FedEx Ground segment		634			515			23				1,781			1,590			12
FedEx Freight segment		55			41			34				349			264			32
Eliminations, corporate and other		(112	)		(88	)		(27	)			(324	)		(271	)		(20	)
Consolidated operating income		1,001			1,025			(2	)			3,380			3,456			(2	)
Operating margin:
FedEx Express segment		4.5	%		6.5	%		(200	)	bp		5.7	%		7.3	%		(160	)	bp
FedEx Ground segment		12.1	%		11.0	%		110		bp		12.0	%		11.9	%		10		bp
FedEx Freight segment		3.2	%		2.7	%		50		bp		6.7	%		5.6	%		110		bp
Consolidated operating margin		6.1	%		6.8	%		(70	)	bp		7.0	%		7.8	%		(80	)	bp
Consolidated net income	$	2,074		$	562			269			$	3,445		$	1,977			74
Diluted earnings per share	$	7.59		$	2.07			267			$	12.63		$	7.31			73

	Change in Revenue						Change in Operating Income
	Three Months Ended			Nine Months Ended			Three Months Ended			Nine Months Ended
FedEx Express segment	$	801		$	1,705		$	(133	)	$	(299	)
FedEx Ground segment		534			1,393			119			191
FedEx Freight segment		202			461			14			85
FedEx Services segment		8			15			—			—
Eliminations, corporate and other		(16	)		(29	)		(24	)		(53	)
	$	1,529		$	3,545		$	(24	)	$	(76	)

Overview

Our operating income declined slightly in the third quarter of 2018 primarily due to significantly higher incentive compensation accruals (described below), higher peak-related costs at FedEx Express, increased TNT Express integration expenses and the negative impacts of inclement winter weather at FedEx Express. These factors were partially offset by increased yields and the favorable net impact of fuel at all of our transportation segments and volume growth at FedEx Ground and FedEx Freight. The NotPetya cyberattack (described below) also drove lower results in the nine months of 2018.

Net income for the third quarter and nine months of 2018 was positively impacted by a provisional benefit of $1.15 billion ($4.21 per diluted share) attributable to the enactment of the Tax Cuts and Jobs Act (“TCJA”), specifically related to the remeasurement of our net U.S. deferred tax liability. In addition, we recognized a one-time benefit of $204 million ($0.75 per diluted share) from a $1.5 billion contribution to our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”) in February 2018 and a benefit of $165 million ($0.60 per diluted share) related to a lower statutory income tax rate on fiscal 2018 year- to-date earnings. See the “Income Taxes” section below for further information.  

During the third quarter of 2018 we announced more than $3.2 billion in wage increases, bonuses, pension funding and expanded U.S. capital investment following the passage of the TCJA. In connection with this, during the third quarter of 2018 we made a pension funding contribution (noted above) and funded increases in performance-based incentive compensation plans. The incentive compensation adjustments made in the third quarter of 2018 include the year-to-date impact of the announced changes. Expenses related to wage increases will start to be recognized during the fourth quarter of 2018.  

We incurred TNT Express integration expenses totaling an aggregate of $106 million ($92 million, net of tax, or $0.34 per diluted share) in the third quarter of 2018, a $28 million increase from the third quarter of 2017. TNT Express integration expenses were an aggregate $341 million ($265 million, net of tax, or $0.97 per diluted share) in the nine months of 2018, a $137 million increase from

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the nine months 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, and include any restructuring charges at TNT Express. 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.

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. As of the second quarter of 2018, all of TNT Express’s critical operational systems were fully restored, critical business data was recovered and shipping services and solutions were back in place.

Our results for the first half of 2018 were negatively impacted by the NotPetya cyberattack by an estimated $400 million ($1.14 per diluted share for the nine months 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. In addition, we continued to experience lingering revenue impacts from the NotPetya cyberattack in the third quarter of 2018 in the form of lower volumes at TNT Express.

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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 10% in the third quarter and 8% in the nine months of 2018 due to improved performance at all of our transportation segments. Revenues at FedEx Express increased 9% in the third quarter and 7% in the nine months of 2018 due to improved base yields and favorable exchange rates, despite impacts from the NotPetya cyberattack discussed above. At FedEx Ground, revenues increased 11% in the third quarter and 10% in the nine months of 2018 due to volume growth and increased yields. FedEx Freight revenues increased 14% in the third quarter and 10% in the nine months 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 third quarter and nine months 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 February 28:

	Three Months Ended				Nine Months Ended
	2018		2017		2018		2017
Operating expenses:
Salaries and employee benefits	$	5,981	$	5,395	$	17,241	$	16,059
Purchased transportation		3,935		3,498		11,220		10,169
Rentals and landing fees		873		834		2,526		2,426
Depreciation and amortization		786		762		2,293		2,241
Fuel		914		735		2,435		2,043
Maintenance and repairs		628		588		1,968		1,765
Other		2,408		2,160		7,073		6,432
Total operating expenses	$	15,525	$	13,972	$	44,756	$	41,135
Operating income	$	1,001	$	1,025	$	3,380	$	3,456

	Percent of Revenue
	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Operating expenses:
Salaries and employee benefits		36.2	%		36.0	%		35.8	%		36.0	%
Purchased transportation		23.8			23.3			23.3			22.8
Rentals and landing fees		5.3			5.6			5.2			5.4
Depreciation and amortization		4.7			5.1			4.8			5.0
Fuel		5.5			4.9			5.1			4.6
Maintenance and repairs		3.8			3.9			4.1			4.0
Other		14.6			14.4			14.7			14.4
Total operating expenses		93.9			93.2			93.0			92.2
Operating margin		6.1	%		6.8	%		7.0	%		7.8	%

Operating margin declined in the third quarter of 2018 primarily as a result of significantly higher incentive compensation accruals, higher peak-related costs at FedEx Express, the negative impacts of inclement winter weather at FedEx Express and increased TNT Express integration expenses. The impacts of the NotPetya cyberattack discussed above also drove the operating margin decline in the nine months of 2018.

Salaries and employee benefits expense increased 11% in the third quarter and 7% in the nine months of 2018 primarily due to merit increases and significantly higher incentive compensation accruals at all of our transportation segments, unfavorable exchange rates at FedEx Express and higher staffing at FedEx Ground and FedEx Freight. Purchased transportation costs increased 12% in the third quarter and 10% in the nine months of 2018 primarily due to higher volumes at all of our transportation segments, unfavorable exchange rates at FedEx Express and increased rates and higher fuel expenses at FedEx Ground. Other expenses increased 11% in the third quarter of 2018 primarily due to unfavorable exchange rates, increased outside service contracts at FedEx Express and TNT Express integration expenses. Other expenses increased 10% in the nine months of 2018 due to these same factors as well as higher self-insurance reserves at FedEx Ground. Maintenance and repairs expense increased 12% in the nine months of 2018 primarily due to the timing of aircraft engine 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 third quarter and 19% in the nine months 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 third 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 third quarter and nine months 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

On December 22, 2017, the United States government enacted comprehensive tax legislation through the TCJA. The TCJA significantly changes the U.S. corporate income tax system including, among other things, lowering the statutory federal income tax rate from 35% to 21%, eliminating or reducing certain income tax deductions, and implementing a modified territorial tax system that includes a one-time transition tax on previously deferred foreign earnings. Due to our May 31 fiscal year end, the lower rate will be phased in, resulting in a U.S. statutory federal rate of 29.2% for 2018 and a 21% statutory federal rate for subsequent years.

In December 2017, the Securities and Exchange Commission (“SEC”) staff issued Staff Accounting Bulletin (“SAB”) 118, which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides for a measurement period of up to one year from the enactment date for companies to complete the accounting for the initial income tax effects of the TCJA. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting is complete and provide a provisional estimate (where determinable) of the income tax effects of the TCJA where the accounting is incomplete. The provisional estimate is required to be updated throughout the measurement period.  

As of February 28, 2018, we have not completed our initial accounting of the tax effects of the TCJA; however, where determinable, we have made an estimate of the effects on our existing deferred tax balances and the one-time transition tax. During the quarter, we recognized a provisional benefit of $1.15 billion related to the remeasurement of our net U.S. deferred tax liability and a provisional benefit of $36 million from foreign tax credits exceeding the one-time transition tax on previously deferred foreign earnings.

In addition to the provisional amounts above, we recognized a one-time benefit of $204 million from a $1.5 billion contribution to our U.S. Pension Plans in February 2018 and a benefit of $165 million related to a lower statutory income tax rate on fiscal 2018 year-to-date earnings.

The following table provides a reconciliation of the 2017 effective tax rates to the 2018 effective tax rates, including the impact of the TCJA, for the periods ended February 28:    

	Three Months Ended			Nine Months Ended
	2018			2018
2017 Effective Tax Rate		37.5	%		36.6	%
Remeasurement of net U.S. deferred tax liability		(131.5	)		(38.4	)
Effect of February 2018 pension contribution (a)		(23.3	)		(6.8	)
Lower statutory tax rate		(18.9	)		(5.5	)
Transition tax		(4.1	)		(1.2	)
Other (b)		3.0			0.3
2018 Effective Tax Rate		(137.3	)%		(15.0	)%

(a) The benefit is from the pension contribution deducted on our 2017 tax return at a tax rate of 35%.

(b) The 2018 tax rates were negatively impacted by the effect of the NotPetya cyberattack, changes in uncertain tax positions and tax rate impacts on changes in deferred tax items after the TCJA enactment and were favorably impacted from foreign tax credits associated with a second quarter dividend from foreign operations.

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 (“IRS”) 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 February 28, 2018, there were no material changes to our liabilities for unrecognized tax benefits subsequent to May 31, 2017.

See Note 5 of the accompanying unaudited condensed consolidated financial statements for further discussion related to income taxes.

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 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.

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Outlook

We expect yield and volume growth at all of our transportation segments to support revenue and earnings growth in the fourth quarter and full year of 2018, prior to any mark-to-market benefit plans adjustment. We expect to continue implementing various cost management plans at FedEx Ground for the remainder of 2018. Our fourth quarter and full-year 2018 results will be negatively affected by our TNT Express integration activities as well as increased compensation for certain of our hourly team members and higher incentive compensation for our salaried personnel. Our expectations for earnings growth in 2018 assumes moderate economic growth.

During the remainder of 2018, we will continue to execute our TNT Express integration plans. We expect the aggregate integration program expense, including restructuring charges at TNT Express, over the four years to be approximately $1.4 billion and expect to incur approximately $450 million of these costs during 2018. The timing and amount of integration expenses and capital investments in any future period may change as we implement our 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. In addition, a portion of our 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 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 and current accounting rules and tax laws. This target includes TNT Express synergies as well as base business and other operational improvements across the global FedEx Express network. Although we are targeting to complete our integration program by the end of 2020, we are investing in opportunities to improve the capabilities of the integrated business for future profitability, including periods beyond 2020.

As noted above, we recorded a provisional reduction to our net U.S. deferred tax liability during the third quarter of 2018 in connection with the recently enacted TCJA. The final impact of the TCJA on our reported results for fiscal year 2018 and beyond may differ from the estimates recorded, possibly materially, due to changes in interpretations and assumptions we have made, future guidance that may be issued, and other changes that may occur as we complete our analysis of the TCJA.  

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. The transition to the ISP model is being accomplished on a district-by-district basis and is expected to be completed in the second half of calendar 2020. As of February 28, 2018, 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” and  Part II, Item 1A “Risk Factors” for a discussion of these and other potential risks and uncertainties that could materially affect our future performance.

RECENT ACCOUNTING GUIDANCE

See Note 1 of the accompanying unaudited condensed consolidated financial statements for a discussion of recent accounting guidance.

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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)

Effective March 1, 2018, we realigned our specialty logistics and e-commerce solutions in a new organizational structure under FedEx Trade Networks, Inc. in the FedEx Express segment. The realignment allows us to improve our ability to deliver the capabilities of our specialty companies to customers. The new structure includes FedEx Custom Critical, FedEx Cross Border, FedEx Supply Chain, FedEx Trade Networks Transport & Brokerage and, effective June 1, 2018, a new company called FedEx Forward Depots. Prior period segment results will be recast to conform to current year presentation beginning in the fourth quarter of 2018.

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.

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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, including revised statistical information. The following tables compare revenues, operating expenses, operating income (dollars in millions), operating margin and operating expenses as a percent of revenue for the periods ended February 28:

	Three Months Ended						Percent				Nine Months Ended						Percent
	2018			2017			Change				2018			2017			Change
Revenues:
Package:
U.S. overnight box	$	1,836		$	1,742			5			$	5,373		$	5,173			4
U.S. overnight envelope		435			422			3				1,317			1,287			2
U.S. deferred		996			954			4				2,796			2,598			8
Total U.S. domestic package revenue		3,267			3,118			5				9,486			9,058			5
International priority		1,813			1,667			9				5,393			5,144			5
International economy		793			692			15				2,378			2,101			13
Total international export package revenue		2,606			2,359			10				7,771			7,245			7
International domestic(1)		1,128			1,033			9				3,386			3,136			8
Total package revenue		7,001			6,510			8				20,643			19,439			6
Freight:
U.S.		739			667			11				2,040			1,895			8
International priority		551			471			17				1,581			1,396			13
International economy		492			437			13				1,354			1,265			7
International airfreight		86			84			2				259			270			(4	)
Total freight revenue		1,868			1,659			13				5,234			4,826			8
Other(2)		501			400			25				1,499			1,406			7
Total revenues		9,370			8,569			9				27,376			25,671			7
Operating expenses:
Salaries and employee benefits		3,484			3,170			10				10,001			9,393			6
Purchased transportation		1,478			1,286			15				4,346			3,963			10
Rentals and landing fees		532			511			4				1,520			1,483			2
Depreciation and amortization		425			420			1				1,254			1,252			—
Fuel		782			633			24				2,088			1,753			19
Maintenance and repairs		420			386			9				1,327			1,158			15
Intercompany charges		528			473			12				1,521			1,403			8
Other		1,297			1,133			14				3,745			3,393			10
Total operating expenses		8,946			8,012			12				25,802			23,798			8
Operating income	$	424		$	557			(24	)		$	1,574		$	1,873			(16	)
Operating margin		4.5	%		6.5	%		(200	)	bp		5.7	%		7.3	%		(160	)	bp

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

⁽²⁾ Includes FedEx Trade Networks.

- 38 -

	Percent of Revenue
	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Operating expenses:
Salaries and employee benefits		37.2	%		37.0	%		36.5	%		36.6	%
Purchased transportation		15.8			15.0			15.9			15.4
Rentals and landing fees		5.7			6.0			5.6			5.8
Depreciation and amortization		4.5			4.9			4.6			4.9
Fuel		8.4			7.4			7.6			6.8
Maintenance and repairs		4.5			4.5			4.8			4.5
Intercompany charges		5.6			5.5			5.6			5.5
Other		13.8			13.2			13.7			13.2
Total operating expenses		95.5			93.5			94.3			92.7
Operating margin		4.5	%		6.5	%		5.7	%		7.3	%

The following table compares selected statistics (in thousands, except yield amounts) for the periods ended February 28:

	Three Months Ended				Percent			Nine Months Ended				Percent
	2018		2017		Change			2018		2017		Change
Package Statistics(1)
Average daily package volume (ADV):
U.S. overnight box		1,315		1,322		(1	)		1,249		1,286		(3	)
U.S. overnight envelope		541		549		(1	)		548		559		(2	)
U.S. deferred		1,026		1,025		—			946		904		5
Total U.S. domestic ADV		2,882		2,896		—			2,743		2,749		—
International priority		529		535		(1	)		525		522		1
International economy		266		253		5			265		250		6
Total international export ADV		795		788		1			790		772		2
International domestic(2)		2,445		2,471		(1	)		2,447		2,391		2
Total ADV		6,122		6,155		(1	)		5,980		5,912		1
Revenue per package (yield):
U.S. overnight box	$	22.53	$	21.24		6		$	22.64	$	21.17		7
U.S. overnight envelope		12.97		12.41		5			12.64		12.12		4
U.S. deferred		15.66		15.00		4			15.56		15.13		3
U.S. domestic composite		18.29		17.36		5			18.20		17.34		5
International priority		55.26		50.28		10			54.06		51.82		4
International economy		48.01		44.05		9			47.24		44.24		7
International export composite		52.83		48.27		9			51.77		49.37		5
International domestic(2)		7.44		6.74		10			7.29		6.90		6
Composite package yield		18.45		17.06		8			18.17		17.31		5
Freight Statistics(1)
Average daily freight pounds:
U.S.		8,757		8,458		4			8,311		8,231		1
International priority		5,430		5,238		4			5,342		5,145		4
International economy		13,209		12,578		5			12,215		12,095		1
International airfreight		1,757		1,995		(12	)		1,850		1,941		(5	)
Total average daily freight pounds		29,153		28,269		3			27,718		27,412		1
Revenue per pound (yield):
U.S.	$	1.36	$	1.27		7		$	1.29	$	1.21		7
International priority		1.64		1.45		13			1.56		1.43		9
International economy		0.60		0.56		7			0.58		0.55		5
International airfreight		0.78		0.68		15			0.74		0.73		1
Composite freight yield		1.02		0.95		7			0.99		0.93		6

⁽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.

- 39 -

FedEx Express Segment Revenues

FedEx Express segment revenues increased 9% in the third quarter and 7% in the nine months of 2018 primarily due to improved base yields, favorable exchange rates and higher fuel surcharges, despite impacts from the NotPetya cyberattack discussed above.

International export package yields increased 9% in the third quarter of 2018 due to higher fuel surcharges, favorable exchange rates and higher base rates. International export package yields increased 5% in the nine months of 2018 due to higher fuel surcharges and favorable exchange rates. International export average daily volumes increased 1% in the third quarter and 2% in the nine months of 2018 primarily due to increased international economy shipments. This benefit was partially offset by the decrease in volume due to the NotPetya cyberattack. U.S. domestic package yields increased 5% in the third quarter and nine months of 2018 primarily due to higher base rates and fuel surcharges. Freight yields increased 7% in the third quarter and 6% in the nine months of 2018 primarily due to higher base rates, favorable exchange rates and higher fuel surcharges. Average daily freight pounds increased 3% in the third quarter of 2018 primarily due to higher volume in international and U.S. freight services.

Our U.S. domestic and outbound fuel surcharge and the international fuel surcharges ranged as follows for the periods ended February 28:

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
U.S. Domestic and Outbound Fuel Surcharge:
Low		5.05	%		2.50	%		2.21	%		0.96	%
High		5.91			3.40			5.91			3.40
Weighted-average		5.56			2.97			4.31			2.30
International Fuel Surcharges:
Low		6.25			2.60			3.38			1.16
High		15.87			11.25			15.87			11.25
Weighted-average		12.24			8.21			10.53			7.48

Effective January 1, 2018, FedEx Express implemented a 4.9% average list price increase for U.S. domestic, U.S. export and U.S. import services. 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 and margin decreased in the third quarter of 2018 due to higher incentive compensation accruals, higher peak-related costs, increased TNT Express integration expenses, the negative impacts of inclement winter weather and unfavorable exchange rates, partially offset by yield growth and positive net impact of fuel. The NotPetya cyberattack discussed above also drove declining results in the nine months of 2018.

The NotPetya cyberattack had an estimated $400 million negative impact for the first half of 2018 with lingering impacts in the third quarter of 2018. Results also included $86 million of TNT Express integration expenses in the third quarter and $270 million in the nine months of 2018, a $33 million increase from the third quarter and $148 million increase from the nine months of 2017.

Salaries and employee benefits increased 10% in the third quarter and 6% in the nine months of 2018 primarily due to merit increases, unfavorable exchange rates and higher incentive compensation accruals. Purchased transportation increased 15% in the third quarter and 10% in the nine months of 2018 due to unfavorable exchange rates and increased international volume. Other expenses increased 14% in the third quarter and 10% in the nine months of 2018 primarily due to unfavorable exchange rates, increased outside service contracts and TNT Express integration expenses. Intercompany charges increased 12% in the third quarter of 2018 primarily due to higher incentive compensation accruals. Maintenance and repairs increased 15% in the nine months of 2018 primarily due to the timing of aircraft engine maintenance events.

Fuel expense increased 24% in the third quarter and 19% in the nine months of 2018 due to increased fuel prices. However, the net impact of fuel had a moderate benefit to operating income in the third quarter of 2018 and a significant benefit to operating income in the nine months 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.

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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 income (dollars in millions), operating margin, selected package statistics (in thousands, except yield amounts) and operating expenses as a percent of revenue for the periods ended February 28:

	Three Months Ended						Percent				Nine Months Ended						Percent
	2018			2017			Change				2018			2017			Change
Revenues:
FedEx Ground	$	4,824		$	4,296			12			$	13,586		$	12,202			11
FedEx Supply Chain		398			392			2				1,204			1,195			1
Total revenues		5,222			4,688			11				14,790			13,397			10
Operating expenses:
Salaries and employee benefits		956			834			15				2,711			2,420			12
Purchased transportation		2,235			2,015			11				6,194			5,568			11
Rentals		209			197			6				617			567			9
Depreciation and amortization		187			177			6				537			508			6
Fuel		4			3			33				10			8			25
Maintenance and repairs		82			83			(1	)			249			237			5
Intercompany charges		371			330			12				1,087			983			11
Other		544			534			2				1,604			1,516			6
Total operating expenses		4,588			4,173			10				13,009			11,807			10
Operating income	$	634		$	515			23			$	1,781		$	1,590			12
Operating margin		12.1	%		11.0	%		110		bp		12.0	%		11.9	%		10	bp
Average daily package volume
FedEx Ground		8,993			8,522			6				8,408			7,963			6
Revenue per package (yield)
FedEx Ground	$	8.64		$	8.12			6			$	8.49		$	8.05			5

	Percent of Revenue
	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Operating expenses:
Salaries and employee benefits		18.3	%		17.8	%		18.3	%		18.1	%
Purchased transportation		42.8			43.0			41.9			41.5
Rentals		4.0			4.2			4.2			4.2
Depreciation and amortization		3.6			3.7			3.6			3.8
Fuel		0.1			0.1			0.1			0.1
Maintenance and repairs		1.6			1.8			1.7			1.8
Intercompany charges		7.1			7.0			7.3			7.3
Other		10.4			11.4			10.9			11.3
Total operating expenses		87.9			89.0			88.0			88.1
Operating margin		12.1	%		11.0	%		12.0	%		11.9	%

FedEx Ground Segment Revenues

FedEx Ground segment revenues increased 11% in the third quarter and 10% in the nine months of 2018 due to volume growth and increased yields. Average daily volume at FedEx Ground increased 6% in the third quarter and nine months of 2018 primarily due to continued growth in our residential services. FedEx Ground yield increased 6% during the third quarter and 5% during the nine months of 2018 primarily driven by higher base rates and higher fuel surcharges.

- 41 -

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 February 28:

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Low		5.30	%		4.00	%		4.00	%		3.30	%
High		5.80			4.50			5.80			4.50
Weighted-average		5.50			4.10			5.00			3.90

Effective January 1, 2018, FedEx Ground announced a 4.9% average list price increase. In addition, as announced on September 18, 2017, dimensional weight pricing applies to the majority of 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.

FedEx Ground Segment Operating Income

FedEx Ground segment operating income increased 23% in the third quarter and 12% in the nine months of 2018 due to volume growth, increased yields and benefits associated with ongoing cost management. Higher purchased transportation, seasonal staffing and network expansion costs and higher incentive compensation accruals partially offset these benefits.

Purchased transportation expense increased 11% in the third quarter and nine months of 2018 primarily due to higher volumes, increased rates and higher fuel expenses. Salaries and employee benefits expense increased 15% in the third quarter and 12% in the nine months of 2018 due to additional staffing to support volume growth, higher incentive compensation accruals, network expansion and merit increases. Intercompany charges increased 12% in the third quarter and 11% in the nine months of 2018 primarily due to higher incentive compensation accruals. Other expenses increased 6% in the nine months of 2018 primarily due to higher self-insurance reserves. Rentals and depreciation and amortization expense increased 6% in the third quarter and 7% in the nine months 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.

- 42 -

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 income (dollars in millions), operating margin, selected statistics and operating expenses as a percent of revenue for the periods ended February 28:

	Three Months Ended						Percent				Nine Months Ended						Percent
	2018			2017			Change				2018			2017			Change
Revenues	$	1,694		$	1,492			14			$	5,208		$	4,747			10
Operating expenses:
Salaries and employee benefits		825			733			13				2,455			2,266			8
Purchased transportation		263			230			14				792			739			7
Rentals		41			36			14				114			101			13
Depreciation and amortization		77			69			12				219			199			10
Fuel		127			99			28				336			282			19
Maintenance and repairs		52			50			4				169			159			6
Intercompany charges		130			120			8				384			370			4
Other		124			114			9				390			367			6
Total operating expenses		1,639			1,451			13				4,859			4,483			8
Operating income	$	55		$	41			34			$	349		$	264			32
Operating margin		3.2	%		2.7	%		50		bp		6.7	%		5.6	%		110	bp
Average daily LTL shipments (in thousands)
Priority		69.7			65.6			6				73.5			70.3			5
Economy		30.6			29.0			6				31.5			30.9			2
Total average daily LTL shipments		100.3			94.6			6				105.0			101.2			4
Weight per LTL shipment (lbs)
Priority		1,232			1,179			4				1,205			1,173			3
Economy		1,133			1,155			(2	)			1,144			1,121			2
Composite weight per LTL shipment		1,202			1,172			3				1,187			1,157			3
LTL revenue per shipment
Priority	$	242.49		$	224.63			8			$	233.31		$	220.64			6
Economy		295.31			272.74			8				285.99			262.72			9
Composite LTL revenue per shipment	$	259.20		$	239.82			8			$	249.32		$	233.64			7
LTL yield (revenue per hundredweight)
Priority	$	19.67		$	19.06			3			$	19.37		$	18.81			3
Economy		26.07			23.61			10				24.99			23.44			7
Composite LTL yield	$	21.56		$	20.47			5			$	21.01		$	20.19			4

	Percent of Revenue
	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Operating expenses:
Salaries and employee benefits		48.7	%		49.1	%		47.1	%		47.7	%
Purchased transportation		15.5			15.4			15.2			15.6
Rentals		2.4			2.4			2.2			2.1
Depreciation and amortization		4.6			4.6			4.2			4.2
Fuel		7.5			6.6			6.5			5.9
Maintenance and repairs		3.1			3.4			3.2			3.4
Intercompany charges		7.7			8.1			7.4			7.8
Other		7.3			7.7			7.5			7.7
Total operating expenses		96.8			97.3			93.3			94.4
Operating margin		3.2	%		2.7	%		6.7	%		5.6	%

- 43 -

FedEx Freight Segment Revenues

FedEx Freight segment revenues increased 14% in the third quarter and 10% in the nine months of 2018 primarily due to higher LTL revenue per shipment and average daily LTL shipments. LTL revenue per shipment increased 8% in the third quarter and 7% in the nine months of 2018 primarily due to higher base rates driven by our ongoing yield management initiatives, higher fuel surcharges and higher weight per shipment. Average daily LTL shipments increased 6% in the third quarter and 4% in the nine months 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 February 28:

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Low		23.10	%		21.00	%		20.90	%		20.20	%
High		24.00			21.60			24.00			21.60
Weighted-average		23.59			21.40			22.46			20.80

Effective January 1, 2018, FedEx Freight implemented a 4.9% average increase in certain U.S. and other shipping rates. 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 third quarter and 32% in the nine months of 2018 primarily driven by higher LTL revenue per shipment. Salaries and employee benefits increased 13% in the third quarter and 8% in the nine months of 2018 driven primarily by higher staffing levels to support volume growth, higher incentive compensation accruals and merit increases. Purchased transportation increased 14% in the third quarter and 7% in the nine months of 2018 due to higher volumes and increased rates.

Fuel expense increased 28% in the third quarter and 19% in the nine months of 2018 due to higher fuel prices. The net impact of fuel had a moderate benefit to operating income in the third quarter and nine months of 2018 as higher fuel surcharges more than offset increased fuel prices.

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FINANCIAL CONDITION

LIQUIDITY

Cash and cash equivalents totaled $2.8 billion at February 28, 2018, compared to $4.0 billion at May 31, 2017. The following table provides a summary of our cash flows for the nine-month periods ended February 28 (in millions):

	2018			2017
Operating activities:
Net income	$	3,445		$	1,977
Noncash charges and credits		1,691			2,953
Gain from sale of investment		—			(35	)
Changes in assets and liabilities		(3,974	)		(2,250	)
Cash provided by operating activities		1,162			2,645
Investing activities:
Capital expenditures		(3,994	)		(3,790	)
Business acquisitions, net of cash acquired		(44	)		—
Proceeds from asset dispositions and other		21			123
Cash used in investing activities		(4,017	)		(3,667	)
Financing activities:
Proceeds from short-term borrowings, net		797			—
Principal payments on debt		(31	)		(49	)
Proceeds from debt issuances		1,481			1,190
Proceeds from stock issuances		284			265
Dividends paid		(402	)		(319	)
Purchase of treasury stock		(558	)		(358	)
Other		6			2
Cash provided by financing activities		1,577			731
Effect of exchange rate changes on cash		98			(70	)
Net decrease in cash and cash equivalents	$	(1,180	)	$	(361	)
Cash and cash equivalents at the end of period	$	2,789		$	3,173

Cash flows from operating activities decreased $1.5 billion in the nine months of 2018 primarily due to voluntary pension contributions, the payment of a previously accrued legal settlement and the NotPetya cyberattack. Capital expenditures increased during the nine months of 2018 primarily due to aircraft and related equipment purchases at FedEx Express, increased spending on facilities and other at all of our transportation segments and increased vehicle purchases at FedEx Freight, partially offset by lower spending related to package handling and ground support equipment at FedEx Ground. See “Capital Resources” for a discussion of capital expenditures during 2018 and 2017.

During the third quarter of 2018, we issued $1.5 billion of senior unsecured debt under our current shelf registration statement. We used the net proceeds for a voluntary incremental contribution in February 2018 to our U.S. Pension Plans. See Note 3 of the accompanying unaudited condensed consolidated financial statements for further discussion of this debt issuance.

During the third quarter of 2018, we issued commercial paper which provided us with additional short-term liquidity. As of February 28, 2018, we have $800 million of commercial paper outstanding. See Note 3 of the accompanying unaudited condensed consolidated financial statements for further discussion.

In January 2016, our Board of Directors authorized a share repurchase program of up to 25 million shares. During the third quarter of 2018, we repurchased 1.2 million shares of FedEx common stock at an average price of $248.73 per share for a total of $288 million. During the nine months of 2018, we repurchased 2.4 million shares of FedEx common stock at an average price of $232.00 per share for a total of $558 million. As of February 28, 2018, 13.6 million shares remained under the current 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.

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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.

The following table compares capital expenditures by asset category and reportable segment for the periods ended February 28 (in millions):

									Percent Change
									2018/2017
	Three Months Ended				Nine Months Ended				Three Months			NineMonths
	2018		2017		2018		2017		Ended			Ended
Aircraft and related equipment	$	591	$	284	$	1,631	$	1,319		108			24
Package handling and ground support equipment		207		295		621		819		(30	)		(24	)
Vehicles		237		219		748		737		8			1
Information technology		116		134		378		412		(13	)		(8	)
Facilities and other		221		177		616		503		25			22
Total capital expenditures	$	1,372	$	1,109	$	3,994	$	3,790		24			5
FedEx Express segment	$	860	$	479	$	2,316	$	2,034		80			14
FedEx Ground segment		227		387		974		1,127		(41	)		(14	)
FedEx Freight segment		198		152		397		360		30			10
FedEx Services segment		87		91		307		269		(4	)		14
Total capital expenditures	$	1,372	$	1,109	$	3,994	$	3,790		24			5

Capital expenditures increased during the nine months of 2018 primarily due to aircraft and related equipment purchases at FedEx Express, which included the delivery of ten Boeing 767-300 Freighter aircraft and three Boeing 777 Freighter (“B777F”) aircraft, increased spending on facilities and other at all of our transportation segments and increased vehicle purchases at FedEx Freight, partially offset by lower spending related to package handling and ground support equipment at FedEx Ground.

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 February 28, 2018 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. We are currently re-evaluating our permanent reinvestment strategy as a result of the TCJA and, as of the date of this filing, any deferred tax liability associated with a change of assertion is not expected to be material.

Our capital expenditures are expected to be approximately $5.8 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 $867 million for aircraft and aircraft-related equipment during the remainder of 2018. In addition, over multiple years, we will be investing over $1.5 billion to significantly expand the FedEx Express Indianapolis hub and over $1 billion to modernize and expand the Memphis SuperHub.

During the quarter, FedEx Express entered into an agreement to accelerate the delivery of two B777F aircraft from 2021 to 2020, one B777F aircraft from 2021 to 2019, and one B777F aircraft from 2022 to 2020.

Upon maturity of commercial paper during the fourth quarter of 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.

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

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During the quarter, we amended our five-year revolving credit facility to increase the aggregate amount available under the facility from $1.75 billion to $2.0 billion. The facility expires in November 2020. See Note 3 of the accompanying unaudited condensed consolidated financial statements for a description of the terms and significant covenants of our revolving credit facility.

During the nine months of 2018, we have made contributions totaling $2.5 billion to our U.S. Pension Plans, of which $22 million were required. We do not expect to make any additional contributions to our U.S. Pension Plans during the fourth quarter of 2018. Our U.S. Pension Plans have ample funds to meet expected benefit payments.

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 February 28, 2018. 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 February 28, 2018. 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	$	632	$	2,408	$	2,115	$	1,878	$	1,695	$	9,193	$	17,921
Non-capital purchase obligations and other		254		794		683		480		304		2,925		5,440
Interest on long-term debt		104		607		543		531		531		9,877		12,193
Quarterly contributions to our U.S. Pension    Plans		—		—		—		—		—		—		—
Investing activities:
Aircraft and aircraft-related capital    commitments		492		1,717		1,868		1,162		1,310		890		7,439
Other capital purchase obligations		73		3		1		2		1		7		87
Financing activities:
Debt		3		1,367		1,015		—		—		14,500		16,885
Total	$	1,558	$	6,896	$	6,225	$	4,053	$	3,841	$	37,392	$	59,965

⁽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 8 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 February 28, 2018.

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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 ($49 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 ($32 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.

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.

We had $922 million in deposits and progress payments as of February 28, 2018 on aircraft purchases and other planned aircraft-related transactions.

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 February 28, 2018, 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 to the financial statements included in 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.

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FORWARD-LOOKING STATEMENTS

Certain statements in this report, including (but not limited to) those contained in “Income Taxes,” “Outlook,” “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;

• 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;

• future guidance and interpretations relating to the recently enacted TCJA and our ability to realize the benefits of certain provisions of the TCJA;

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

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• 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.

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.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of February 28, 2018, there were 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 nine months of 2018, the U.S. dollar weakened relative to the currencies of the foreign countries in which we operate, as compared to May 31, 2017, and this weakening 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 February 28, 2018 (the end of the period covered by this Quarterly Report on Form 10-Q).

During our fiscal quarter ended February 28, 2018, 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 9 of the accompanying unaudited condensed consolidated financial statements.

Item 1A. Risk Factors

Other than the risk factors 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.

A significant data breach or other disruption to our technology infrastructure could disrupt our operations and result in the loss of critical confidential information, adversely impacting our reputation, business or results of operations. Our ability to attract and retain customers, to efficiently operate our businesses, and to compete effectively depends in part upon the sophistication and reliability of our technology network, including our ability to provide features of service that are important to our customers, to protect our confidential business information and the information provided by our customers, and to maintain customer confidence in our ability to protect our systems and to provide services consistent with their expectations. We are subject to risks imposed by data breaches and operational disruptions, particularly through cyber-attack or cyber-intrusion, including by computer hackers, foreign governments and cyber terrorists. Data breaches of companies and governments have increased in recent years as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Additionally, risks such as code anomalies, “Acts of God,” transitional challenges in migrating operating company functionality to our FedEx enterprise automation platform, data leakage and human error pose a direct threat to our products, services and data and could result in unauthorized access to sensitive or confidential data regarding our operations, customers, employees, and suppliers, including personal information.

We also use technology and systems from third-party service providers, including cloud service providers, for a variety of reasons and such providers may have access to information we maintain about our company, customers, employees and vendors or operate systems that are critical to our business operations and services. Like us, our third-party service providers are subject to risks imposed by data breaches and cyber-attacks. We have security processes, protocols and standards in place, including contractual provisions requiring such security measures, that are applicable to our service providers and are designed to protect information that is held by them, or to which they have access, as a result of their engagements with us. Nevertheless, a cyber-attack could defeat one or more of our third-party service providers’ security measures, allowing an attacker to obtain information about our company, customers, employees and vendors or disrupt our operations. Our third-party service providers may also experience operational disruptions or human error that could result in unauthorized access to sensitive or confidential data regarding our operations, customers, employees and suppliers, including personal information.

Any disruption to our complex, global technology infrastructure, including those impacting our computer systems and websites, could result in the loss of confidential business or customer information, adversely impact our operations, customer service, volumes and revenues, or could lead to litigation or investigations, resulting in significant costs. These types of adverse impacts could also occur in the event the confidentiality, integrity or availability of company and customer information was compromised due to a data loss by FedEx or a trusted third party. Recently, there has also been heightened regulatory and enforcement focus on data protection in the U.S. and abroad, and failure to comply with applicable U.S. or foreign data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our reputation and adversely impact our business, results of operations and financial condition.

We have invested and continue to invest in technology security initiatives, information technology risk management and disaster recovery plans. The development and maintenance of these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly more sophisticated. Despite our efforts, we are not fully insulated from data breaches, technology disruptions or data loss, which could adversely impact our competitiveness and results of operations. For instance, in May 2017 FedEx was one of many companies attacked by the rapidly spreading ransomware described as WannaCry that exploited vulnerability in Microsoft Windows and infected computers using that program, encrypting files and holding them for ransom. Additionally, during the third quarter of 2018 we discovered an unsecured server hosted by one of our third-party cloud service providers, which exposed some archived account information related to a service discontinued after our 2015 acquisition of Bongo International, LLC. The server has been secured, and we have found no indication that any information has been misappropriated in connection with the incident. Neither incident caused a material disruption to our systems or resulted in any material costs to FedEx. In addition, in June 2017 TNT Express worldwide operations were significantly affected due to the infiltration of an information technology virus known as NotPetya, as further described in the following risk factor.

While we have significant security processes and initiatives in place, we may be unable to detect or prevent a material breach or disruption in the future.

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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 or sustained lower volumes from pre-existing customers;

• 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.

We could be subject to adverse changes in regulations and interpretations or challenges to our tax positions relating to the Tax Cuts and Jobs Act. We are subject to taxation in the U.S. and numerous foreign jurisdictions. From time to time, changes in tax laws or regulations may be proposed or enacted that could significantly affect our overall tax liability. For example, on December 22, 2017, the United States government enacted comprehensive tax legislation through the TCJA, which significantly changes the U.S. corporate income tax system. The TCJA requires complex computations to be performed that were not previously required in U.S. tax law, significant judgments, estimates and calculations to be made in interpreting its provisions, and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue guidance on how provisions of the TCJA will be applied or otherwise administered that is different from our interpretation. In addition, further legislative action could be taken to address questions or issues caused by the TCJA. As we complete our analysis of the TCJA, collect and prepare necessary data, and interpret any additional guidance, we may make adjustments to provisional amounts that we have recorded that may adversely impact our results of operations and financial condition. Additionally, state and foreign governments may enact tax laws in response to the TCJA or other global initiatives that could result in further changes to our taxation and adversely impact our results of operations and financial condition.

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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 third 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
Dec. 1-31, 2017		195,000	$	241.14		195,000		14,580,000
Jan. 1-31, 2018		272,800		266.12		272,800		14,307,200
Feb. 1-28, 2018		690,000		244.00		690,000		13,617,200
Total		1,157,800	$	248.73		1,157,800

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 March 20, 2018, 13.2 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.

- 54 -

Item 6. Exhibits

Exhibit Number	Description of Exhibit
4.1	Indenture, dated as of October 23, 2015, between FedEx, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee. (Filed as Exhibit 4.1 to FedEx’s Current Report on Form 8-K dated and filed October 23, 2015, and incorporated herein by reference.)
4.2	Supplemental Indenture No. 5, dated as of January 31, 2018, between FedEx, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee. (Filed as Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed January 31, 2018, and incorporated herein by reference.)
4.3	Form of 3.400% Note due 2028. (Included in Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed January 31, 2018, and incorporated herein by reference.)
4.4	Form of 4.050% Note due 2048. (Included in Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed January 31, 2018, and incorporated herein by reference.)
10.1	Amendment dated December 8, 2017 (but effective as of August 28, 2017), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and FedEx Express (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 December 8, 2017 (but effective as of November 27, 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 December 8, 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.
10.4	Amendment dated January 8, 2018 (but effective as of January 1, 2018), 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 January 11, 2018 (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.
10.6	Amendment dated January 26, 2018 (but effective as of November 27, 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 February 16, 2018 (but effective as of January 29, 2018), 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	Supplemental Agreement No. 28 (and related side letter) dated as of January 26, 2018, amending the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006, between The Boeing Company and FedEx Express (the “Boeing 777 Freighter Purchase Agreement”). Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.9	Supplemental Agreement No. 29 (and related side letters) dated as of February 2, 2018, amending the Boeing 777 Freighter Purchase Agreement. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.10	First Amendment dated as of January 26, 2018, between FedEx and JPMorgan Chase Bank, N.A., as administrative agent, amending the Five-Year Credit Agreement dated as of November 13, 2015, among FedEx, JPMorgan Chase Bank, N.A., individually and as administrative agent, and certain lenders.
12.1	Computation of Ratio of Earnings to Fixed Charges.
15.1	Letter re: Unaudited Interim Financial Statements.

- 55 -

Exhibit Number	Description of Exhibit
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.

- 56 -

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: March 21, 2018	/s/ JOHN L. MERINO
	JOHN L. MERINO
	CORPORATE VICE PRESIDENT AND
	PRINCIPAL ACCOUNTING OFFICER

- 57 -

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
4.1	Indenture, dated as of October 23, 2015, between FedEx, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee. (Filed as Exhibit 4.1 to FedEx’s Current Report on Form 8-K dated and filed October 23, 2015, and incorporated herein by reference.)
4.2	Supplemental Indenture No. 5, dated as of January 31, 2018, between FedEx, the Guarantors named therein and Wells Fargo Bank, National Association, as trustee. (Filed as Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed January 31, 2018, and incorporated herein by reference.)
4.3	Form of 3.400% Note due 2028. (Included in Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed January 31, 2018, and incorporated herein by reference.)
4.4	Form of 4.050% Note due 2048. (Included in Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed January 31, 2018, and incorporated herein by reference.)
10.1	Amendment dated December 8, 2017 (but effective as of August 28, 2017), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and FedEx Express (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 December 8, 2017 (but effective as of November 27, 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 December 8, 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.
10.4	Amendment dated January 8, 2018 (but effective as of January 1, 2018), 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 January 11, 2018 (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.
10.6	Amendment dated January 26, 2018 (but effective as of November 27, 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 February 16, 2018 (but effective as of January 29, 2018), 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	Supplemental Agreement No. 28 (and related side letter) dated as of January 26, 2018, amending the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006, between The Boeing Company and FedEx Express (the “Boeing 777 Freighter Purchase Agreement”). Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.9	Supplemental Agreement No. 29 (and related side letters) dated as of February 2, 2018, amending the Boeing 777 Freighter Purchase Agreement. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Exchange Act.
10.10	First Amendment dated as of January 26, 2018, between FedEx and JPMorgan Chase Bank, N.A., as administrative agent, amending the Five-Year Credit Agreement dated as of November 13, 2015, among FedEx, JPMorgan Chase Bank, N.A., individually and as administrative agent, and certain lenders.
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.

E-1

Exhibit Number	Description of Exhibit
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-2

EX-10.1

Exhibit 10.1

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

2. AMENDMENT/MODIFICATION NO. 111	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) 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   12-7-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 12/8/17

* 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/111 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 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.

September 17 Operating Period

Charter Request and Accounting

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

Adhoc Charters

Total Charters

EWR

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

Week 1 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

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

Adhoc Charters

Total Charters

LAX

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

OAK

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR / stage

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

PHL

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-310

[*]

[*]

[*]

PHX

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SEA

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SLC

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

IAD

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

LAX

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

LAX

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

EWR / stage

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

EWR

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

MEM-JAX

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

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

Adhoc Charters

Total Charters

EWR-SJU

Mon

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

EWR / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

Week 3 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

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

Adhoc Charters

Total Charters

EWR / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

Week 4 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

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

Adhoc Charters

Total Charters

EWR / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

Week 5 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

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-10.2

Exhibit 10.2

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

2. AMENDMENT/MODIFICATION NO. 112	3. EFFECTIVE DATE   11/27/2017	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 Decrease:      [*]

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

(x)	A. THIS CHANGE BY CLAUSE IS ISSUED PURSUANT TO: (Specify clause) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
☒		Monthly Fuel Adjustment
☐	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 November 27, 2017 to December 31, 2017 (Operating Period 51) 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   12-7-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 12/8/17

* 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/112 AWARD/ EFFECTIVE DATE     11/27/2017 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 a decrease of [*]. TIERS: 6 - 8 TIER 6: From: [*] per cubic foot To: [*] per cubic foot This is a decrease of [*]. TIER 7: From: [*] per cubic foot To: [*] per cubic foot This is a decrease of [*]. TIER 8: From: [*] per cubic foot To: [*] per cubic foot This is a decrease 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/112 AWARD/ EFFECTIVE DATE     11/27/2017 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-10.3

Exhibit 10.3

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

2. AMENDMENT/MODIFICATION NO. 113		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.
☐
☐	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 49 (October) 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   12-7-17	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 12/8/17

* 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/113 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
	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.

October 17 Operating Period

Charter Request and Accounting

Week 1

Origin

Operating Day

Cubic Feet   Requested

Mon (10/02)

Tue (10/03)

Wed (10/04)

Thu (10/05)

Fri (10/06)

Sat (10/07)

Sun (10/08)

Weekly Total

A/C Type     Equivalent

Rate

Adhoc Charters

Total Charters

MEM-SJU

Mon, Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

MEM-EWR-MEM

Mon, Wed, Thu, Fri, Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

EWR / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

IAD

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

OAK

Tue, Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

SLC / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

MEM-EWR-MEM

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

OAK

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

Week 1 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 2

Origin

Operating Day

Cubic Feet   Requested

Mon (10/09)

Tue (10/10)

Wed (10/11)

Thu (10/12)

Fri (10/13)

Sat (10/14)

Sun (10/15)

Weekly Total

A/C Type     Equivalent

Rate

Adhoc Charters

Total Charters

MEM-EWR-MEM

Mon, Thu, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

MEM-SJU

Tue, Wed, Thu, Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

EWR / stage

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

IAD

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

OAK

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SLC / stage

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

LAX

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

OAK

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

MEM-SJU

Sat, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

Week 2 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3

Origin

Operating Day

Cubic Feet   Requested

Mon (10/16)

Tue (10/17)

Wed (10/18)

Thu (10/19)

Fri (10/20)

Sat (10/21)

Sun (10/22)

Weekly Total

A/C Type     Equivalent

Rate

Adhoc Charters

Total Charters

MEM-SJU

Mon, Thu, Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

MEM-SJU

Mon, Tue, Thu, Fri, Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

MEM-SJU

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

MEM-EWR-MEM

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

EWR-SJU

Fri, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

MEM-EWR-MEM

Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

LAX

Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

Week 3 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 4

Origin

Operating Day

Cubic Feet   Requested

Mon (10/23)

Tue (10/24)

Wed (10/25)

Thu (10/26)

Fri (10/27)

Sat (10/28)

Sun (10/29)

Weekly Total

A/C Type     Equivalent

Rate

Adhoc Charters

Total Charters

MEM-SJU

Mon, Tue, Wed, Sat, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

EWR-SJU

Mon, Tue, Wed, Thu, Fri, Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

IAD

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR / stage

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

MEM-EWR-MEM

Wed, Fri, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

Week 4 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

October 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. 114	3. EFFECTIVE DATE   01/01/2018	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 January 1, 2018 to January 28, 2018 (Operating Period 52) 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   1-3-18	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 1/8/18

* 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/114 AWARD/ EFFECTIVE DATE     01/01/2018 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/114 AWARD/ EFFECTIVE DATE     01/01/2018 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. 115	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.
☐
☐	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 50 (November) 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   1-8-18	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 1/11/18

* 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/115 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
	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.

November 17 Operating Period

Charter Request and Accounting

Week 1

Origin

Operating Day

Cubic Feet   Requested

Mon (10/30)

Tue (10/31)

Wed (11/01)

Thu (11/02)

Fri (11/03)

Sat (11/04)

Sun (11/05)

Weekly Total

A/C Type     Equivalent

Rate

Adhoc Charters

Total Charters

MEM-SJU

Mon, Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

EWR-SJU

Mon-Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

MEM-EWR-MEM

Wed, Fri, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

EWR / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

IAD

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

MEM-HNL-MEM

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

Week 1 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 2

Origin

Operating Day

Cubic Feet Requested

Mon (11/06)

Tue (11/07)

Wed (11/08)

Thu (11/09)

Fri (11/10)

Sat (11/11)

Sun (11/12)

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

EWR-SJU

Tue, Thu, Fri, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

SLC / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

MEM-SJU

Wed, Fri, Sat, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

LAX

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

Week 2 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 3

Origin

Operating Day

Cubic Feet Requested

Mon (11/13)

Tue (11/14)

Wed (11/15)

Thu (11/16)

Fri (11/17)

Sat (11/18)

Sun (11/19)

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

EWR / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SLC / stage

Tue, Wed, Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

EWR-SJU

Tue, Thu, Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

LAX

Tue, Thu, Fri, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SEA

Wed, Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

OAK

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

LAX

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

MEM-HNL-MEM

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

SEA

Fri, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

MEM-SJU

Wed, Fri, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

LAX

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

Week 3 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 4

Origin

Operating Day

Cubic Feet Requested

Mon (11/20)

Tue (11/21)

Wed (11/22)

Thu (11/23)

Fri (11/24)

Sat (11/25)

Sun (11/26)

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

OAK

Mon, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

LAX

Mon, Tue, Fri, Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

SLC / stage

Tue, Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

OAK

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

EWR / stage

Tue, Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

EWR / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

DEN

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SEA

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

PHX / stage

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

MEM-SJU

Tue, Wed, Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

LAX

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

LAX

Fri, Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

IAD / stage

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

TPA / stage

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-310

[*]

[*]

[*]

OAK

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

EWR

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

SLC / stage

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

SEA

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

MEM-HNL-MEM

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

EWR

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

TPA / stage

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

MIA

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

LAX

Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

767

[*]

[*]

[*]

EWR

Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

PHX

Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

Week 4 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

November 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. 116	3. EFFECTIVE DATE   11/27/2017	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 51 (December) 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)     Ronald D. Stevens, Vice President		16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)     Brian Mckain
15B. CONTRACTOR/OFFEROR /s/ RONALD D. STEVENS (Signature of person authorized to sign)	15C. DATE SIGNED   1-25-18	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 1/26/18

* 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/116 AWARD/ EFFECTIVE DATE     11/27/2017 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.

December 17 Operating Period

Charter Request and Accounting

Week 1

Origin

Operating Day

Cubic Feet Requested

Mon (11/27)

Tue (11/28)

Wed (11/29)

Thu (11/30)

Fri (12/01)

Sat (12/02)

Sun (12/03)

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

SLC / stage

Tue

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

SLC / stage

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

757

[*]

[*]

[*]

Week 1 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 2

Origin

Operating Day

Cubic Feet Requested

Mon (12/04)

Tue (12/05)

Wed (12/06)

Thu (12/07)

Fri (12/08)

Sat (12/09)

Sun (12/10)

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

0

$-

$-

Week 2 Total

0

0

0

0

0

0

0

0

$-

$-

0

0

0

0

0

0

0

0

Week 3

Origin

Operating Day

Cubic Feet Requested

Mon (12/11)

Tue (12/12)

Wed (12/13)

Thu (12/14)

Fri (12/15)

Sat (12/16)

Sun (12/17)

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

LAX

Mon

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

LAX

Mon

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

SMF / stage

Thu

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

SJU

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

LAX

Sat

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

Week 3 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 4

Origin

Operating Day

Cubic Feet Requested

Mon (12/18)

Tue (12/19)

Wed (12/20)

Thu (12/21)

Fri (12/22)

Sat (12/23)

Sun (12/24)

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

SLC / stage

Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

Week 4 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Week 5

Origin

Operating Day

Cubic Feet Requested

Mon (12/25)

Tue (12/26)

Wed (12/27)

Thu (12/28)

Fri (12/29)

Sat (12/30)

Sun (12/31)

Weekly Total

A/C Type Equivalent

Rate

Adhoc Charters

Total Charters

SLC / stage

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

PHX

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

OAK

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

LAX

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

EWR

Wed

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

MIA

Fri

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

A-300

[*]

[*]

[*]

MEM-SJU

Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-11

[*]

[*]

[*]

MIA / stage

Sun

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

MD-10

[*]

[*]

[*]

Week 5 Total

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

December 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	3

2. AMENDMENT/MODIFICATION NO. 117	3. EFFECTIVE DATE   01/29/2018	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 16, 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 January 29, 2018 to February 25, 2018 (Operating Period 53) 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   2-9-18	16B. CONTRACT AUTHORITY /s/ BRIAN MCKAIN (Signature of Contracting Officer)	16C. DATE SIGNED 2/16/18

* 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/117 AWARD/ EFFECTIVE DATE     01/29/2018 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/117 AWARD/ EFFECTIVE DATE     01/29/2018 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-10.8

Exhibit 10.8

FedEx contract #07-0255-039

Supplemental Agreement No. 28

to

Purchase Agreement No. 3157

between

The Boeing Company

And

Federal Express Corporation

Relating to Boeing Model 777-FREIGHTER Aircraft

THIS SUPPLEMENTAL AGREEMENT No. 28 (SA-28), entered into as of the 26th day of January 2018, 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-28 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-28 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 reflect the changes made by this Supplemental Agreement No. 28.

* 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–28
	BOEING PROPRIETARY

2. Boeing and Customer agree that upon execution of this Supplemental Agreement No. 28 the SA-28 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 resulting from the reschedule of the SA-28 Accelerated Block B Aircraft.

4. Add Letter Agreement 6-1162-LKJ-0768, Special Matters – SA-28 Accelerated Block B Aircraft, attached hereto, to reflect [*] to be provided in consideration of the acceleration of the SA-28 Accelerated Block B Aircraft.

5. [*]

6. This Supplemental Agreement No. 28 to the Purchase Agreement shall not be effective unless executed and delivered by the parties on or prior to January 31, 2018.

* 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–28
	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/ Mark D. Yerger
Its:	Attorney-In-Fact	Its:	Vice President

P.A. No. 3157	3	SA–28
	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		28
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–28
	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–28
	BOEING PROPRIETARY

LETTER AGREEMENT		SA NUMBER
6-1162-LKJ-0726	[*] SA-24 Accelerated Block B Aircraft	24
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
6-1162-LKJ-0768	Special Matters – SA-28 Accelerated Aircraft	28

* 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–28
	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–28
	BOEING PROPRIETARY

Supplemental Agreement No. 26	February 10, 2017
Supplemental Agreement No. 27	October 12, 2017
Supplemental Agreement No. 28	January     , 2018

P.A. No. 3157	8	SA–28
	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	[*]	40674		[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40675		[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40684	SA-24 Accelerted Block B Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40683	SA-28 Accelerated Block B Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40685	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, 108205		Supplemental Agreement No. 28
	BOEING PROPRIETARY

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

FedEx contract # 07-0255-M    

6-1162-LKJ-0768

Federal Express Corporation

3131 Democrat Road

Memphis, TN 38125

Subject:	Special Matters – SA-28 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-28 Accelerated Block B Aircraft as defined in Supplemental Agreement No. 28 to the Purchase Agreement (SA-27).

1. [*]

In consideration of the SA-28 Accelerated Block B Aircraft, Boeing will provide Customer, the following [*] in accordance with the reference (b) letter agreement, except as otherwise set forth below.

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-28 Accelerated Block B Aircraft.

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-28 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.

* 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-0768		Page 1
Special Matters – SA-28 Accelerated Block B Aircraft		SA-28
	BOEING PROPRIETARY

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.

6-1162-LKJ-0768		Page 2
Special Matters – SA-28 Accelerated Block B Aircraft		SA-28
	BOEING PROPRIETARY

Very truly yours,

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

    ACCEPTED AND AGREED TO this

    Date: January 26, 2018

FEDERAL EXPRESS CORPORATION
By	/s/ Mark D. Yerger
Its	Vice President

6-1162-LKJ-0768		Page 3
Special Matters – SA-28 Accelerated Block B Aircraft		SA-28
	BOEING PROPRIETARY

EX-10.9

Exhibit 10.9

FedEx contract # 07-0255-038

Supplemental Agreement No. 29

to

Purchase Agreement No. 3157

between

The Boeing Company

And

Federal Express Corporation

Relating to Boeing Model 777-FREIGHTER Aircraft

THIS SUPPLEMENTAL AGREEMENT No. 29 (SA-29), entered into as of the 2^nd day of February 2018, 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 three (3) Block B Aircraft (SA-29 Accelerated Block B Aircraft) and one (1) Block C Aircraft (SA-29 Accelerated Block C Aircraft), (collectively, SA-29 Accelerated Aircraft), as shown in the table below.

Aircraft Block	MSN	Table	Existing Delivery Month of Aircraft	Revised Delivery Month of Aircraft
C	41750	Table 1-C2	[*]	[*]
B	40671	Table 1-B	[*]	[*]
B	40672	Table 1-B	[*]	[*]
B	40682	Table 1-B	[*]	[*]

C. WHEREAS, Boeing and Customer agree that the SA-29 Accelerated Block B Aircraft will become firm Block B Aircraft upon execution of this Supplemental Agreement No. 29 as a result of the reschedule described in Recital Paragraph B above in accordance with the terms of Letter Agreement 6-1162-RRO-1068, Special Provision – Block B Aircraft, due to [*] provision relating to such Block B Aircraft.

D. WHEREAS, Boeing has agreed to provide additional commercial considerations for the SA-29 Accelerated 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.

P.A. No. 3157	1	SA–29
	BOEING PROPRIETARY

E. WHEREAS, Boeing has agreed to provide certain additional commercial considerations for [*].

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 reflect the changes made by this Supplemental Agreement No. 29.

2. Boeing and Customer agree that upon execution of this Supplemental Agreement No. 29 (i) the SA-29 Accelerated Aircraft are hereby rescheduled as described in Recital Paragraph B above and (ii) the SA-29 Accelerated Block B Aircraft will be firm Block B Aircraft in accordance with Recital Paragraph C above.

3. Remove and replace, in its entirety, “Table 1-A”, with the revised Table 1-A, attached hereto, revised to reflect (i) the addition of the SA-29 Accelerated Block B Aircraft as firm Block B Aircraft, and (ii) the revised delivery month(s) and [*], Advance Payment Base Price(s) and Advance Payments resulting from the reschedule of the SA-29 Accelerated Block B Aircraft.

4. Remove and replace, in its entirety, “Table 1-B”, with the revised Table 1-B, attached hereto, revised to reflect removal of the SA-29 Accelerated Block B Aircraft.

5. Remove and replace, in its entirety, “Table 1-C2”, with the revised Table 1-C2, attached hereto, revised to reflect the revised delivery month and [*], Advance Payment Base Price and Advance Payments resulting from the reschedule of the SA-29 Accelerated Block C Aircraft.

6. Remove and replace, in its entirety, Letter Agreement 6-1162-LKJ-0737, Special Matters – SA-26 Accelerated Block C Aircraft, with Letter Agreement 1162-LKJ-0737R1, Special Matters – SA-26 Accelerated Block C Aircraft, revised to [*], such right having been superseded by the commitments in this Supplemental Agreement No. 29.

* 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–29
	BOEING PROPRIETARY

7. Add Letter Agreement 6-1162-LKJ-0766, Special Matters – SA-29 Accelerated Aircraft, attached hereto, to reflect additional commercial considerations to be provided for the SA-29 Accelerated Aircraft.

8. Add Letter Agreement 6-1162-LKJ-0767, Special Considerations – SA-29, attached hereto, to reflect additional commercial considerations to be provided in consideration of Supplemental Agreement No. 29.

9. As a result of the changes incorporated in this Supplemental Agreement No. 29, Customer will owe a payment to Boeing in an amount equal to [*] (SA-29 Payment Amount). Customer will pay Boeing such SA-29 Payment Amount within three (3) business days of executing this Supplemental Agreement No. 29.

10. This Supplemental Agreement No. 29 to the Purchase Agreement shall not be effective unless executed and delivered by the parties on or prior to February 2, 2018.

* 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	3	SA–29
	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/ Phillip C. Blum
Its:	Attorney-In-Fact	Its:	VP Aircraft Acquisitions & Planning and Performance

P.A. No. 3157	4	SA–29
	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		29
1B	Block B Conditional Firm Aircraft Information Table		29
1C	Block C Aircraft Information Table		13
1C1	Block C Aircraft Information Table (MSN 39285)		11
1C2	Block C Aircraft Information Table		29
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	5	SA–29
	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	6	SA–29
	BOEING PROPRIETARY

LETTER AGREEMENT		SA NUMBER
6-1162-LKJ-0726	[*]	24
	SA-24 Accelerated Block B Aircraft
6-1162-LKJ-0737R1	Special Matters – SA-26 Accelerated Block C Aircraft	29
6-1162-LKJ-0758	Special Matters – SA-27 Accelerated Block B Aircraft	27
6-1162-LKJ-0768	Special Matters – SA-28 Accelerated Aircraft	28
6-1162-LKJ-0766	Special Matters – SA-29 Accelerated Aircraft	29
6-1162-LKJ-0767	Special Considerations – SA-29	29

* 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	7	SA–29
	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	8	SA–29
	BOEING PROPRIETARY

Supplemental Agreement No. 26	February 10, 2017
Supplemental Agreement No. 27	October 12, 2017
Supplemental Agreement No. 28	January 26, 2018
Supplemental Agreement No. 29	February     , 2018

P.A. No. 3157	9	SA–29
	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	[*]	40674		[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40675		[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40684	SA-24 Accelerated Block B Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40683	SA-28 Accelerated Block B Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40685	SA-27 Accelerated Block B Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40671	SA-29 Accelerated Block B Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40672	SA-29 Accelerated Block B Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40682	SA-29 Accelerated Block B Aircraft	[*]	[*]	[*]	[*]	[*]
Total:	8		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, 108205		Supplemental Agreement No. 29
	BOEING PROPRIETARY

Table 1-B to Purchase Agreement No. 3157

Aircraft Delivery, Description, Price and Advance Payments

Block B Conditional Firm

Airframe Model/MTOW:	777-Freighter	766000 pounds	Detail Specification: D019W007FED7F-1, Rev E dated August 29, 2011
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 Agreemt:		[*]

					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	[*]	40673	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40676	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	40679	[*]	[*]	[*]	[*]	[*]
Total:	3

* 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 50270		Supplemental Agreement #29
		Page 1
	Boeing Proprietary

Table 1-C2 To

Purchase Agreement No. PA-3157

Aircraft Delivery, Description, Price and Advance Payments

Airframe Model/MTOW:	777-Freighter	766000 pounds	Detail Specification: D019W007FED7F-1, Rev E dated August 29, 2011
Engine Model/Thrust:	GE90-110B1L	110100 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:		[*]
Deposit per Aircraft		[*]

						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	[*]	N/A		[*]	[*]	[*]	[*]	[*]
[*]	2	[*]	N/A	SA-26 Accelerated Block C Aircraft	[*]	[*]	[*]	[*]	[*]
[*]	1	[*]	41750	SA-29 Accelerated Block C Aircraft	[*]	[*]	[*]	[*]	[*]
Total:	4

Notes:   1) [*]

              2) [*] for the SA-26 Accelerated Block C Aircraft are subject to Letter Agreement 6-1162-LKJ-0737, Special Matters—SA 26 Accelerated Block C 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.     

FED		Supplemental Agreement No. 29
108250		Page 1
	BOEING PROPRIETARY

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

FedEx contract # 07-0255-034    

6-1162-LKJ-0737R1

Federal Express Corporation

3131 Democrat Road

Memphis, TN 38125

Subject:	Special Matters – SA-26 Accelerated Block C 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 FED-PA-LA-1000790R3, Special Matters for Block C Aircraft

This letter agreement (Letter Agreement) cancels and supersedes Letter Agreement 6-1162-LKJ-0737 and 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-26 Accelerated Block C Aircraft as defined in Supplemental Agreement No. 26 to the Purchase Agreement (SA-26).

1.      In consideration of the acceleration of the SA-26 Accelerated Block C Aircraft, Boeing will provide, in addition to the provisions of the reference (b) letter agreement, the following business considerations.

1.1 ACCELERATION CONSIDERATION [*].

[*]

1.2 [*] ADVANCE PAYMENTS.

1.2.1 As a consequence of the acceleration of the SA-26 Accelerated Block C Aircraft, Customer will owe certain advance payments for the SA-26 Accelerated Block C Aircraft before [*] in accordance with the advance payment schedule provided in Table 1-C2 of the Purchase Agreement (Standard Advance Payment Schedule).

[*]

1.2.2 [*]

1.3 REMOVED AND RESERVED.

* 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-0737R1		Page 1
Special Matters – SA-26 Accelerated Block C Aircraft		SA-29
	BOEING PROPRIETARY

1.4 BUYER FURNISHED EQUIPMENT MATTERS.

The attachment to this letter agreement provides initial BFE on-dock dates for the SA-26 Accelerated Block C Aircraft. Subsequent updates to BFE on-doc dates will be electronically provided through My Boeing Fleet but such updated dates will be no earlier than the dates provided in the attachment to this Letter Agreement.

[*]

2. ADVANCE PAYMENT SETOFF RIGHTS.

Customer agrees that if it defaults on any monetary obligation under the Purchase Agreement and has failed to cure such default within five (5) calendar days of receiving written notice from Boeing, then Boeing may apply any/all advance payments paid by Customer to cure, in part or in whole, any default made with respect to any Aircraft or other obligation in the Purchase Agreement. In the event that Boeing exercises such setoff rights and applies any advance payments to cure any such default by Customer with respect to an Aircraft or other obligation in the Purchase Agreement, Boeing will be entitled to require Customer to replace within ten days of written notice, the amount of advance payments applied to cure such default such that the total amount of advance payments will be restored to the aggregate amount of advance payments owed at that time by Customer.

3. ASSIGNMENT.

The [*] and other business arrangements set forth in this Letter Agreement are [*] to Customer and in consideration of Customer taking title to the SA-26 Accelerated Block C Aircraft at the time of delivery and cannot be assigned, in whole or in part, without the prior written consent of Boeing.

4. 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-0737R1		Page 2
Special Matters – SA-26 Accelerated Block C Aircraft		SA-29
	BOEING PROPRIETARY

Very truly yours,

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

    ACCEPTED AND AGREED TO this

    Date: February 2, 2018

FEDERAL EXPRESS CORPORATION
By	/s/ Phillip C. Blum
Its	VP Aircraft Acquisitions & Planning and Performance

6-1162-LKJ-0737R1		Page 3
Special Matters – SA-26 Accelerated Block C Aircraft		SA-29
	BOEING PROPRIETARY

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

FedEx contract # 07-0255-038    

6-1162-LKJ-0766

Federal Express Corporation

3131 Democrat Road

Memphis, TN 38125

Subject:	Special Matters – SA-29 Accelerated 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 FED-PA-LA-1000790R3, Special Matters for Block C Aircraft
	(c) Letter Agreement 6-1162-RRO-1066R1, Special Matters for Block B Aircraft

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-29 Accelerated Aircraft as defined in Supplemental Agreement No. 29 to the Purchase Agreement (SA-29).

1. Background.

SA-29, in part, reschedules the delivery month of three (3) Block B Aircraft (SA-29 Accelerated Block B Aircraft) and one (1) Block C Aircraft (SA-29 Accelerated Block C Aircraft), (collectively, SA-29 Accelerated Aircraft), as shown in the table below.

Aircraft Block	MSN	Table	Revised Delivery Month of Aircraft
C	41750	Table 1-C2	[*]
B	40671	Table 1-B	[*]
B	40672	Table 1-B	[*]
B	40682	Table 1-B	[*]

2. SA-29 ACCELERATED 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-0766		Page 1
Special Matters – SA-29 Accelerated Aircraft		SA-29
	BOEING PROPRIETARY

2. ADVANCE PAYMENT SETOFF RIGHTS.

Customer agrees that if it defaults on any monetary obligation under the Purchase Agreement and has failed to cure such default within five (5) calendar days of receiving written notice from Boeing, then Boeing may apply any/all advance payments paid by Customer to cure, in part or in whole, any default made with respect to any Aircraft or other obligation in the Purchase Agreement. In the event that Boeing exercises such setoff rights and applies any advance payments to cure any such default by Customer with respect to an Aircraft or other obligation in the Purchase Agreement, Boeing will be entitled to require Customer to replace within ten days of written notice, the amount of advance payments applied to cure such default such that the total amount of advance payments will be restored to the aggregate amount of advance payments owed at that time by Customer.

3. ASSIGNMENT.

The [*] and other business arrangements set forth in this Letter Agreement are [*] to Customer and cannot be assigned, in whole or in part, without the prior written consent of Boeing.

4. 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-0766		Page 2
Special Matters – SA-29 Accelerated Aircraft		SA-29
	BOEING PROPRIETARY

Very truly yours,

THE BOEING COMPANY
By	/s/ L. Kirsten Jensen
Its	Attorney-In-Fact
ACCEPTED AND AGREED TO this
Date:	February 2, 2018
FEDERAL EXPRESS CORPORATION
By	/s/ Phillip C. Blum
Its	VP Aircraft Acquisitions & Planning and Performance

6-1162-LKJ-0766		Page 3
Special Matters – SA-29 Accelerated Aircraft		SA-29
	BOEING PROPRIETARY

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

FedEx contract # 07-0255-038    

6-1162-LKJ-0767

Federal Express Corporation

3131 Democrat Road

Memphis, TN 38125

Subject:	Special Considerations – SA-29
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-RRO 1062, Option Aircraft
	(c) Letter Agreement 6-1162-RRO 1067, Special Matters for Options as Detailed in Letter Agreement 6-1162-RRO-1062
	(d) Letter Agreement 6-1162-RRO-1068, Special Provision – Block B Aircraft
	(e) Letter Agreement FED-PA-LA-1000790R3, Special Matters for Block C Aircraft

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.

1. SPECIAL CONSIDERATION [*].

[*]

2. SPECIAL CONSIDERATION [*].

[*]

3. ADVANCE PAYMENT SETOFF RIGHTS.

Customer agrees that if it defaults on any monetary obligation under the Purchase Agreement and has failed to cure such default within five (5) calendar days of receiving written notice from Boeing, then Boeing may apply any/all advance payments paid by Customer to cure, in part or in whole, any default made with respect to any Aircraft or other obligation in the Purchase Agreement. In the event that Boeing exercises such setoff rights and applies any advance payments to cure any such default by Customer with respect to an Aircraft or other obligation in the Purchase Agreement, Boeing will be may require Customer to replace within ten (10) days of written notice, the amount of advance payments applied to cure such default such that the total amount of advance payments will be restored to the aggregate amount of advance payments owed at that time by Customer.

* 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-0767		Page 1
Special Considerations – SA-29		SA-29
	BOEING PROPRIETARY

4. ASSIGNMENT.

The [*] and other business arrangements set forth in this Letter Agreement are [*] to Customer and cannot be assigned, in whole or in part, without the prior written consent of Boeing.

5. 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-0766		Page 2
Special Considerations – SA-29		SA-29
	BOEING PROPRIETARY

Very truly yours,

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

    ACCEPTED AND AGREED TO this

    Date: February 2, 2018

FEDERAL EXPRESS CORPORATION
By	/s/ Phillip C. Blum
Its	VP Aircraft Acquisitions & Planning and Performance

6-1162-LKJ-0766		Page 3
Special Considerations – SA-29		SA-29
	BOEING PROPRIETARY

EX-10.10

Exhibit 10.10

EXECUTION VERSION

FIRST AMENDMENT

FIRST AMENDMENT (this “Amendment”), dated as of January 26, 2018, to the Five-Year Credit Agreement, dated as of November 13, 2015, among FEDEX CORPORATION, a Delaware corporation (the “Borrower”), the several lenders parties thereto (the “Lenders”), JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and each other party thereto (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”).

WITNESSETH :

WHEREAS, the Credit Agreement provides in (i) Section 2.18(a) thereof that the Borrower and any one or more Lenders may agree that such Lenders shall increase the amount of their Commitments in an aggregate principal amount not to exceed $250,000,000 by executing and delivering to the Administrative Agent, among other things, an Increased Facility Activation Notice and (ii) Section 2.18(b) thereof that any Lender may increase its Commitment with the consent of the Borrower, the Issuing Bank and the Administrative Agent by executing and delivering an Increasing Lender Supplement;

WHEREAS, such Increased Facility Activation Notice and Increasing Lender Supplements have been executed and delivered and the Borrower has satisfied each other condition required pursuant to Section 2.18 of the Credit Agreement to increase the aggregate amount of Commitments by $250,000,000 to an aggregate principal amount of $2,000,000,000;

WHEREAS, Section 2.18(d) of the Credit Agreement provides that on each Increased Facility Closing Date, the Credit Agreement and the Schedules thereto shall be amended to the extent necessary to reflect the existence and terms of the increased Commitments evidenced thereby and that any such deemed amendment may be effected in writing by the Administrative Agent and the Borrower (it being understood that this Amendment is one of such deemed amendments).

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

SECTION 2. Amendments. Effective as of the Effective Date (as defined below) the Credit Agreement is hereby amended as follows:

(a) Section 1.01 of the Credit Agreement is amended by inserting the following new definitions in their correct alphabetical order:

“First Amendment” means that certain First Amendment, dated as of January 26, 2018, between the Borrower and the Administrative Agent.

“First Amendment Effective Date” has the meaning assigned to the term “Effective Date” in the First Amendment.

(b) The final sentence of the definition of “Commitment” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated as follows:

“The aggregate amount of the Commitments as of the First Amendment Effective Date is $2,000,000,000.”

(c) Schedule 2.01 of the Credit Agreement is hereby amended and restated in its entirety as set forth in Exhibit A attached hereto.

SECTION 3. Conditions to Effectiveness. This Amendment shall become effective on and as of the date (the “Effective Date”) upon which the following conditions shall have been satisfied (or waived by the Administrative Agent):

(a) the Administrative Agent shall have received this Amendment, executed and delivered by a duly authorized officer of the Borrower and the Administrative Agent; and

(b) the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent required under Section 10.05 of the Credit Agreement.

SECTION 4. No Other Amendment or Waivers; Confirmation. Except as expressly provided hereby, all of the terms and provisions of the Credit Agreement and the other Loan Documents are and shall remain in full force and effect. The amendments contained herein shall not be construed as an amendment or waiver of any other provision of the Credit Agreement or the other Loan Documents or for any purpose except as expressly set forth herein or a consent to any further or future action on the part of any Loan Party that would require the waiver or consent of the Administrative Agent or the Lenders.

SECTION 5. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTIONS 10.11 AND 10.12 OF THE CREDIT AGREEMENT AS IF SUCH SECTIONS WERE SET FORTH IN FULL HEREIN.

SECTION 6. Miscellaneous. (a) This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Amendment.

(b) The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including permitted assignees of its Loans in whole or in part prior to effectiveness hereof).

(c) This Amendment shall be a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.

SECTION 7. Severability. If any provision of this Amendment or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Amendment and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 8. Headings. Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

FEDEX CORPORATION
By:	/s/ Michael C. Lenz
	Name: Michael C. Lenz
	Title:   Corporate Vice President and Treasurer

[Signature Page to Amendment]

JPMORGAN CHASE BANK, N.A., as Administrative Agent
By:	/s/ Robert P. Kellas
	Name: Robert P. Kellas
	Title:   Executive Director

[Signature Page to Amendment]

Exhibit A

Schedule 2.01

SCHEDULE 2.01

LENDERS AND

COMMITMENTS

Lender	Allocation
JPMorgan Chase Bank, N.A.	$147,857,146
Bank of America, N.A.	$147,857,144
Citibank, N.A.	$147,857,144
The Bank of Nova Scotia	$147,857,144
BNP Paribas	$97,857,142
Deutsche Bank AG New York Branch	$97,857,142
Goldman Sachs Bank USA	$97,857,142
HSBC Bank USA, National Association	$97,857,142
ING Bank N.V. - Dublin Branch	$97,857,142
Mizuho Bank (USA)	$97,857,142
Regions Bank	$97,857,142
SunTrust Bank	$97,857,142
Wells Fargo Bank, National Association	$97,857,142
Morgan Stanley Bank, N.A.	$72,857,144
Commerzbank AG, New York Branch	$55,000,000
PNC Bank, National Association	$55,000,000
Sumitomo Mitsui Banking Corporation	$55,000,000
The Bank of New York Mellon	$55,000,000
U.S. Bank N.A.	$55,000,000
The Bank of Tokyo Mitsubishi UFJ, Ltd.	$45,000,000
First Tennessee Bank	$35,000,000
KBC Bank NV	$35,000,000
Standard Chartered Bank	$35,000,000
State Street Bank and Trust Company	$30,000,000
	Total: $2,000,000,00

EX-12.1

EXHIBIT 12.1

FEDEX CORPORATION

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(UNAUDITED)

(IN MILLIONS, EXCEPT RATIOS)

	Nine Months Ended
	February 28,				Year Ended May 31,
	2018		2017		2017		2016		2015		2014		2013
Earnings:
Income before income taxes	$	2,995	$	3,119	$	4,579	$	2,740	$	1,627	$	3,658	$	4,338
Add back:
Interest expense, net of capitalized interest		395		370		502		336		235		160		82
Amortization of debt issuance costs		2		8		11		8		5		4		5
Portion of rent expense representative of    interest factor		914		742		1,182		924		908		876		864
Earnings as adjusted	$	4,306	$	4,239	$	6,274	$	4,008	$	2,775	$	4,698	$	5,289
Fixed Charges:
Interest expense, net of capitalized interest	$	395	$	370	$	502	$	336	$	235	$	160	$	82
Capitalized interest		45		30		41		42		37		29		45
Amortization of debt issuance costs		2		8		11		8		5		4		5
Portion of rent expense representative of    interest factor		914		742		1,182		924		908		876		864
	$	1,356	$	1,150	$	1,736	$	1,310	$	1,185	$	1,069	$	996
Ratio of Earnings to Fixed Charges		3.2		3.7		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. 333-222198, 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 March 21, 2018, relating to the unaudited condensed consolidated interim financial statements of FedEx Corporation that are included in its Form 10-Q for the quarter ended February 28, 2018.

/s/ Ernst & Young LLP

Memphis, Tennessee

March 21, 2018

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: March 21, 2018

/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: March 21, 2018

/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 February 28, 2018 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: March 21, 2018

/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 February 28, 2018 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: March 21, 2018

/s/ Alan B. Graf, Jr.

Alan B. Graf, Jr.

Executive Vice President and

Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Feb. 28, 2018	Mar. 19, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Feb. 28, 2018
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
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		267,215,207
Trading Symbol	FDX

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Feb. 28, 2018	May 31, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 2,789	$ 3,969
Receivables, less allowances of $373 and $252	8,671	7,599
Spare parts, supplies and fuel, less allowances of $258 and $237	523	514
Prepaid expenses and other	1,592	546
Total current assets	13,575	12,628
PROPERTY AND EQUIPMENT, AT COST	54,377	50,626
Less accumulated depreciation and amortization	26,680	24,645
Net property and equipment	27,697	25,981
OTHER LONG-TERM ASSETS
Goodwill	7,464	7,154
Other assets	3,115	2,789
Total other long-term assets	10,579	9,943
ASSETS	51,851	48,552
CURRENT LIABILITIES
Short-term borrowings	799
Current portion of long-term debt	764	22
Accrued salaries and employee benefits	1,945	1,914
Accounts payable	3,102	2,752
Accrued expenses	2,893	3,230
Total current liabilities	9,503	7,918
LONG-TERM DEBT, LESS CURRENT PORTION	16,017	14,909
OTHER LONG-TERM LIABILITIES
Deferred income taxes	2,401	2,485
Pension, postretirement healthcare and other benefit obligations	2,181	4,487
Self-insurance accruals	1,715	1,494
Deferred lease obligations	532	531
Deferred gains, principally related to aircraft transactions	124	137
Other liabilities	484	518
Total other long-term liabilities	7,437	9,652
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS' INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of February 28, 2018 and May 31, 2017	32	32
Additional paid-in capital	3,085	3,005
Retained earnings	23,710	20,833
Accumulated other comprehensive loss	(357)	(415)
Treasury stock, at cost	(7,576)	(7,382)
Total common stockholders’ investment	18,894	16,073
LIABILITIES AND STOCKHOLDERS' INVESTMENT	$ 51,851	$ 48,552

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Feb. 28, 2018	May 31, 2017
CURRENT ASSETS
Allowances for receivables	$ 373	$ 252
Allowances for spare parts, supplies and fuel	$ 258	$ 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		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Income Statement [Abstract]
REVENUES	$ 16,526	$ 14,997	$ 48,136	$ 44,591
OPERATING EXPENSES:
Salaries and employee benefits	5,981	5,395	17,241	16,059
Purchased transportation	3,935	3,498	11,220	10,169
Rentals and landing fees	873	834	2,526	2,426
Depreciation and amortization	786	762	2,293	2,241
Fuel	914	735	2,435	2,043
Maintenance and repairs	628	588	1,968	1,765
Other	2,408	2,160	7,073	6,432
OPERATING EXPENSES	15,525	13,972	44,756	41,135
OPERATING INCOME	1,001	1,025	3,380	3,456
OTHER INCOME (EXPENSE):
Interest, net	(125)	(122)	(363)	(354)
Other, net	(2)	(4)	(22)	17
OTHER INCOME (EXPENSE)	(127)	(126)	(385)	(337)
INCOME BEFORE INCOME TAXES	874	899	2,995	3,119
PROVISION FOR INCOME TAXES	(1,200)	337	(450)	1,142
NET INCOME	$ 2,074	$ 562	$ 3,445	$ 1,977
EARNINGS PER COMMON SHARE:
Basic	$ 7.74	$ 2.11	$ 12.85	$ 7.43
Diluted	7.59	2.07	12.63	7.31
DIVIDENDS DECLARED PER COMMON SHARE	$ 0.50	$ 0.40	$ 2.00	$ 1.60

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Statement Of Income And Comprehensive Income [Abstract]
NET INCOME	$ 2,074	$ 562	$ 3,445	$ 1,977
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax of $9, $3, $26, and $19	100	110	119	(108)
Amortization of prior service credit, net of tax of $7, $12, $29, and $34	(23)	(19)	(61)	(57)
Other comprehensive income (loss)	77	91	58	(165)
COMPREHENSIVE INCOME	$ 2,151	$ 653	$ 3,503	$ 1,812

XML

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Other Comprehensive Income, Tax Amounts
Foreign currency translation adjustments, tax expense (benefit)	$ 9	$ (3)	$ 26	$ (19)
Amortization of prior service credit, tax benefit	$ 7	$ 12	$ 29	$ 34

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Operating Activities:
Net income	$ 3,445	$ 1,977
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	2,293	2,241
Provision for uncollectible accounts	177	115
Stock-based compensation	135	123
Deferred income taxes and other noncash items	(914)	474
Gain from sale of investment		(35)
Changes in assets and liabilities:
Receivables	(986)	(340)
Other assets	(151)	(235)
Accounts payable and other liabilities	(2,781)	(1,642)
Other, net	(56)	(33)
Cash provided by operating activities	1,162	2,645
Investing Activities:
Capital expenditures	(3,994)	(3,790)
Business acquisitions, net of cash acquired	(44)
Proceeds from asset dispositions and other	21	123
Cash used in investing activities	(4,017)	(3,667)
Financing Activities:
Proceeds from short-term borrowings, net	797
Principal payments on debt	(31)	(49)
Proceeds from debt issuances	1,481	1,190
Proceeds from stock issuances	284	265
Dividends paid	(402)	(319)
Purchase of treasury stock	(558)	(358)
Other, net	6	2
Cash provided by financing activities	1,577	731
Effect of exchange rate changes on cash	98	(70)
Net decrease in cash and cash equivalents	(1,180)	(361)
Cash and cash equivalents at beginning of period	3,969	3,534
Cash and cash equivalents at end of period	$ 2,789	$ 3,173

XML

General

9 Months Ended

Feb. 28, 2018

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 February 28, 2018, the results of our operations for the three- and nine-month periods ended February 28, 2018 and 2017, and cash flows for the nine-month periods ended February 28, 2018 and 2017. Operating results for the three- and nine-month periods ended February 28, 2018 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 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 $32 million for the three-month period ended February 28, 2018 and $135 million for the nine-month period ended February 28, 2018. Our stock-based compensation expense was $31 million for the three-month period ended February 28, 2017 and $123 million for the nine-month period ended February 28, 2017. 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.

In December 2017, the SEC staff issued Staff Accounting Bulletin (“SAB”) 118 to provide guidance to registrants in accounting for income taxes under the Tax Cuts and Jobs Act (“TCJA”). See Note 5 for further discussion related to applying this guidance.

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 an immaterial impact on our accounting and financial reporting for the third quarter and nine months of 2018.

In January 2017, the FASB issued an Accounting Standards Update that simplifies the subsequent measurement of goodwill, eliminating Step 2 from the goodwill impairment test. Under this new guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This guidance will be applied prospectively and will be effective for us beginning June 1, 2020 (fiscal 2021). Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. We expect to early adopt the guidance during the fourth quarter of 2018.

In 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 finalizing the assessment of the impact this new standard will have on our consolidated financial statements and related disclosures, including ongoing contract reviews, which will be completed by the end of 2018. We do not anticipate that the new guidance will have a material impact on our revenue recognition policies, practices or systems.

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 $143 million in the third quarter and $436 million in the nine months of 2018, and by $113 million in the third quarter and $337 million in the nine months of 2017, but would not have impacted our net income in these periods. This new guidance will be effective June 1, 2018 and will be applied retrospectively.

In 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 our 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 portfolio, 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 June 1, 2019 (fiscal 2020).

In February 2018, the FASB issued an Accounting Standards Update that will permit companies to reclassify the income tax effect of the TCJA on items within accumulated other comprehensive income (loss) (“AOCI”) to retained earnings. These changes will be effective June 1, 2019 (fiscal 2020).

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 third quarter of 2018, we repurchased 1.2 million shares of FedEx common stock at an average price of $248.73 per share for a total of $288 million. During the nine months of 2018, we repurchased 2.4 million shares of FedEx common stock at an average price of $232.00 per share for a total of $558 million. As of February 28, 2018, 13.6 million shares remained under the current share repurchase authorization.

DIVIDENDS DECLARED PER COMMON SHARE. On February 16, 2018, our Board of Directors declared a quarterly dividend of $0.50 per share of common stock. The dividend will be paid on April 2, 2018 to stockholders of record as of the close of business on March 12, 2018. 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)

9 Months Ended

Feb. 28, 2018

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 AOCI, net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended February 28 (in millions; amounts in parentheses indicate debits to AOCI):

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Foreign currency translation loss:
Balance at beginning of period	$	(666	)	$	(732	)	$	(685	)	$	(514	)
Translation adjustments		100			110			119			(108	)
Balance at end of period		(566	)		(622	)		(566	)		(622	)
Retirement plans adjustments:
Balance at beginning of period		232			307			270			345
Reclassifications from AOCI		(23	)		(19	)		(61	)		(57	)
Balance at end of period		209			288			209			288
Accumulated other comprehensive (loss) at end of period	$	(357	)	$	(334	)	$	(357	)	$	(334	)

The following table presents details of the reclassifications from AOCI for the periods ended February 28 (in millions; amounts in parentheses indicate debits to earnings):

	Amount Reclassified from AOCI												Affected Line Item in the Income Statement
	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Amortization of retirement plans    prior service credits, before tax	$	30		$	31		$	90		$	91		Salaries and employee benefits
Income tax benefit		(7	)		(12	)		(29	)		(34	)	Provision for income taxes
AOCI reclassifications, net of tax	$	23		$	19		$	61		$	57		Net income

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Financing Arrangements

9 Months Ended

Feb. 28, 2018

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.

During the third quarter of 2018, we issued $1.5 billion of senior unsecured debt under our current shelf registration statement, comprised of $500 million of 3.40% fixed-rate notes due in February 2028, and $1 billion of 4.05% fixed-rate notes due in February 2048. Interest on these notes is paid semi-annually. We used the net proceeds for a voluntary incremental contribution in February 2018 to our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”).

During the quarter, we amended our five-year revolving credit facility to increase the aggregate amount available under the facility from $1.75 billion to $2.0 billion. The facility, which expires in November 2020 and 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 2.2 to 1.0 at February 28, 2018. 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 this 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 third quarter of 2018, we issued commercial paper which provided us with additional short-term liquidity. The maximum outstanding during the quarter was $800 million. 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 February 28, 2018, $800 million of commercial paper and $54 million in letters of credit were outstanding, leaving $1.146 billion available under the revolving credit facility for future borrowings.

Long-term debt, exclusive of capital leases, had carrying values of $16.7 billion at February 28, 2018 and $14.9 billion at May 31, 2017, compared with estimated fair values of $17.0 billion at February 28, 2018 and $15.5 billion at May 31, 2017. The annualized weighted-average interest rate on long-term debt was 3.6% at February 28, 2018. 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

9 Months Ended

Feb. 28, 2018

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 February 28 was as follows (in millions, except per share amounts):

	Three Months Ended				Nine Months Ended
	2018		2017		2018		2017
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	2,071	$	561	$	3,441	$	1,974
Weighted-average common shares		268		266		268		266
Basic earnings per common share	$	7.74	$	2.11	$	12.85	$	7.43
Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	2,071	$	561	$	3,441	$	1,974
Weighted-average common shares		268		266		268		266
Dilutive effect of share-based awards		5		5		4		4
Weighted-average diluted shares		273		271		272		270
Diluted earnings per common share	$	7.59	$	2.07	$	12.63	$	7.31
Anti-dilutive options excluded from diluted earnings per    common share		1.9		4.0		2.6		4.7

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

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Income Taxes

9 Months Ended

Feb. 28, 2018

Income Tax Disclosure [Abstract]

Income Taxes

(5) Income Taxes

On December 22, 2017, the United States government enacted comprehensive tax legislation through the TCJA. The TCJA significantly changes the U.S. corporate income tax system including, among other things, lowering the statutory federal income tax rate from 35% to 21%, eliminating or reducing certain income tax deductions, and implementing a modified territorial tax system that includes a one-time transition tax on previously deferred foreign earnings. Due to our May 31 fiscal year end, the lower rate will be phased in, resulting in a U.S. statutory federal rate of 29.2% for 2018 and a 21% statutory federal rate for subsequent years.

In December 2017, the SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides for a measurement period of up to one year from the enactment date for companies to complete the accounting for the initial income tax effects of the TCJA. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting is complete and provide a provisional estimate (where determinable) of the income tax effects of the TCJA where the accounting is incomplete. The provisional estimate is required to be updated throughout the measurement period.

As of February 28, 2018, we have not completed our initial accounting of the tax effects of the TCJA; however, where determinable, we have made an estimate of the effects on our existing deferred tax balances and the one-time transition tax. During the quarter, we recognized a provisional benefit of $1.15 billion related to the remeasurement of our net U.S. deferred tax liability and a provisional benefit of $36 million from foreign tax credits exceeding the one-time transition tax on previously deferred foreign earnings.   

In addition to the provisional amounts above, we recognized a one-time benefit of $204 million from a $1.5 billion contribution to our U.S. Pension Plans in February 2018 and a benefit of $165 million related to a lower statutory income tax rate on fiscal 2018 year-to-date earnings.  

The following table provides a reconciliation of the 2017 effective tax rates to the 2018 effective tax rates, including the impact of the TCJA, for the periods ended February 28:

	Three Months Ended			Nine Months Ended
	2018			2018
2017 Effective Tax Rate		37.5	%		36.6	%
Remeasurement of net U.S. deferred tax liability		(131.5	)		(38.4	)
Effect of February 2018 pension contribution (a)		(23.3	)		(6.8	)
Lower statutory tax rate		(18.9	)		(5.5	)
Transition tax		(4.1	)		(1.2	)
Other (b)		3.0			0.3
2018 Effective Tax Rate		(137.3	)%		(15.0	)%

(a) The benefit is from the pension contribution deducted on our 2017 tax return at a tax rate of 35%.

(b) The 2018 tax rates were negatively impacted by the effect of the NotPetya cyberattack, changes in uncertain tax positions and tax rate impacts on changes in deferred tax items after the TCJA enactment and were favorably impacted from foreign tax credits associated with a second quarter dividend from foreign operations.

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Retirement Plans

9 Months Ended

Feb. 28, 2018

Compensation And Retirement Disclosure [Abstract]

Retirement Plans

(6) 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 February 28 were as follows (in millions):

	Three Months Ended				Nine Months Ended
	2018		2017		2018		2017
Defined benefit pension plans	$	39	$	57	$	113	$	173
Defined contribution plans		135		117		386		348
Postretirement healthcare plans		19		19		56		57
	$	193	$	193	$	555	$	578

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended February 28 included the following components (in millions):

	Three Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2018			2017			2018			2017			2018		2017
Service cost	$	169		$	160		$	23		$	20		$	9	$	9
Interest cost		279			282			12			11			10		10
Expected return on plan assets		(406	)		(375	)		(10	)		(9	)		—		—
Amortization of prior service credit and other		(29	)		(30	)		1			(2	)		—		—
	$	13		$	37		$	26		$	20		$	19	$	19
	Nine Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2018			2017			2018			2017			2018		2017
Service cost	$	509		$	479		$	69		$	61		$	27	$	27
Interest cost		836			846			37			33			29		30
Expected return on plan assets		(1,218	)		(1,126	)		(32	)		(30	)		—		—
Amortization of prior service credit and other		(88	)		(89	)		—			(1	)		—		—
	$	39		$	110		$	74		$	63		$	56	$	57

Contributions to our U.S. Pension Plans for the nine-month periods ended February 28 were as follows (in millions):

	2018		2017
Required	$	22	$	444
Voluntary		2,478		1,306
	$	2,500	$	1,750

During the third quarter of 2018, we made voluntary contributions to our U.S. Pension Plans of $1.75 billion.

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Business Segment Information

9 Months Ended

Feb. 28, 2018

Segment Reporting Disclosure Of Entitys Reportable Segments [Abstract]

Business Segment Information

(7) 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.

Effective March 1, 2018, we realigned our specialty logistics and e-commerce solutions in a new organizational structure under FedEx Trade Networks, Inc. in the FedEx Express segment. The realignment allows us to improve our ability to deliver the capabilities of our specialty companies to customers. The new structure includes FedEx Custom Critical, FedEx Cross Border, FedEx Supply Chain, FedEx Trade Networks Transport & Brokerage and, effective June 1, 2018, a new company called FedEx Forward Depots. Prior period segment results will be recast to conform to current year presentation beginning in the fourth quarter of 2018.

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 February 28 (in millions):

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Revenues
FedEx Express segment	$	9,370		$	8,569		$	27,376		$	25,671
FedEx Ground segment		5,222			4,688			14,790			13,397
FedEx Freight segment		1,694			1,492			5,208			4,747
FedEx Services segment		397			389			1,213			1,198
Eliminations and other		(157	)		(141	)		(451	)		(422	)
	$	16,526		$	14,997		$	48,136		$	44,591
Operating Income
FedEx Express segment	$	424		$	557		$	1,574		$	1,873
FedEx Ground segment		634			515			1,781			1,590
FedEx Freight segment		55			41			349			264
Eliminations, corporate and other		(112	)		(88	)		(324	)		(271	)
	$	1,001		$	1,025		$	3,380		$	3,456

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Commitments

9 Months Ended

Feb. 28, 2018

Commitments [Abstract]

Commitments

(8) Commitments

As of February 28, 2018, 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)	$	516	$	254	$	770
2019		1,789		725		2,514
2020		1,931		621		2,552
2021		1,244		400		1,644
2022		1,364		251		1,615
Thereafter		3,314		508		3,822
Total	$	10,158	$	2,759	$	12,917

⁽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 February 28, 2018, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and three 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 quarter, FedEx Express entered into an agreement to accelerate the delivery of two B777F aircraft from 2021 to 2020, one B777F aircraft from 2021 to 2019, and one B777F aircraft from 2022 to 2020. 

We had $922 million in deposits and progress payments as of February 28, 2018 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 February 28, 2018 with the year of expected delivery:

	Cessna SkyCourier 408		ATR 72-600F		B767F		B777F		Total
2018 (remainder)		-		-		4		1		5
2019		-		-		15		3		18
2020		-		-		16		6		22
2021		12		5		10		-		27
2022		12		6		10		3		31
Thereafter		26		19		6		-		51
Total		50		30		61		13		154

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at February 28, 2018 is as follows (in millions):

	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2018 (remainder)	$	47	$	585	$	632
2019		343		2,065		2,408
2020		261		1,854		2,115
2021		203		1,675		1,878
2022		185		1,510		1,695
Thereafter		175		9,018		9,193
Total	$	1,214	$	16,707	$	17,921

Future minimum lease payments under capital leases were immaterial at February 28, 2018. 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

9 Months Ended

Feb. 28, 2018

Loss Contingency [Abstract]

Contingencies

(9) Contingencies

Independent Contractor — Lawsuits and Administrative Proceedings. 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. 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 additional 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. In March 2018, we settled this matter for an immaterial amount, and the settlement agreement has been approved by the court. We have been reimbursed by the sellers of GENCO for the amount of the settlement.

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

9 Months Ended

Feb. 28, 2018

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

(10) Supplemental Cash Flow Information

Cash paid for interest expense and income taxes for the nine-month periods ended February 28 was as follows (in millions):

	2018			2017
Cash payments for:
Interest (net of capitalized interest)	$	430		$	400
Income taxes	$	707		$	294
Income tax refunds received		(59	)		(16	)
Cash tax payments, net	$	648		$	278

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Condensed Consolidating Financial Statements

9 Months Ended

Feb. 28, 2018

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

(11) 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 $16.6 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)

February 28, 2018

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	957	$	375	$	1,494	$	(37	)	$	2,789
Receivables, less allowances		1		5,308		3,462		(100	)		8,671
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		920		928		267		—			2,115
Total current assets		1,878		6,611		5,223		(137	)		13,575
PROPERTY AND EQUIPMENT, AT COST		22		50,601		3,754		—			54,377
Less accumulated depreciation and amortization		18		24,999		1,663		—			26,680
Net property and equipment		4		25,602		2,091		—			27,697
INTERCOMPANY RECEIVABLE		1,401		2,508		130		(4,039	)		—
GOODWILL		—		1,571		5,893		—			7,464
INVESTMENT IN SUBSIDIARIES		31,295		2,928		—		(34,223	)		—
OTHER ASSETS		2,706		1,566		1,268		(2,425	)		3,115
	$	37,284	$	40,786	$	14,605	$	(40,824	)	$	51,851
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings	$	799	$	—	$	—	$	—		$	799
Current portion of long-term debt		750		6		8		—			764
Accrued salaries and employee benefits		69		1,362		514		—			1,945
Accounts payable		149		1,483		1,607		(137	)		3,102
Accrued expenses		379		1,605		909		—			2,893
Total current liabilities		2,146		4,456		3,038		(137	)		9,503
LONG-TERM DEBT, LESS CURRENT PORTION		15,713		288		16		—			16,017
INTERCOMPANY PAYABLE		—		—		4,039		(4,039	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		4,285		541		(2,425	)		2,401
Other liabilities		531		3,605		900		—			5,036
Total other long-term liabilities		531		7,890		1,441		(2,425	)		7,437
STOCKHOLDERS’ INVESTMENT		18,894		28,152		6,071		(34,223	)		18,894
	$	37,284	$	40,786	$	14,605	$	(40,824	)	$	51,851

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 February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	12,433		$	4,229		$	(136	)	$	16,526
OPERATING EXPENSES:
Salaries and employee benefits		39			4,623			1,319			—			5,981
Purchased transportation		—			2,459			1,560			(84	)		3,935
Rentals and landing fees		2			684			189			(2	)		873
Depreciation and amortization		1			670			115			—			786
Fuel		—			837			77			—			914
Maintenance and repairs		1			543			84			—			628
Intercompany charges, net		(114	)		185			(71	)		—			—
Other		71			1,596			791			(50	)		2,408
		—			11,597			4,064			(136	)		15,525
OPERATING INCOME		—			836			165			—			1,001
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		2,074			2			—			(2,076	)		—
Interest, net		(137	)		11			1			—			(125	)
Intercompany charges, net		140			(78	)		(62	)		—			—
Other, net		(3	)		104			(103	)		—			(2	)
INCOME BEFORE INCOME TAXES		2,074			875			1			(2,076	)		874
Provision for income taxes		—			(1,197	)		(3	)		—			(1,200	)
NET INCOME	$	2,074		$	2,072		$	4		$	(2,076	)	$	2,074
COMPREHENSIVE INCOME	$	2,051		$	2,069		$	107		$	(2,076	)	$	2,151

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	11,275		$	3,794		$	(72	)	$	14,997
OPERATING EXPENSES:
Salaries and employee benefits		29			4,210			1,156			—			5,395
Purchased transportation		—			2,219			1,306			(27	)		3,498
Rentals and landing fees		1			657			177			(1	)		834
Depreciation and amortization		1			649			112			—			762
Fuel		—			657			78			—			735
Maintenance and repairs		1			514			73			—			588
Intercompany charges, net		(87	)		(33	)		120			—			—
Other		55			1,428			721			(44	)		2,160
		—			10,301			3,743			(72	)		13,972
OPERATING INCOME		—			974			51			—			1,025
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		562			(41	)		—			(521	)		—
Interest, net		(129	)		6			1			—			(122	)
Intercompany charges, net		130			(79	)		(51	)		—			—
Other, net		(1	)		(118	)		115			—			(4	)
INCOME BEFORE INCOME TAXES		562			742			116			(521	)		899
Provision for income taxes		—			280			57			—			337
NET INCOME	$	562		$	462		$	59		$	(521	)	$	562
COMPREHENSIVE INCOME	$	543		$	444		$	187		$	(521	)	$	653

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Nine Months Ended February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	36,044		$	12,445		$	(353	)	$	48,136
OPERATING EXPENSES:
Salaries and employee benefits		112			13,289			3,840			—			17,241
Purchased transportation		—			6,836			4,600			(216	)		11,220
Rentals and landing fees		4			1,951			577			(6	)		2,526
Depreciation and amortization		1			1,958			334			—			2,293
Fuel		—			2,220			215			—			2,435
Maintenance and repairs		1			1,729			238			—			1,968
Intercompany charges, net		(325	)		298			27			—			—
Other		207			4,664			2,333			(131	)		7,073
		—			32,945			12,164			(353	)		44,756
OPERATING INCOME		—			3,099			281			—			3,380
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		3,445			39			—			(3,484	)		—
Interest, net		(396	)		35			(2	)		—			(363	)
Intercompany charges, net		403			(220	)		(183	)		—			—
Other, net		(7	)		88			(103	)		—			(22	)
INCOME BEFORE INCOME TAXES		3,445			3,041			(7	)		(3,484	)		2,995
Provision for income taxes		—			(573	)		123			—			(450	)
NET INCOME	$	3,445		$	3,614		$	(130	)	$	(3,484	)	$	3,445
COMPREHENSIVE INCOME	$	3,385		$	3,605		$	(3	)	$	(3,484	)	$	3,503

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Nine Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	33,175		$	11,628		$	(212	)	$	44,591
OPERATING EXPENSES:
Salaries and employee benefits		94			12,477			3,488			—			16,059
Purchased transportation		—			6,210			4,040			(81	)		10,169
Rentals and landing fees		4			1,902			524			(4	)		2,426
Depreciation and amortization		1			1,894			346			—			2,241
Fuel		—			1,819			224			—			2,043
Maintenance and repairs		1			1,544			220			—			1,765
Intercompany charges, net		(266	)		67			199			—			—
Other		166			4,230			2,163			(127	)		6,432
		—			30,143			11,204			(212	)		41,135
OPERATING INCOME		—			3,032			424			—			3,456
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,977			69			—			(2,046	)		—
Interest, net		(374	)		19			1			—			(354	)
Intercompany charges, net		376			(224	)		(152	)		—			—
Other, net		(2	)		(128	)		147			—			17
INCOME BEFORE INCOME TAXES		1,977			2,768			420			(2,046	)		3,119
Provision for income taxes		—			951			191			—			1,142
NET INCOME	$	1,977		$	1,817		$	229		$	(2,046	)	$	1,977
COMPREHENSIVE INCOME	$	1,921		$	1,781		$	156		$	(2,046	)	$	1,812

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(3,537	)	$	4,664		$	25		$	10		$	1,162
INVESTING ACTIVITIES
Capital expenditures		—			(3,746	)		(248	)		—			(3,994	)
Business acquisitions, net of cash acquired		—			(44	)		—			—			(44	)
Proceeds from asset dispositions and other		(5	)		23			3			—			21
CASH USED IN INVESTING    ACTIVITIES		(5	)		(3,767	)		(245	)		—			(4,017	)
FINANCING ACTIVITIES
Proceeds from short-term borrowings, net		797			—			—			—			797
Net transfers from (to) Parent		807			(895	)		88			—			—
Payment on loan between subsidiaries		210			—			(210	)		—			—
Proceeds from debt issuances		1,481			—			—			—			1,481
Principal payments on debt		—			(17	)		(14	)		—			(31	)
Proceeds from stock issuances		284			—			—			—			284
Dividends paid		(402	)		—			—			—			(402	)
Purchase of treasury stock		(558	)		—			—			—			(558	)
Other, net		2			4			—			—			6
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		2,621			(908	)		(136	)		—			1,577
Effect of exchange rate changes on cash		(6	)		61			43			—			98
Net (decrease) increase in cash and cash equivalents		(927	)		50			(313	)		10			(1,180	)
Cash and cash equivalents at beginning of period		1,884			325			1,807			(47	)		3,969
Cash and cash equivalents at end of period	$	957		$	375		$	1,494		$	(37	)	$	2,789

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(1,497	)	$	3,615		$	529		$	(2	)	$	2,645
INVESTING ACTIVITIES
Capital expenditures		—			(3,456	)		(334	)		—			(3,790	)
Proceeds from asset dispositions and other		85			16			22			—			123
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		85			(3,440	)		(312	)		—			(3,667	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		117			(148	)		31			—			—
Payment on loan between subsidiaries		36			(15	)		(21	)		—			—
Intercompany dividends		—			1			(1	)		—			—
Principal payments on debt		—			(33	)		(16	)		—			(49	)
Proceeds from debt issuances		1,190			—			—			—			1,190
Proceeds from stock issuances		265			—			—			—			265
Dividends paid		(319	)		—			—			—			(319	)
Purchase of treasury stock		(358	)		—			—			—			(358	)
Other, net		(8	)		(12	)		22			—			2
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		923			(207	)		15			—			731
Effect of exchange rate changes on cash		(10	)		7			(67	)		—			(70	)
Net (decrease) increase in cash and cash equivalents		(499	)		(25	)		165			(2	)		(361	)
Cash and cash equivalents at beginning of period		1,974			326			1,277			(43	)		3,534
Cash and cash equivalents at end of period	$	1,475		$	301		$	1,442		$	(45	)	$	3,173

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General (Policies)

9 Months Ended

Feb. 28, 2018

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 February 28, 2018, the results of our operations for the three- and nine-month periods ended February 28, 2018 and 2017, and cash flows for the nine-month periods ended February 28, 2018 and 2017. Operating results for the three- and nine-month periods ended February 28, 2018 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)

9 Months Ended

Feb. 28, 2018

Accumulated Other Comprehensive Income Loss Tables [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table provides changes in AOCI, net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended February 28 (in millions; amounts in parentheses indicate debits to AOCI):

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Foreign currency translation loss:
Balance at beginning of period	$	(666	)	$	(732	)	$	(685	)	$	(514	)
Translation adjustments		100			110			119			(108	)
Balance at end of period		(566	)		(622	)		(566	)		(622	)
Retirement plans adjustments:
Balance at beginning of period		232			307			270			345
Reclassifications from AOCI		(23	)		(19	)		(61	)		(57	)
Balance at end of period		209			288			209			288
Accumulated other comprehensive (loss) at end of period	$	(357	)	$	(334	)	$	(357	)	$	(334	)

Reclassification Out of Accumulated Other Comprehensive Income (Loss)

The following table presents details of the reclassifications from AOCI for the periods ended February 28 (in millions; amounts in parentheses indicate debits to earnings):

	Amount Reclassified from AOCI												Affected Line Item in the Income Statement
	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Amortization of retirement plans    prior service credits, before tax	$	30		$	31		$	90		$	91		Salaries and employee benefits
Income tax benefit		(7	)		(12	)		(29	)		(34	)	Provision for income taxes
AOCI reclassifications, net of tax	$	23		$	19		$	61		$	57		Net income

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Computation of Earnings Per Share (Tables)

9 Months Ended

Feb. 28, 2018

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 February 28 was as follows (in millions, except per share amounts):

	Three Months Ended				Nine Months Ended
	2018		2017		2018		2017
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	2,071	$	561	$	3,441	$	1,974
Weighted-average common shares		268		266		268		266
Basic earnings per common share	$	7.74	$	2.11	$	12.85	$	7.43
Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	2,071	$	561	$	3,441	$	1,974
Weighted-average common shares		268		266		268		266
Dilutive effect of share-based awards		5		5		4		4
Weighted-average diluted shares		273		271		272		270
Diluted earnings per common share	$	7.59	$	2.07	$	12.63	$	7.31
Anti-dilutive options excluded from diluted earnings per    common share		1.9		4.0		2.6		4.7

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

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Income Taxes (Tables)

9 Months Ended

Feb. 28, 2018

Income Tax Disclosure [Abstract]

Summary of Reconciliation Tax Rates

The following table provides a reconciliation of the 2017 effective tax rates to the 2018 effective tax rates, including the impact of the TCJA, for the periods ended February 28:

	Three Months Ended			Nine Months Ended
	2018			2018
2017 Effective Tax Rate		37.5	%		36.6	%
Remeasurement of net U.S. deferred tax liability		(131.5	)		(38.4	)
Effect of February 2018 pension contribution (a)		(23.3	)		(6.8	)
Lower statutory tax rate		(18.9	)		(5.5	)
Transition tax		(4.1	)		(1.2	)
Other (b)		3.0			0.3
2018 Effective Tax Rate		(137.3	)%		(15.0	)%

(a) The benefit is from the pension contribution deducted on our 2017 tax return at a tax rate of 35%.

(b) The 2018 tax rates were negatively impacted by the effect of the NotPetya cyberattack, changes in uncertain tax positions and tax rate impacts on changes in deferred tax items after the TCJA enactment and were favorably impacted from foreign tax credits associated with a second quarter dividend from foreign operations.

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Retirement Plans (Tables)

9 Months Ended

Feb. 28, 2018

Retirement Plan Tables [Abstract]

Schedule of Retirement Plan Costs

Our retirement plans costs for the periods ended February 28 were as follows (in millions):

	Three Months Ended				Nine Months Ended
	2018		2017		2018		2017
Defined benefit pension plans	$	39	$	57	$	113	$	173
Defined contribution plans		135		117		386		348
Postretirement healthcare plans		19		19		56		57
	$	193	$	193	$	555	$	578

Schedule of Net Periodic Benefit Cost

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended February 28 included the following components (in millions):

	Three Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2018			2017			2018			2017			2018		2017
Service cost	$	169		$	160		$	23		$	20		$	9	$	9
Interest cost		279			282			12			11			10		10
Expected return on plan assets		(406	)		(375	)		(10	)		(9	)		—		—
Amortization of prior service credit and other		(29	)		(30	)		1			(2	)		—		—
	$	13		$	37		$	26		$	20		$	19	$	19
	Nine Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2018			2017			2018			2017			2018		2017
Service cost	$	509		$	479		$	69		$	61		$	27	$	27
Interest cost		836			846			37			33			29		30
Expected return on plan assets		(1,218	)		(1,126	)		(32	)		(30	)		—		—
Amortization of prior service credit and other		(88	)		(89	)		—			(1	)		—		—
	$	39		$	110		$	74		$	63		$	56	$	57

Schedule of Contributions to Pension Plans

Contributions to our U.S. Pension Plans for the nine-month periods ended February 28 were as follows (in millions):

	2018		2017
Required	$	22	$	444
Voluntary		2,478		1,306
	$	2,500	$	1,750

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Business Segment Information (Tables)

9 Months Ended

Feb. 28, 2018

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 February 28 (in millions):

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017
Revenues
FedEx Express segment	$	9,370		$	8,569		$	27,376		$	25,671
FedEx Ground segment		5,222			4,688			14,790			13,397
FedEx Freight segment		1,694			1,492			5,208			4,747
FedEx Services segment		397			389			1,213			1,198
Eliminations and other		(157	)		(141	)		(451	)		(422	)
	$	16,526		$	14,997		$	48,136		$	44,591
Operating Income
FedEx Express segment	$	424		$	557		$	1,574		$	1,873
FedEx Ground segment		634			515			1,781			1,590
FedEx Freight segment		55			41			349			264
Eliminations, corporate and other		(112	)		(88	)		(324	)		(271	)
	$	1,001		$	1,025		$	3,380		$	3,456

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Commitments (Tables)

9 Months Ended

Feb. 28, 2018

Commitments Tables [Abstract]

Schedule of Purchase Commitments

As of February 28, 2018, 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)	$	516	$	254	$	770
2019		1,789		725		2,514
2020		1,931		621		2,552
2021		1,244		400		1,644
2022		1,364		251		1,615
Thereafter		3,314		508		3,822
Total	$	10,158	$	2,759	$	12,917

⁽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 February 28, 2018 with the year of expected delivery:

	Cessna SkyCourier 408		ATR 72-600F		B767F		B777F		Total
2018 (remainder)		-		-		4		1		5
2019		-		-		15		3		18
2020		-		-		16		6		22
2021		12		5		10		-		27
2022		12		6		10		3		31
Thereafter		26		19		6		-		51
Total		50		30		61		13		154

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 February 28, 2018 is as follows (in millions):

	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2018 (remainder)	$	47	$	585	$	632
2019		343		2,065		2,408
2020		261		1,854		2,115
2021		203		1,675		1,878
2022		185		1,510		1,695
Thereafter		175		9,018		9,193
Total	$	1,214	$	16,707	$	17,921

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Feb. 28, 2018

Supplemental Cash Flow Tables [Abstract]

Supplemental Cash Flow

Cash paid for interest expense and income taxes for the nine-month periods ended February 28 was as follows (in millions):

	2018			2017
Cash payments for:
Interest (net of capitalized interest)	$	430		$	400
Income taxes	$	707		$	294
Income tax refunds received		(59	)		(16	)
Cash tax payments, net	$	648		$	278

XML

Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Feb. 28, 2018

Condensed Consolidating Financial Statements Tables [Abstract]

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEETS

(UNAUDITED)

February 28, 2018

			Guarantor		Non-guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	957	$	375	$	1,494	$	(37	)	$	2,789
Receivables, less allowances		1		5,308		3,462		(100	)		8,671
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances		920		928		267		—			2,115
Total current assets		1,878		6,611		5,223		(137	)		13,575
PROPERTY AND EQUIPMENT, AT COST		22		50,601		3,754		—			54,377
Less accumulated depreciation and amortization		18		24,999		1,663		—			26,680
Net property and equipment		4		25,602		2,091		—			27,697
INTERCOMPANY RECEIVABLE		1,401		2,508		130		(4,039	)		—
GOODWILL		—		1,571		5,893		—			7,464
INVESTMENT IN SUBSIDIARIES		31,295		2,928		—		(34,223	)		—
OTHER ASSETS		2,706		1,566		1,268		(2,425	)		3,115
	$	37,284	$	40,786	$	14,605	$	(40,824	)	$	51,851
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings	$	799	$	—	$	—	$	—		$	799
Current portion of long-term debt		750		6		8		—			764
Accrued salaries and employee benefits		69		1,362		514		—			1,945
Accounts payable		149		1,483		1,607		(137	)		3,102
Accrued expenses		379		1,605		909		—			2,893
Total current liabilities		2,146		4,456		3,038		(137	)		9,503
LONG-TERM DEBT, LESS CURRENT PORTION		15,713		288		16		—			16,017
INTERCOMPANY PAYABLE		—		—		4,039		(4,039	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		4,285		541		(2,425	)		2,401
Other liabilities		531		3,605		900		—			5,036
Total other long-term liabilities		531		7,890		1,441		(2,425	)		7,437
STOCKHOLDERS’ INVESTMENT		18,894		28,152		6,071		(34,223	)		18,894
	$	37,284	$	40,786	$	14,605	$	(40,824	)	$	51,851

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 February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	12,433		$	4,229		$	(136	)	$	16,526
OPERATING EXPENSES:
Salaries and employee benefits		39			4,623			1,319			—			5,981
Purchased transportation		—			2,459			1,560			(84	)		3,935
Rentals and landing fees		2			684			189			(2	)		873
Depreciation and amortization		1			670			115			—			786
Fuel		—			837			77			—			914
Maintenance and repairs		1			543			84			—			628
Intercompany charges, net		(114	)		185			(71	)		—			—
Other		71			1,596			791			(50	)		2,408
		—			11,597			4,064			(136	)		15,525
OPERATING INCOME		—			836			165			—			1,001
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		2,074			2			—			(2,076	)		—
Interest, net		(137	)		11			1			—			(125	)
Intercompany charges, net		140			(78	)		(62	)		—			—
Other, net		(3	)		104			(103	)		—			(2	)
INCOME BEFORE INCOME TAXES		2,074			875			1			(2,076	)		874
Provision for income taxes		—			(1,197	)		(3	)		—			(1,200	)
NET INCOME	$	2,074		$	2,072		$	4		$	(2,076	)	$	2,074
COMPREHENSIVE INCOME	$	2,051		$	2,069		$	107		$	(2,076	)	$	2,151

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	11,275		$	3,794		$	(72	)	$	14,997
OPERATING EXPENSES:
Salaries and employee benefits		29			4,210			1,156			—			5,395
Purchased transportation		—			2,219			1,306			(27	)		3,498
Rentals and landing fees		1			657			177			(1	)		834
Depreciation and amortization		1			649			112			—			762
Fuel		—			657			78			—			735
Maintenance and repairs		1			514			73			—			588
Intercompany charges, net		(87	)		(33	)		120			—			—
Other		55			1,428			721			(44	)		2,160
		—			10,301			3,743			(72	)		13,972
OPERATING INCOME		—			974			51			—			1,025
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		562			(41	)		—			(521	)		—
Interest, net		(129	)		6			1			—			(122	)
Intercompany charges, net		130			(79	)		(51	)		—			—
Other, net		(1	)		(118	)		115			—			(4	)
INCOME BEFORE INCOME TAXES		562			742			116			(521	)		899
Provision for income taxes		—			280			57			—			337
NET INCOME	$	562		$	462		$	59		$	(521	)	$	562
COMPREHENSIVE INCOME	$	543		$	444		$	187		$	(521	)	$	653

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Nine Months Ended February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	36,044		$	12,445		$	(353	)	$	48,136
OPERATING EXPENSES:
Salaries and employee benefits		112			13,289			3,840			—			17,241
Purchased transportation		—			6,836			4,600			(216	)		11,220
Rentals and landing fees		4			1,951			577			(6	)		2,526
Depreciation and amortization		1			1,958			334			—			2,293
Fuel		—			2,220			215			—			2,435
Maintenance and repairs		1			1,729			238			—			1,968
Intercompany charges, net		(325	)		298			27			—			—
Other		207			4,664			2,333			(131	)		7,073
		—			32,945			12,164			(353	)		44,756
OPERATING INCOME		—			3,099			281			—			3,380
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		3,445			39			—			(3,484	)		—
Interest, net		(396	)		35			(2	)		—			(363	)
Intercompany charges, net		403			(220	)		(183	)		—			—
Other, net		(7	)		88			(103	)		—			(22	)
INCOME BEFORE INCOME TAXES		3,445			3,041			(7	)		(3,484	)		2,995
Provision for income taxes		—			(573	)		123			—			(450	)
NET INCOME	$	3,445		$	3,614		$	(130	)	$	(3,484	)	$	3,445
COMPREHENSIVE INCOME	$	3,385		$	3,605		$	(3	)	$	(3,484	)	$	3,503

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Nine Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	33,175		$	11,628		$	(212	)	$	44,591
OPERATING EXPENSES:
Salaries and employee benefits		94			12,477			3,488			—			16,059
Purchased transportation		—			6,210			4,040			(81	)		10,169
Rentals and landing fees		4			1,902			524			(4	)		2,426
Depreciation and amortization		1			1,894			346			—			2,241
Fuel		—			1,819			224			—			2,043
Maintenance and repairs		1			1,544			220			—			1,765
Intercompany charges, net		(266	)		67			199			—			—
Other		166			4,230			2,163			(127	)		6,432
		—			30,143			11,204			(212	)		41,135
OPERATING INCOME		—			3,032			424			—			3,456
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries		1,977			69			—			(2,046	)		—
Interest, net		(374	)		19			1			—			(354	)
Intercompany charges, net		376			(224	)		(152	)		—			—
Other, net		(2	)		(128	)		147			—			17
INCOME BEFORE INCOME TAXES		1,977			2,768			420			(2,046	)		3,119
Provision for income taxes		—			951			191			—			1,142
NET INCOME	$	1,977		$	1,817		$	229		$	(2,046	)	$	1,977
COMPREHENSIVE INCOME	$	1,921		$	1,781		$	156		$	(2,046	)	$	1,812

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended February 28, 2018

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(3,537	)	$	4,664		$	25		$	10		$	1,162
INVESTING ACTIVITIES
Capital expenditures		—			(3,746	)		(248	)		—			(3,994	)
Business acquisitions, net of cash acquired		—			(44	)		—			—			(44	)
Proceeds from asset dispositions and other		(5	)		23			3			—			21
CASH USED IN INVESTING    ACTIVITIES		(5	)		(3,767	)		(245	)		—			(4,017	)
FINANCING ACTIVITIES
Proceeds from short-term borrowings, net		797			—			—			—			797
Net transfers from (to) Parent		807			(895	)		88			—			—
Payment on loan between subsidiaries		210			—			(210	)		—			—
Proceeds from debt issuances		1,481			—			—			—			1,481
Principal payments on debt		—			(17	)		(14	)		—			(31	)
Proceeds from stock issuances		284			—			—			—			284
Dividends paid		(402	)		—			—			—			(402	)
Purchase of treasury stock		(558	)		—			—			—			(558	)
Other, net		2			4			—			—			6
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		2,621			(908	)		(136	)		—			1,577
Effect of exchange rate changes on cash		(6	)		61			43			—			98
Net (decrease) increase in cash and cash equivalents		(927	)		50			(313	)		10			(1,180	)
Cash and cash equivalents at beginning of period		1,884			325			1,807			(47	)		3,969
Cash and cash equivalents at end of period	$	957		$	375		$	1,494		$	(37	)	$	2,789

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Nine Months Ended February 28, 2017

	Parent			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES	$	(1,497	)	$	3,615		$	529		$	(2	)	$	2,645
INVESTING ACTIVITIES
Capital expenditures		—			(3,456	)		(334	)		—			(3,790	)
Proceeds from asset dispositions and other		85			16			22			—			123
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		85			(3,440	)		(312	)		—			(3,667	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		117			(148	)		31			—			—
Payment on loan between subsidiaries		36			(15	)		(21	)		—			—
Intercompany dividends		—			1			(1	)		—			—
Principal payments on debt		—			(33	)		(16	)		—			(49	)
Proceeds from debt issuances		1,190			—			—			—			1,190
Proceeds from stock issuances		265			—			—			—			265
Dividends paid		(319	)		—			—			—			(319	)
Purchase of treasury stock		(358	)		—			—			—			(358	)
Other, net		(8	)		(12	)		22			—			2
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES		923			(207	)		15			—			731
Effect of exchange rate changes on cash		(10	)		7			(67	)		—			(70	)
Net (decrease) increase in cash and cash equivalents		(499	)		(25	)		165			(2	)		(361	)
Cash and cash equivalents at beginning of period		1,974			326			1,277			(43	)		3,534
Cash and cash equivalents at end of period	$	1,475		$	301		$	1,442		$	(45	)	$	3,173

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General - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		9 Months Ended
	Oct. 13, 2017	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017	Jan. 26, 2016
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Stock-based compensation		$ 32	$ 31	$ 135	$ 123
Operating income		1,001	1,025	3,380	3,456
Lease liability and related right-of-use asset		$ 13,000		$ 13,000
Stock Repurchase Program Number Of Shares Authorized To Be Repurchased						25,000,000
Number of Shares Repurchased		1,200,000		2,400,000
Treasury Stock Acquired, Average Cost Per Share		$ 248.73		$ 232.00
Payments for Repurchase of Common Stock		$ 288		$ 558	358
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased		13,600,000		13,600,000
Dividends Payable, Date Declared		Feb. 16, 2018
Dividends Payable Amount Per Share		$ 0.50		$ 0.50
Dividends Payable, Date To Be Paid		Apr. 02, 2018
Dividends Payable, Date Of Record		Mar. 12, 2018
ASU 201703 [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Operating income		$ 143	$ 113	$ 436	$ 337
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		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance			$ 16,073
Translation adjustments	$ 100	$ 110	119	$ (108)
Ending balance	18,894		18,894
Foreign Currency Translation Loss [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(666)	(732)	(685)	(514)
Translation adjustments	100	110	119	(108)
Ending balance	(566)	(622)	(566)	(622)
Retirement Plans Adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	232	307	270	345
Reclassifications from AOCI	(23)	(19)	(61)	(57)
Ending balance	209	288	209	288
Accumulated Other Comprehensive (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Ending balance	$ (357)	$ (334)	$ (357)	$ (334)

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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		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Salaries and employee benefits	$ 30	$ 31	$ 90	$ 91
Provision for income taxes	(7)	(12)	(29)	(34)
Net income	$ 23	$ 19	$ 61	$ 57

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Financing Arrangements - Additional Information (Details) - USD ($)	9 Months Ended
	Feb. 28, 2018	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
Financial Covenant Terms Ratio	350.00%
Financial Covenant Compliance Ratio	220.00%
Commercial paper outstanding	$ 800,000,000
Letters Of Credit Outstanding	54,000,000
Long Term Debt Exclusive of Capital Leases Carrying Value	16,700,000,000		$ 14,900,000,000
Long Term Debt Exclusive Of Capital Leases Fair Value	$ 17,000,000,000		$ 15,500,000,000
Long-term debt weighted-average interest rate	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	$ 2,000,000,000	$ 1,750,000,000
Line of credit facility outstanding for future borrowings	1,146,000,000
Senior Unsecured Debt due February 2028 and February 2048 [Member]
Line Of Credit Facility [Line Items]
Senior Unsecured Debt Issued	$ 1,500,000,000
Senior Unsecured Debt, Frequency of Periodic Interest Payment	semi-annually
3.40% Senior Unsecured Debt due February 2028 [Member]
Line Of Credit Facility [Line Items]
Senior Unsecured Debt Issued	$ 500,000,000
Senior Unsecured Debt, Fixed Interest Rate Percentage	3.40%
Senior Unsecured Debt, Maturity Date	Feb. 29, 2028
4.05% Senior Unsecured Debt due February 2048 [Member]
Line Of Credit Facility [Line Items]
Senior Unsecured Debt Issued	$ 1,000,000,000
Senior Unsecured Debt, Fixed Interest Rate Percentage	4.05%
Senior Unsecured Debt, Maturity Date	Feb. 29, 2048

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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		9 Months Ended
		Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Basic earnings per common share:
Net earnings allocable to common shares	[1]	$ 2,071	$ 561	$ 3,441	$ 1,974
Weighted-average common shares		268.0	266.0	268.0	266.0
Basic earnings per common share		$ 7.74	$ 2.11	$ 12.85	$ 7.43
Diluted earnings per common share:
Net earnings allocable to common shares	[1]	$ 2,071	$ 561	$ 3,441	$ 1,974
Weighted-average common shares		268.0	266.0	268.0	266.0
Dilutive effect of share-based awards		5.0	5.0	4.0	4.0
Weighted-average diluted shares		273.0	271.0	272.0	270.0
Diluted earnings per common share		$ 7.59	$ 2.07	$ 12.63	$ 7.31
Anti-dilutive options excluded from diluted earnings per common share		1.9	4.0	2.6	4.7

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

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended	5 Months Ended	7 Months Ended	9 Months Ended		12 Months Ended
	Feb. 07, 2018	Feb. 28, 2018	May 31, 2018	Dec. 31, 2017	Feb. 28, 2018	Feb. 28, 2017	May 31, 2019	May 31, 2018
Income Taxes [Line Items]
Statutory federal income tax rate				35.00%
Measurement period					1 year
Provisional benefit related to remeasurement of net U.S. deferred tax liability		$ 1,150
Provisional benefit from foreign tax credits exceeding one-time transition tax on deferred foreign earnings		36
U.S. Pension Plans [Member]
Income Taxes [Line Items]
Additional provisional amount recognized one time benefit		$ 204
Benefit of contribution	$ 1,500				$ 2,500	$ 1,750
Scenario Plan [Member]
Income Taxes [Line Items]
Statutory federal income tax rate			29.20%				21.00%
Scenario, Forecast [Member]
Income Taxes [Line Items]
Income tax benefit related to lower statutory income tax rate year-to-date earnings								$ 165

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Income Taxes - Reconciliation of the Effective Income Tax Rate (Details)		3 Months Ended		9 Months Ended
		Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Income Tax Disclosure [Abstract]
Effective Tax Rate		(137.30%)	37.50%	(15.00%)	36.60%
Remeasurement of net U.S. deferred tax liability		(131.50%)		(38.40%)
Effect of February 2018 pension contribution	[1]	(23.30%)		(6.80%)
Lower statutory tax rate		(18.90%)		(5.50%)
Transition tax		(4.10%)		(1.20%)
Other	[2]	3.00%		0.30%

[1] The benefit is from the pension contribution deducted on our 2017 tax return at a tax rate of 35%.

[2] The 2018 tax rates were negatively impacted by the effect of the NotPetya cyberattack, changes in uncertain tax positions and tax rate impacts on changes in deferred tax items after the TCJA enactment and were favorably impacted from foreign tax credits associated with a second quarter dividend from foreign operations.

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Income Taxes - Reconciliation of the Effective Income Tax Rate (Parenthetical) (Details)	7 Months Ended
	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Tax rate	35.00%

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Retirement Plans - Schedule of Retirement Plan Costs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Pension And Other Postretirement Benefit Expense [Abstract]
Defined benefit pension plans	$ 39	$ 57	$ 113	$ 173
Defined contribution plans	135	117	386	348
Postretirement healthcare plans	19	19	56	57
Retirement plans costs	$ 193	$ 193	$ 555	$ 578

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Retirement Plans - Schedule of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Pension Plans [Member] | U.S. Pension Plans [Member]
Net Periodic Benefit Cost
Service cost	$ 169	$ 160	$ 509	$ 479
Interest cost	279	282	836	846
Expected return on plan assets	(406)	(375)	(1,218)	(1,126)
Amortization of prior service credit and other	(29)	(30)	(88)	(89)
Total net periodic benefit cost	13	37	39	110
Pension Plans [Member] | International Pension Plans [Member]
Net Periodic Benefit Cost
Service cost	23	20	69	61
Interest cost	12	11	37	33
Expected return on plan assets	(10)	(9)	(32)	(30)
Amortization of prior service credit and other	1	(2)		(1)
Total net periodic benefit cost	26	20	74	63
Postretirement Healthcare Plans [Member]
Net Periodic Benefit Cost
Service cost	9	9	27	27
Interest cost	10	10	29	30
Total net periodic benefit cost	$ 19	$ 19	$ 56	$ 57

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Retirement Plans - Schedule of Contributions to Pension Plans (Details) - U.S. Pension Plans [Member] - USD ($) $ in Millions		3 Months Ended	9 Months Ended
	Feb. 07, 2018	Feb. 28, 2018	Feb. 28, 2018	Feb. 28, 2017
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Contributions By Employer	$ 1,500		$ 2,500	$ 1,750
Required Contribution [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Contributions By Employer			22	444
Voluntary Contribution [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Contributions By Employer		$ 1,750	$ 2,478	$ 1,306

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Retirement Plans - Additional Information (Details) - U.S. Pension Plans [Member] - USD ($) $ in Millions		3 Months Ended	9 Months Ended
	Feb. 07, 2018	Feb. 28, 2018	Feb. 28, 2018	Feb. 28, 2017
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Contributions By Employer	$ 1,500		$ 2,500	$ 1,750
Voluntary Contribution [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan Contributions By Employer		$ 1,750	$ 2,478	$ 1,306

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Business Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Segment Reporting Information [Line Items]
Revenues	$ 16,526	$ 14,997	$ 48,136	$ 44,591
Operating Income	1,001	1,025	3,380	3,456
FedEx Express Segment [Member]
Segment Reporting Information [Line Items]
Revenues	9,370	8,569	27,376	25,671
Operating Income	424	557	1,574	1,873
FedEx Ground Segment [Member]
Segment Reporting Information [Line Items]
Revenues	5,222	4,688	14,790	13,397
Operating Income	634	515	1,781	1,590
FedEx Freight Segment [Member]
Segment Reporting Information [Line Items]
Revenues	1,694	1,492	5,208	4,747
Operating Income	55	41	349	264
FedEx Services Segment [Member]
Segment Reporting Information [Line Items]
Revenues	397	389	1,213	1,198
Eliminations, Corporate and Other [Member]
Segment Reporting Information [Line Items]
Revenues	(157)	(141)	(451)	(422)
Operating Income	$ (112)	$ (88)	$ (324)	$ (271)

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Commitments - Schedule of Purchase Commitments (Details) $ in Millions	Feb. 28, 2018 USD ($)
Unrecorded Unconditional Purchase Obligation [Line Items]
2018 (remainder)	$ 770
2019	2,514
2020	2,552
2021	1,644
2022	1,615
Thereafter	3,822
Total	12,917
Aircraft And Related Equipment Commitments [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
2018 (remainder)	516
2019	1,789
2020	1,931
2021	1,244
2022	1,364
Thereafter	3,314
Total	10,158
Other Commitments [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
2018 (remainder)	254	[1]
2019	725	[1]
2020	621	[1]
2021	400	[1]
2022	251	[1]
Thereafter	508	[1]
Total	$ 2,759	[1]

[1] Primarily equipment and advertising contracts.

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Commitments - Additional Information (Details) $ in Millions	3 Months Ended	9 Months Ended
	Feb. 28, 2018 USD ($) air-craft	Feb. 28, 2018 USD ($) air-craft
Other Aircraft Commitments Disclosure [Abstract]
Boeing 767F Conditional Aircraft Commitments		4
Boeing 777F Conditional Aircraft Commitments		3
Deposit and Progress Payments | $	$ 922	$ 922
B777F Aircraft from 2021 to 2020 [Member]
Other Aircraft Commitments Disclosure [Abstract]
Accelerate Delivery of Boeing 777F Conditional Aircraft Commitments	2
Aircraft expected to be delivered, earliest fiscal year	2020
Aircraft expected to be delivered, latest fiscal year	2021
B777F Aircraft from 2021 to 2019 [Member]
Other Aircraft Commitments Disclosure [Abstract]
Accelerate Delivery of Boeing 777F Conditional Aircraft Commitments	1
Aircraft expected to be delivered, earliest fiscal year	2019
Aircraft expected to be delivered, latest fiscal year	2021
B777F Aircraft from 2022 to 2020 [Member]
Other Aircraft Commitments Disclosure [Abstract]
Accelerate Delivery of Boeing 777F Conditional Aircraft Commitments	1
Aircraft expected to be delivered, earliest fiscal year	2020
Aircraft expected to be delivered, latest fiscal year	2022

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Commitments - Schedule of Aircraft Purchase Commitments (Details)	9 Months Ended
	Feb. 28, 2018 air-craft
Schedule of Aircraft Commitments [Line Items]
2018 (remainder)	5
2019	18
2020	22
2021	27
2022	31
Thereafter	51
Total	154
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)	4
2019	15
2020	16
2021	10
2022	10
Thereafter	6
Total	61
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	3
2020	6
2022	3
Total	13

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Commitments - Schedule of Future Minimum Lease Payments, Operating Leases (Details) $ in Millions	Feb. 28, 2018 USD ($)
Schedule of Future Minimum Operating Lease Payments [Line Items]
2018 (remainder)	$ 632
2019	2,408
2020	2,115
2021	1,878
2022	1,695
Thereafter	9,193
Total	17,921
Aircraft and Related Equipment [Member]
Schedule of Future Minimum Operating Lease Payments [Line Items]
2018 (remainder)	47
2019	343
2020	261
2021	203
2022	185
Thereafter	175
Total	1,214
Facilities and Other [Member]
Schedule of Future Minimum Operating Lease Payments [Line Items]
2018 (remainder)	585
2019	2,065
2020	1,854
2021	1,675
2022	1,510
Thereafter	9,018
Total	$ 16,707

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Contingencies - Additional Information (Details) - U.S. Customs and Border Protection ("CBP") [Member] - Expected Litigation Loss [Member] - USD ($) $ in Millions	3 Months Ended
	Aug. 31, 2017	May 31, 2017
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	9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Supplemental Cash Flow Information [Abstract]
Interest (net of capitalized interest)	$ 430	$ 400
Income taxes	707	294
Income tax refunds received	(59)	(16)
Cash tax payments, net	$ 648	$ 278

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Condensed Consolidating Financial Statements - Additional Information (Details) $ in Billions	Feb. 28, 2018 USD ($)
Guarantor Obligations [Abstract]
Long- term debt Guarantee	$ 16.6

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Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions	Feb. 28, 2018	May 31, 2017	Feb. 28, 2017	May 31, 2016
CURRENT ASSETS
Cash and cash equivalents	$ 2,789	$ 3,969	$ 3,173	$ 3,534
Receivables, less allowances	8,671	7,599
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	2,115	1,060
Total current assets	13,575	12,628
PROPERTY AND EQUIPMENT, AT COST	54,377	50,626
Less accumulated depreciation and amortization	26,680	24,645
Net property and equipment	27,697	25,981
GOODWILL	7,464	7,154
OTHER ASSETS	3,115	2,789
ASSETS	51,851	48,552
CURRENT LIABILITIES
Short-term borrowings	799
Current portion of long-term debt	764	22
Accrued salaries and employee benefits	1,945	1,914
Accounts payable	3,102	2,752
Accrued expenses	2,893	3,230
Total current liabilities	9,503	7,918
LONG-TERM DEBT, LESS CURRENT PORTION	16,017	14,909
OTHER LONG-TERM LIABILITIES
Deferred income taxes	2,401	2,485
Other liabilities	5,036	7,167
Total other long-term liabilities	7,437	9,652
STOCKHOLDERS’ INVESTMENT	18,894	16,073
LIABILITIES AND STOCKHOLDERS' INVESTMENT	51,851	48,552
Consolidation Eliminations [Member]
CURRENT ASSETS
Cash and cash equivalents	(37)	(47)	(45)	(43)
Receivables, less allowances	(100)	(61)
Total current assets	(137)	(108)
INTERCOMPANY RECEIVABLE	(4,039)	(4,128)
INVESTMENT IN SUBSIDIARIES	(34,223)	(30,348)
OTHER ASSETS	(2,425)	(3,225)
ASSETS	(40,824)	(37,809)
CURRENT LIABILITIES
Accounts payable	(137)	(108)
Total current liabilities	(137)	(108)
INTERCOMPANY PAYABLE	(4,039)	(4,128)
OTHER LONG-TERM LIABILITIES
Deferred income taxes	(2,425)	(3,225)
Total other long-term liabilities	(2,425)	(3,225)
STOCKHOLDERS’ INVESTMENT	(34,223)	(30,348)
LIABILITIES AND STOCKHOLDERS' INVESTMENT	(40,824)	(37,809)
Parent Company [Member] | Reportable Legal Entities [Member]
CURRENT ASSETS
Cash and cash equivalents	957	1,884	1,475	1,974
Receivables, less allowances	1	3
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	920	25
Total current assets	1,878	1,912
PROPERTY AND EQUIPMENT, AT COST	22	22
Less accumulated depreciation and amortization	18	18
Net property and equipment	4	4
INTERCOMPANY RECEIVABLE	1,401	1,521
INVESTMENT IN SUBSIDIARIES	31,295	27,712
OTHER ASSETS	2,706	3,494
ASSETS	37,284	34,643
CURRENT LIABILITIES
Short-term borrowings	799
Current portion of long-term debt	750
Accrued salaries and employee benefits	69	72
Accounts payable	149	10
Accrued expenses	379	991
Total current liabilities	2,146	1,073
LONG-TERM DEBT, LESS CURRENT PORTION	15,713	14,641
OTHER LONG-TERM LIABILITIES
Other liabilities	531	2,856
Total other long-term liabilities	531	2,856
STOCKHOLDERS’ INVESTMENT	18,894	16,073
LIABILITIES AND STOCKHOLDERS' INVESTMENT	37,284	34,643
Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
CURRENT ASSETS
Cash and cash equivalents	375	325	301	326
Receivables, less allowances	5,308	4,729
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	928	787
Total current assets	6,611	5,841
PROPERTY AND EQUIPMENT, AT COST	50,601	47,201
Less accumulated depreciation and amortization	24,999	23,211
Net property and equipment	25,602	23,990
INTERCOMPANY RECEIVABLE	2,508	2,607
GOODWILL	1,571	1,571
INVESTMENT IN SUBSIDIARIES	2,928	2,636
OTHER ASSETS	1,566	1,271
ASSETS	40,786	37,916
CURRENT LIABILITIES
Current portion of long-term debt	6	9
Accrued salaries and employee benefits	1,362	1,335
Accounts payable	1,483	1,411
Accrued expenses	1,605	1,522
Total current liabilities	4,456	4,277
LONG-TERM DEBT, LESS CURRENT PORTION	288	244
OTHER LONG-TERM LIABILITIES
Deferred income taxes	4,285	5,472
Other liabilities	3,605	3,448
Total other long-term liabilities	7,890	8,920
STOCKHOLDERS’ INVESTMENT	28,152	24,475
LIABILITIES AND STOCKHOLDERS' INVESTMENT	40,786	37,916
Non Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
CURRENT ASSETS
Cash and cash equivalents	1,494	1,807	$ 1,442	$ 1,277
Receivables, less allowances	3,462	2,928
Spare parts, supplies, fuel, prepaid expenses and other, less allowances	267	248
Total current assets	5,223	4,983
PROPERTY AND EQUIPMENT, AT COST	3,754	3,403
Less accumulated depreciation and amortization	1,663	1,416
Net property and equipment	2,091	1,987
INTERCOMPANY RECEIVABLE	130
GOODWILL	5,893	5,583
OTHER ASSETS	1,268	1,249
ASSETS	14,605	13,802
CURRENT LIABILITIES
Current portion of long-term debt	8	13
Accrued salaries and employee benefits	514	507
Accounts payable	1,607	1,439
Accrued expenses	909	717
Total current liabilities	3,038	2,676
LONG-TERM DEBT, LESS CURRENT PORTION	16	24
INTERCOMPANY PAYABLE	4,039	4,128
OTHER LONG-TERM LIABILITIES
Deferred income taxes	541	238
Other liabilities	900	863
Total other long-term liabilities	1,441	1,101
STOCKHOLDERS’ INVESTMENT	6,071	5,873
LIABILITIES AND STOCKHOLDERS' INVESTMENT	$ 14,605	$ 13,802

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Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Condensed Financial Statements Captions [Line Items]
REVENUES	$ 16,526	$ 14,997	$ 48,136	$ 44,591
OPERATING EXPENSES:
Salaries and employee benefits	5,981	5,395	17,241	16,059
Purchased transportation	3,935	3,498	11,220	10,169
Rentals and landing fees	873	834	2,526	2,426
Depreciation and amortization	786	762	2,293	2,241
Fuel	914	735	2,435	2,043
Maintenance and repairs	628	588	1,968	1,765
Other	2,408	2,160	7,073	6,432
OPERATING EXPENSES	15,525	13,972	44,756	41,135
OPERATING INCOME	1,001	1,025	3,380	3,456
OTHER INCOME (EXPENSE):
Interest, net	(125)	(122)	(363)	(354)
Other, net	(2)	(4)	(22)	17
INCOME BEFORE INCOME TAXES	874	899	2,995	3,119
PROVISION FOR INCOME TAXES	(1,200)	337	(450)	1,142
NET INCOME	2,074	562	3,445	1,977
COMPREHENSIVE INCOME	2,151	653	3,503	1,812
Consolidation Eliminations [Member]
Condensed Financial Statements Captions [Line Items]
REVENUES	(136)	(72)	(353)	(212)
OPERATING EXPENSES:
Purchased transportation	(84)	(27)	(216)	(81)
Rentals and landing fees	(2)	(1)	(6)	(4)
Other	(50)	(44)	(131)	(127)
OPERATING EXPENSES	(136)	(72)	(353)	(212)
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	(2,076)	(521)	(3,484)	(2,046)
INCOME BEFORE INCOME TAXES	(2,076)	(521)	(3,484)	(2,046)
NET INCOME	(2,076)	(521)	(3,484)	(2,046)
COMPREHENSIVE INCOME	(2,076)	(521)	(3,484)	(2,046)
Parent Company [Member] | Reportable Legal Entities [Member]
OPERATING EXPENSES:
Salaries and employee benefits	39	29	112	94
Rentals and landing fees	2	1	4	4
Depreciation and amortization	1	1	1	1
Maintenance and repairs	1	1	1	1
Intercompany charges, net	(114)	(87)	(325)	(266)
Other	71	55	207	166
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	2,074	562	3,445	1,977
Interest, net	(137)	(129)	(396)	(374)
Intercompany charges, net	140	130	403	376
Other, net	(3)	(1)	(7)	(2)
INCOME BEFORE INCOME TAXES	2,074	562	3,445	1,977
NET INCOME	2,074	562	3,445	1,977
COMPREHENSIVE INCOME	2,051	543	3,385	1,921
Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
REVENUES	12,433	11,275	36,044	33,175
OPERATING EXPENSES:
Salaries and employee benefits	4,623	4,210	13,289	12,477
Purchased transportation	2,459	2,219	6,836	6,210
Rentals and landing fees	684	657	1,951	1,902
Depreciation and amortization	670	649	1,958	1,894
Fuel	837	657	2,220	1,819
Maintenance and repairs	543	514	1,729	1,544
Intercompany charges, net	185	(33)	298	67
Other	1,596	1,428	4,664	4,230
OPERATING EXPENSES	11,597	10,301	32,945	30,143
OPERATING INCOME	836	974	3,099	3,032
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries	2	(41)	39	69
Interest, net	11	6	35	19
Intercompany charges, net	(78)	(79)	(220)	(224)
Other, net	104	(118)	88	(128)
INCOME BEFORE INCOME TAXES	875	742	3,041	2,768
PROVISION FOR INCOME TAXES	(1,197)	280	(573)	951
NET INCOME	2,072	462	3,614	1,817
COMPREHENSIVE INCOME	2,069	444	3,605	1,781
Non Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
REVENUES	4,229	3,794	12,445	11,628
OPERATING EXPENSES:
Salaries and employee benefits	1,319	1,156	3,840	3,488
Purchased transportation	1,560	1,306	4,600	4,040
Rentals and landing fees	189	177	577	524
Depreciation and amortization	115	112	334	346
Fuel	77	78	215	224
Maintenance and repairs	84	73	238	220
Intercompany charges, net	(71)	120	27	199
Other	791	721	2,333	2,163
OPERATING EXPENSES	4,064	3,743	12,164	11,204
OPERATING INCOME	165	51	281	424
OTHER INCOME (EXPENSE):
Interest, net	1	1	(2)	1
Intercompany charges, net	(62)	(51)	(183)	(152)
Other, net	(103)	115	(103)	147
INCOME BEFORE INCOME TAXES	1	116	(7)	420
PROVISION FOR INCOME TAXES	(3)	57	123	191
NET INCOME	4	59	(130)	229
COMPREHENSIVE INCOME	$ 107	$ 187	$ (3)	$ 156

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Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Feb. 28, 2018	Feb. 28, 2018	Feb. 28, 2017
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$ 1,162	$ 2,645
Investing Activities:
Capital expenditures		(3,994)	(3,790)
Business acquisitions, net of cash acquired		(44)
Proceeds from asset dispositions and other		21	123
Cash used in investing activities		(4,017)	(3,667)
Financing Activities:
Proceeds from short-term borrowings, net		797
Proceeds from debt issuances		1,481	1,190
Principal payments on debt		(31)	(49)
Proceeds from stock issuances		284	265
Dividends paid		(402)	(319)
Purchase of treasury stock	$ (288)	(558)	(358)
Other, net		6	2
Cash provided by financing activities		1,577	731
Effect of exchange rate changes on cash		98	(70)
Net decrease in cash and cash equivalents		(1,180)	(361)
Cash and cash equivalents at beginning of period		3,969	3,534
Cash and cash equivalents at end of period	2,789	2,789	3,173
Consolidation Eliminations [Member]
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		10	(2)
Financing Activities:
Net decrease in cash and cash equivalents		10	(2)
Cash and cash equivalents at beginning of period		(47)	(43)
Cash and cash equivalents at end of period	(37)	(37)	(45)
Parent Company [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(3,537)	(1,497)
Investing Activities:
Proceeds from asset dispositions and other		(5)	85
Cash used in investing activities		(5)	85
Financing Activities:
Proceeds from short-term borrowings, net		797
Net transfers from (to) Parent		807	117
Payment on loan between subsidiaries		210	36
Proceeds from debt issuances		1,481	1,190
Proceeds from stock issuances		284	265
Dividends paid		(402)	(319)
Purchase of treasury stock		(558)	(358)
Other, net		2	(8)
Cash provided by financing activities		2,621	923
Effect of exchange rate changes on cash		(6)	(10)
Net decrease in cash and cash equivalents		(927)	(499)
Cash and cash equivalents at beginning of period		1,884	1,974
Cash and cash equivalents at end of period	957	957	1,475
Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		4,664	3,615
Investing Activities:
Capital expenditures		(3,746)	(3,456)
Business acquisitions, net of cash acquired		(44)
Proceeds from asset dispositions and other		23	16
Cash used in investing activities		(3,767)	(3,440)
Financing Activities:
Net transfers from (to) Parent		(895)	(148)
Payment on loan between subsidiaries			(15)
Intercompany dividends			1
Principal payments on debt		(17)	(33)
Other, net		4	(12)
Cash provided by financing activities		(908)	(207)
Effect of exchange rate changes on cash		61	7
Net decrease in cash and cash equivalents		50	(25)
Cash and cash equivalents at beginning of period		325	326
Cash and cash equivalents at end of period	375	375	301
Non Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member]
Condensed Financial Statements Captions [Line Items]
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		25	529
Investing Activities:
Capital expenditures		(248)	(334)
Proceeds from asset dispositions and other		3	22
Cash used in investing activities		(245)	(312)
Financing Activities:
Net transfers from (to) Parent		88	31
Payment on loan between subsidiaries		(210)	(21)
Intercompany dividends			(1)
Principal payments on debt		(14)	(16)
Other, net			22
Cash provided by financing activities		(136)	15
Effect of exchange rate changes on cash		43	(67)
Net decrease in cash and cash equivalents		(313)	165
Cash and cash equivalents at beginning of period		1,807	1,277
Cash and cash equivalents at end of period	$ 1,494	$ 1,494	$ 1,442