8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 19, 2012

FEDEX CORPORATION

(Exact name of registrant as specified in its charter)

Commission File Number 1-15829

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

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

FEDERAL EXPRESS CORPORATION

(Exact name of registrant as specified in its charter)

Commission File Number 1-7806

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

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

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

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

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

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

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

EXPLANATORY NOTE

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

SECTION 2. FINANCIAL INFORMATION.

Item 2.02. Results of Operations and Financial Condition.

Attached as Exhibit 99.1 and incorporated herein by reference is a copy of FedEx Corporation’s press release, dated June 19, 2012, announcing its and its wholly owned subsidiary Federal Express Corporation’s financial results for the fiscal quarter and year ended May 31, 2012.

SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.

Item 9.01. Financial Statements and Exhibits.

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

Exhibit       Number	Description
99.1	Press Release of FedEx Corporation dated June 19, 2012.

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SIGNATURES

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

	FedEx Corporation
Date: June 19, 2012	By:	/s/ HERBERT C. NAPPIER
		Herbert C. Nappier
		Staff Vice President and Corporate Controller
	Federal Express Corporation
Date: June 19, 2012	By:	/s/ J. RICK BATEMAN
		J. Rick Bateman
		Vice President and Worldwide Controller

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EXHIBIT INDEX

Exhibit       Number	Description
99.1	Press Release of FedEx Corporation dated June 19, 2012.

E-1

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

FedEx Corp. Reports Fourth Quarter Earnings

Diluted Earnings Per Share Up 14% Excluding Charge

MEMPHIS, Tenn., June 19, 2012 ... FedEx Corp. (NYSE: FDX) today reported earnings of $1.73 per diluted share for the fourth quarter ended May 31, which includes a previously announced $0.26 per diluted share non-cash aircraft impairment charge at FedEx Express. Excluding this charge, earnings were $1.99 per diluted share in the fourth quarter compared to $1.75 per diluted share a year ago.

“FedEx delivered strong earnings results for fiscal 2012 due to the outstanding performance by FedEx Ground, our new value proposition at FedEx Freight and improved yields across all transportation segments,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “In fiscal 2013, we will continue our focus on improving our operating efficiencies and our financial performance across all of our businesses, while simultaneously enhancing our service capabilities. We remain absolutely committed to higher earnings, margins, cash flows and returns.”

Fourth Quarter Results

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

	Fiscal 2012							Fiscal 2011
	As Reported (GAAP)	YOY %			Before Aircraft Impairment Charge	YOY %		As Reported (GAAP)
Revenue	$11.0 billion		4		$11.0 billion		4	$10.6 billion
Operating Income	$856 million		(4	)	$990 million		11	$888 million
Operating Margin	7.8%				9.0%			8.4%
Net Income	$550 million		(1	)	$634 million		14	$558 million
Diluted EPS	$1.73		(1	)	$1.99		14	$1.75

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As announced on June 4, 2012, during the quarter FedEx Express permanently retired from service 18 Airbus A310-200 aircraft and 26 related engines, as well as six Boeing MD10-10 aircraft and 17 related engines. As a consequence, a non-cash impairment charge of $134 million ($84 million, net of tax, or $0.26 per diluted share) was recorded in the fourth quarter. The decision to permanently retire these aircraft will better align the U.S. domestic air network capacity of FedEx Express to match current and anticipated shipment volumes.

Excluding the aircraft impairment charge, operating results improved due to higher yields, volumes and margins at FedEx Ground and FedEx Freight.

Full Year Results

FedEx Corp. reported the following consolidated results for the full year:

	Fiscal 2012		Fiscal 2011
	As Reported (GAAP)	Before Aircraft Impairment Charge and Legal Reserve Reversal	As Reported (GAAP)	Before Freight Costs and Legal Reserve
Revenue	$42.7 billion	$42.7 billion	$39.3 billion	$39.3 billion
Operating Income	$3.19 billion	$3.28 billion	$2.38 billion	$2.54 billion
Operating Margin	7.5%	7.7%	6.1%	6.5%
Net Income	$2.03 billion	$2.09 billion	$1.45 billion	$1.56 billion
Diluted EPS	$6.41	$6.59	$4.57	$4.90

Capital spending for fiscal 2012 was $4.0 billion, of which $1.9 billion was for investments in aircraft and related equipment.

Outlook

“We are focused on improving margins in all businesses, although we face certain cost increases in fiscal 2013,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “These headwinds include higher employee-related costs, including higher pension expenses of approximately $150 million due to a historically low discount rate on our May 31, 2012 measurement date, as well as higher depreciation costs. We expect to mitigate these challenges by reducing costs and improving efficiencies, and

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are continuing to evaluate additional actions to substantially improve FedEx Express margins.”

FedEx projects earnings to be $1.45 to $1.60 per diluted share in the first quarter and $6.90 to $7.40 per diluted share for fiscal 2013. This earnings guidance does not include the impacts of the significant cost reduction programs currently under review that should be announced in the fall. The company’s outlook assumes U.S. GDP growth of 2.2% and world GDP growth of 2.6% during the fiscal year. FedEx reported earnings of $1.46 per diluted share in last year’s first quarter. Capital spending for fiscal 2013 is expected to decline to $3.9 billion, with fewer aircraft deliveries at FedEx Express and increased investment in the high-margin, high-return FedEx Ground business.

FedEx Express Segment

For the fourth quarter, the FedEx Express segment reported:

	Fiscal 2012								Fiscal 2011
	As Reported (GAAP)	YOY %			Before Aircraft Impairment Charge	YOY %			As Reported (GAAP)
Revenue	$6.80 billion		3		$6.80 billion		3		$6.63 billion
Operating Income	$281 million		(34	)	$415 million		(3	)	$429 million
Operating Margin	4.1%				6.1%				6.5%

U.S. domestic revenue per package grew 6% due to higher rate per pound, the growth of the premium FedEx First Overnight service and fuel surcharges, while average daily package volume declined 5%. FedEx international priority (IP) revenue per package grew 3% due to higher package weights and fuel surcharges, while average daily package volume decreased 3% driven by year-over-year declines from Asia. IP freight pounds increased 3%, while revenue per pound decreased 4% due to lower rate per pound. In total, IP package and freight pounds increased 2% and revenue decreased 1% year-over-year. IP revenue growth was affected by a lower-yielding mix of services, consisting of growth in deferred services and declines in premium services.

Operating income and margin were impacted by the aircraft impairment charge as well as declining package volumes. The demand shift toward lower-yielding international services also negatively affected margins, partially offset by the year-over-year benefit of the fuel surcharge timing lag.

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FedEx Ground Segment

For the fourth quarter, the FedEx Ground segment reported:

• Revenue of $2.48 billion, up 9% from last year’s $2.26 billion

• Operating income of $494 million, up 18% from $417 million a year ago

• Operating margin of 20.0%, up from 18.4% the previous year

Operating income and margin reached record highs in the quarter primarily due to increased yield and volume. Revenue per package increased 5% primarily due to increased rates and higher extra services. Average daily package volume grew 3% in the quarter, driven by growth in both FedEx Home Delivery and business-to-business services. FedEx SmartPost average daily volume increased 16% primarily due to growth in e-commerce. FedEx SmartPost revenue per package increased 7% due to increased rates.

FedEx Freight Segment

For the fourth quarter, the FedEx Freight segment reported:

• Revenue of $1.40 billion, up 7% from last year’s $1.31 billion

• Operating income of $81 million, up 93% from $42 million a year ago

• Operating margin of 5.8%, up from 3.2% the previous year

Operating income and margin increased primarily due to higher yield, volume growth and continued improvements in operational efficiencies. Less-than-truckload (LTL) average daily shipments increased 4% due to an increase in customer demand for the company’s service offerings, enhanced service levels and modest economic improvement. LTL yield increased 4% due to higher fuel surcharges and base yield improvement. Effective July 9, 2012, FedEx Freight will increase U.S. and certain other shipping rates by 6.9%.

As part of its ongoing commitment to continuous improvement, FedEx Freight will be making some adjustments to its network on July 9, 2012 to drive incremental operational efficiencies and further enhance the customer experience.

Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $43 billion, the company offers integrated business

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applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 300,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit news.fedex.com.

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs and fourth quarter fiscal 2012 Statistical Book. These materials, as well as a webcast of the earnings release conference call to be held at 8:30 a.m. EDT on June 19 are available on the company’s website at investors.fedex.com. A replay of the conference call webcast will be posted on our Web site following the call.

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

Media Contact: Jess Bunn 901-818-7463

Investor Contact: Mickey Foster 901-818-7468

Home Page: fedex.com

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO GAAP FINANCIAL MEASURES

The company believes that meaningful analysis of our financial performance requires an understanding of the factors underlying that performance and our judgments about the likelihood that particular factors will repeat. Excluding the reversal of a reserve associated with a legal matter and a non-cash aircraft impairment charge at FedEx Express from current results and the costs of the combination of FedEx Freight and FedEx National LTL operations and the initial recording of the legal reserve from our prior period earnings will allow for more accurate comparisons of our operating performance. Where applicable, the impacts of these events are shown net of incentive compensation impacts. As required by SEC rules, the tables below present a reconciliation of our presented non-GAAP measures to the most directly comparable GAAP measures.

Fourth Quarter Fiscal 2012

	FedEx Corporation												FedEx Express Segment
Dollars in millions, except EPS	Operating						Net Income			Diluted Earnings Per Share			Operating
	Income			Margin									Income			Margin
Non-GAAP Measure	$	990			9.0	%	$	634		$	1.99		$	415			6.1	%
Aircraft Impairment		(134	)		(1.2	%)		(84	)		(0.26	)		(134	)		(2.0	%)
GAAP Measure	$	856			7.8	%	$	550		$	1.73		$	281			4.1	%

Full Year Fiscal 2012

	FedEx Corporation
Dollars in millions, except EPS	Operating						Net Income			Diluted Earnings Per  Share
	Income			Margin
Non-GAAP Measure	$	3,277			7.7	%	$	2,089		$	6.59
Aircraft Impairment		(134	)		(0.3	%)		(84	)		(0.26	)
ATA Legal Reserve, Net		43			0.1	%		27			0.08
GAAP Measure	$	3,186			7.5	%	$	2,032		$	6.41

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Full Year Fiscal 2011

	FedEx Corporation
Dollars in millions, except EPS	Operating						Net Income			Diluted Earnings Per  Share
	Income			Margin
Non-GAAP Measure	$	2,544			6.5	%	$	1,556		$	4.90
FedEx Freight Combination Costs		(133	)		(0.3	%)		(84	)		(0.26	)
ATA Legal Reserve, Net		(33	)		(0.1	%)		(20	)		(0.07	)
GAAP Measure	$	2,378			6.1	%	$	1,452		$	4.57

* * *

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FEDEX CORP. FINANCIAL HIGHLIGHTS

Fourth Quarter Fiscal 2012

(In millions, except earnings per share)

(Unaudited)

	Three Months Ended May 31									Twelve Months Ended May 31
	2012			2011			%			2012			2011			%
Revenue:
FedEx Express segment	$	6,797		$	6,628			3	%	$	26,515		$	24,581			8	%
FedEx Ground segment		2,476			2,263			9	%		9,573			8,485			13	%
FedEx Freight segment		1,395			1,309			7	%		5,282			4,911			8	%
FedEx Services segment		432			438			(1	%)		1,671			1,684			(1	%)
Other & eliminations		(92	)		(86	)		(7	%)		(361	)		(357	)		(1	%)
Total Revenue		11,008			10,552			4	%		42,680			39,304			9	%
Operating Expenses:
Salaries and employee benefits		4,092			3,866			6	%		16,099			15,276			5	%
Purchased transportation		1,622			1,511			7	%		6,335			5,674			12	%
Rentals and landing fees		616			612			1	%		2,487			2,462			1	%
Depreciation and amortization		543			499			9	%		2,113			1,973			7	%
Fuel		1,279			1,277			—			4,956			4,151			19	%
Maintenance and repairs		462			509			(9	%)		1,980			1,979			—
Impairment and other charges		134			1			NM			134			89			51	%
Other		1,404			1,389			1	%		5,390			5,322			1	%
Total Operating Expenses		10,152			9,664			5	%		39,494			36,926			7	%
Operating Income (Loss):
FedEx Express segment		281			429			(34	%)		1,260			1,228			3	%
FedEx Ground segment		494			417			18	%		1,764			1,325			33	%
FedEx Freight segment		81			42			93	%		162			(175	)		NM
Total Operating Income		856			888			(4	%)		3,186			2,378			34	%
Other Income (Expense):
Interest, net		(9	)		(12	)		(25	%)		(39	)		(77	)		(49	%)
Other, net		1			(11	)		NM			(6	)		(36	)		(83	%)
Total Other Income (Expense)		(8	)		(23	)		(65	%)		(45	)		(113	)		(60	%)
Pretax Income		848			865			(2	%)		3,141			2,265			39	%
Provision for Income Taxes		298			307			(3	%)		1,109			813			36	%
Net Income	$	550		$	558			(1	%)	$	2,032		$	1,452			40	%
Diluted Earnings Per Share	$	1.73		$	1.75			(1	%)	$	6.41		$	4.57			40	%
Weighted Average Diluted Common and Common Equivalent Shares		317			318			—			317			317			—
Capital Expenditures	$	1,062		$	731			45	%	$	4,007		$	3,434			17	%

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FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

Fourth Quarter Fiscal 2012

(In millions)

(Current period is unaudited)

	May 31, 2012			May 31, 2011
ASSETS
Current Assets
Cash and cash equivalents	$	2,843		$	2,328
Receivables, less allowances		4,704			4,581
Spare parts, supplies and fuel, less allowances		440			437
Deferred income taxes		533			610
Prepaid expenses and other		536			329
Total current assets		9,056			8,285
Property and Equipment, at Cost		36,164			33,686
Less accumulated depreciation and amortization		18,916			18,143
Net property and equipment		17,248			15,543
Other Long-Term Assets
Goodwill		2,387			2,326
Other assets		1,212			1,231
Total other long-term assets		3,599			3,557
	$	29,903		$	27,385
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current Liabilities
Current portion of long-term debt	$	417		$	18
Accrued salaries and employee benefits		1,635			1,268
Accounts payable		1,613			1,702
Accrued expenses		1,709			1,894
Total current liabilities		5,374			4,882
Long-Term Debt, Less Current Portion		1,250			1,667
Other Long-Term Liabilities
Deferred income taxes		836			1,336
Pension, postretirement healthcare and other benefit obligations		5,582			2,124
Self-insurance accruals		963			977
Deferred lease obligations		784			779
Deferred gains, principally related to aircraft transactions		251			246
Other liabilities		136			154
Total other long-term liabilities		8,552			5,616
Commitments and Contingencies
Common Stockholders’ Investment
Common stock, $0.10 par value, 800 million shares authorized		32			32
Additional paid-in capital		2,595			2,484
Retained earnings		17,134			15,266
Accumulated other comprehensive loss		(4,953	)		(2,550	)
Treasury stock, at cost		(81	)		(12	)
Total common stockholders’ investment		14,727			15,220
	$	29,903		$	27,385

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FEDEX CORP. CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Fourth Quarter Fiscal 2012

(In millions)

(Current period is unaudited)

	Year Ended May 31
	2012			2011
Operating Activities:
Net income	$	2,032		$	1,452
Noncash charges:
Depreciation and amortization		2,113			1,973
Other, net		1,525			948
Changes in operating assets and liabilities, net		(835	)		(332	)
Cash provided by operating activities		4,835			4,041
Investing Activities:
Capital expenditures		(4,007	)		(3,434	)
Business acquisitions, net of cash acquired		(116	)		(96	)
Proceeds from asset dispositions and other		74			111
Cash used in investing activities		(4,049	)		(3,419	)
Financing Activities:
Principal payments on debt		(29	)		(262	)
Dividends paid		(164	)		(151	)
Purchase of treasury stock		(197	)		—
Other, net		146			126
Cash used in financing activities		(244	)		(287	)
Effect of exchange rate changes on cash		(27	)		41
Net increase in cash and cash equivalents		515			376
Cash and cash equivalents at beginning of period		2,328			1,952
Cash and cash equivalents at end of period	$	2,843		$	2,328

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FEDEX EXPRESS SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Fourth Quarter Fiscal 2012

(Dollars in millions)

(Unaudited)

	Three Months Ended May 31									Twelve Months Ended May 31
	2012			2011			%			2012			2011			%
FINANCIAL HIGHLIGHTS
Revenue	$	6,797		$	6,628			3	%	$	26,515		$	24,581			8	%
Operating Expenses:
Salaries and employee benefits		2,457			2,351			5	%		9,657			9,183			5	%
Purchased transportation		482			430			12	%		1,828			1,573			16	%
Rentals and landing fees		411			418			(2	%)		1,680			1,672			—
Depreciation and amortization		300			272			10	%		1,169			1,059			10	%
Fuel		1,110			1,099			1	%		4,304			3,553			21	%
Maintenance and repairs		295			351			(16	%)		1,332			1,353			(2	%)
Intercompany charges		550			520			6	%		2,193			2,043			7	%
Impairment and other charges1		134			—			NM			134			—			NM
Other2		777			758			3	%		2,958			2,917			1	%
Total Operating Expenses		6,516			6,199			5	%		25,255			23,353			8	%
Operating Income	$	281		$	429			(34	%)	$	1,260		$	1,228			3	%
Operating Margin		4.1	%		6.5	%		(2.4	pts)		4.8	%		5.0	%		(0.2	pts)
OPERATING STATISTICS3
Operating Weekdays		65			65			—			256			255			—
AVG DAILY VOLUME / POUNDS
Average Daily Package Volume (000s):
U.S. Overnight Box		1,113			1,158			(4	%)		1,146			1,184			(3	%)
U.S. Overnight Envelope		584			626			(7	%)		586			627			(7	%)
U.S. Deferred		793			833			(5	%)		845			873			(3	%)
Total U.S. Domestic Package		2,490			2,617			(5	%)		2,577			2,684			(4	%)
International Priority4		573			593			(3	%)		559			575			(3	%)
International Domestic5		498			373			34	%		495			348			42	%
Total Average Daily Packages		3,561			3,583			(1	%)		3,631			3,607			1	%
Average Daily Freight Pounds (000s):
U.S.		7,270			7,027			3	%		7,487			7,340			2	%
International Priority4		3,373			3,261			3	%		3,303			3,184			4	%
International Airfreight		1,138			1,195			(5	%)		1,171			1,235			(5	%)
Total Avg Daily Freight Pounds		11,781			11,483			3	%		11,961			11,759			2	%
YIELD
Revenue Per Package:
U.S. Overnight Box	$	23.01		$	21.72			6	%	$	22.31		$	20.29			10	%
U.S. Overnight Envelope		11.81			11.37			4	%		11.65			10.86			7	%
U.S. Deferred		14.49			13.56			7	%		13.87			12.60			10	%
Total U.S. Domestic Package		17.67			16.65			6	%		17.12			15.59			10	%
International Priority4		60.71			58.96			3	%		60.83			56.08			8	%
International Domestic5		6.78			7.51			(10	%)		6.74			7.38			(9	%)
Composite Package Yield	$	23.07		$	22.69			2	%	$	22.44		$	21.25			6	%
Revenue Per Freight Pound:
U.S.	$	1.34		$	1.25			7	%	$	1.30		$	1.17			11	%
International Priority4		2.12			2.21			(4	%)		2.16			2.12			2	%
International Airfreight		1.07			0.96			11	%		1.02			0.90			13	%
Composite Freight Yield	$	1.54		$	1.49			3	%	$	1.51		$	1.40			8	%

1 — Represents charges resulting from the decision to retire 24 aircraft and related engines.

2 — Current year includes the reversal of a $66 million reserve for a legal matter which was initially recorded in fiscal 2011.

3 — Operating statistics include only the operations of FedEx Express.

4 — International Priority includes FedEx International Priority^® and FedEx International Economy^® services.

5 — International Domestic includes the operations of acquisitions in India (February 2011) and Mexico (July 2011).

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FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Fourth Quarter Fiscal 2012

(Dollars in millions)

(Unaudited)

	Three Months Ended May 31									Twelve Months Ended May 31
	2012			2011			%			2012			2011			%
FINANCIAL HIGHLIGHTS
Revenues:
FedEx Ground	$	2,273		$	2,099			8	%	$	8,791		$	7,855			12	%
FedEx SmartPost		203			164			24	%		782			630			24	%
Total Revenues		2,476			2,263			9	%		9,573			8,485			13	%
Operating Expenses:
Salaries and employee benefits		369			328			13	%		1,451			1,282			13	%
Purchased transportation		948			893			6	%		3,762			3,431			10	%
Rentals		72			66			9	%		284			263			8	%
Depreciation and amortization		100			88			14	%		389			337			15	%
Fuel		3			3			—			14			12			17	%
Maintenance and repairs		46			43			7	%		176			169			4	%
Intercompany charges		246			228			8	%		978			897			9	%
Other		198			197			1	%		755			769			(2	%)
Total Operating Expenses		1,982			1,846			7	%		7,809			7,160			9	%
Operating Income	$	494		$	417			18	%	$	1,764		$	1,325			33	%
Operating Margin		20.0	%		18.4	%		1.6	pts		18.4	%		15.6	%		2.8	pts
OPERATING STATISTICS
Operating Weekdays		65			65			—			256			256			—
Average Daily Package Volume (000s)
FedEx Ground		3,861			3,732			3	%		3,907			3,746			4	%
FedEx SmartPost		1,664			1,430			16	%		1,692			1,432			18	%
Yield (Revenue Per Package)
FedEx Ground	$	9.03		$	8.64			5	%	$	8.77		$	8.17			7	%
FedEx SmartPost	$	1.88		$	1.76			7	%	$	1.81		$	1.72			5	%

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FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Fourth Quarter Fiscal 2012

(Dollars in millions)

(Unaudited)

	Three Months Ended May 31									Twelve Months Ended May 31
	2012			2011			%			2012			2011			%
FINANCIAL HIGHLIGHTS
Revenue	$	1,395		$	1,309			7	%	$	5,282		$	4,911			8	%
Operating Expenses:
Salaries and employee benefits		595			557			7	%		2,316			2,303			1	%
Purchased transportation		222			212			5	%		851			779			9	%
Rentals		28			28			—			114			122			(7	%)
Depreciation and amortization		50			47			6	%		185			205			(10	%)
Fuel		166			176			(6	%)		636			585			9	%
Maintenance and repairs		49			47			4	%		192			182			5	%
Intercompany charges		109			104			5	%		433			427			1	%
Impairment and other charges1		—			1			NM			—			89			NM
Other		95			95			—			393			394			—
Total Operating Expenses		1,314			1,267			4	%		5,120			5,086			1	%
Operating Income (Loss)	$	81		$	42			93	%	$	162		$	(175	)		NM
Operating Margin		5.8	%		3.2	%		2.6	pts		3.1	%		(3.6	%)		6.7	pts
OPERATING STATISTICS
LTL Operating Weekdays		65			65			—			255			254			—
LTL Shipments Per Day (000s)		87.8			84.3			4	%		84.9			86.0			(1	%)
Weight Per LTL Shipment (lbs)		1,163			1,177			(1	%)		1,156			1,144			1	%
LTL Revenue/CWT	$	19.50		$	18.83			4	%	$	19.57		$	18.24			7	%

1 — Previous year includes charges associated with the combination of FedEx Freight and FedEx National LTL operations.

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