8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 20, 2008

FEDEX CORPORATION
(Exact name of registrant as specified in its charter)

Delaware	1-15829	62-1721435
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(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

(Former name or former address if changed since last report.)

FEDERAL EXPRESS CORPORATION
(Exact name of registrant as specified in its charter)

Delaware	1-7806	71-0427007
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(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

(Former name or former address if changed since last report.)

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

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

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

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

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

EXPLANATORY NOTE

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

SECTION 2. FINANCIAL INFORMATION.

Item 2.02. Results of Operations and Financial Condition.

Attached as Exhibit 99.1 and incorporated herein by reference is a copy of FedEx Corporation’s press release, dated March 20, 2008, announcing its and its wholly owned subsidiary Federal Express Corporation’s financial results for the fiscal quarter ended February 29, 2008.

SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.

Item 9.01. Financial Statements and Exhibits.

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

Exhibit
Number	Description
99.1	Press Release of FedEx Corporation dated March 20, 2008.

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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: March 20, 2008

By: /s/ MARSHALL W. WITT                        
Marshall W. Witt
Staff Vice President and
Corporate Controller

Federal Express Corporation

Date: March 20, 2008

By: /s/ J. RICK BATEMAN                            
J. Rick Bateman
Vice President and
Worldwide Controller

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EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release of FedEx Corporation dated March 20, 2008.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

FedEx Corp. Reports Third Quarter Earnings

MEMPHIS, Tenn., March 20, 2008 ... FedEx Corp. (NYSE: FDX) today reported earnings of $1.26 per diluted share for the third quarter ended February 29, compared to $1.35 per diluted share a year ago. Last year’s third quarter included an $0.08 per diluted share benefit from a reduction in the company’s effective tax rate.

“FedEx faces a challenging economic environment that includes persistently high oil prices, sluggish U.S. growth and continued concerns in the credit markets,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “We are managing our costs while positioning our portfolio of global transportation solutions to increase our profitability and returns once conditions improve.”

Third Quarter Results

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

• Revenue of $9.44 billion, up 10% from $8.59 billion the previous year

• Operating income of $641 million, unchanged from a year ago

• Operating margin of 6.8%, down from 7.5% the previous year

• Net income of $393 million, down 6% from last year’s $420 million

Total combined average daily package volume in the FedEx Express and FedEx Ground segments grew 5% year over year for the quarter, due primarily to growth at FedEx Ground, FedEx International Priority^® (IP) and an increase in international domestic express shipments resulting primarily from recent international acquisitions.

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Third quarter operating margins declined, as higher fuel prices and a weak U.S. economy limited demand for U.S. domestic express, less-than-truckload (LTL) and copy and print services. The costs of retail service enhancement initiatives, increased marketing and technology expenses and higher expenses at FedEx Ground more than offset the benefits from lower variable compensation and favorable exchange rates.

Outlook

FedEx expects earnings to be $1.60 to $1.80 per diluted share in the fourth quarter compared to $1.96 a year ago. Last year’s fourth quarter results included a $0.06 per diluted share net benefit from a settlement with Airbus related to the A380 order cancellation. This outlook assumes no additional increases to current fuel prices and no further weakening in the economy. The capital spending forecast for the year has been reduced to approximately $3.0 billion.

“Our fourth quarter earnings outlook has been impacted by higher than anticipated fuel prices and a weak U.S. economy,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Looking ahead to our fiscal 2009, we are expecting a continuation of fourth quarter trends, which would result in limited earnings growth next year. We are scrutinizing all expenses and investments to realign them with the current environment.”

FedEx Express Segment

For the third quarter, the FedEx Express segment reported:

• Revenue of $6.13 billion, up 11% from last year’s $5.52 billion

• Operating income of $425 million, up 8% from $395 million a year ago

• Operating margin of 6.9%, down from 7.2% the previous year

IP package revenue grew 18% for the quarter, as IP revenue per package grew 10%, primarily due to higher fuel surcharges and favorable exchange rates. IP average daily package volume grew 6%, led by increases in volume originating in Latin America, the United States and Asia. U.S. domestic revenue per package increased 6% due to increased fuel surcharges and higher rate per pound, while package volume declined by 2%.

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Operating income and margin were negatively impacted by continued softness in the U.S. economy, increased intercompany charges from the FedEx Services segment and the ongoing cost of investments in the company’s China domestic express service, more than offsetting the benefits from the timing lag of the fuel surcharge, one additional operating day and exchange rates.

FedEx Ground Segment

For the third quarter, the FedEx Ground segment reported:

• Revenue of $1.72 billion, up 13% from last year’s $1.52 billion

• Operating income of $170 million, down 13% from $196 million a year ago

• Operating margin of 9.9%, down from 12.9% the previous year

FedEx Ground average daily package volume grew 7% year over year in the third quarter due to increased commercial business and the continued strong growth of its FedEx Home Delivery service. Yield improved 3% primarily due to fuel surcharges, extra service revenues and the impact of general rate increases.

Operating income and margin were lower due to increased intercompany charges from the FedEx Services segment and costs to enhance and defend the independent contractor model, partially offset by the benefit from one additional operating day.

FedEx Freight Segment

For the third quarter, the FedEx Freight segment reported:

• Revenue of $1.16 billion, up 5% from last year’s $1.10 billion

• Operating income of $46 million, down 8% from $50 million a year ago

• Operating margin of 4.0%, down from 4.5% the previous year

LTL shipments declined 3% year over year, as demand for these services continues to be restrained by the weak U.S. economy, although average daily LTL shipments improved sequentially throughout the quarter. LTL yield improved 5% year over year as higher rates, including the impact of the January rate increase, more than offset the July 2007 fuel surcharge reduction.

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Operating income and margin decreased in the quarter due to the net impact of higher fuel costs and the fuel surcharge reduction, higher utilization of purchased transportation and fewer long-haul LTL shipments.

FedEx Services Segment

Revenue for the FedEx Services segment, which includes the operations of FedEx Kinko’s and FedEx Global Supply Chain Services, was up 1% year over year. Revenue generated from new locations and higher package acceptance fees offset lower copy product revenues at FedEx Kinko’s. FedEx Services expenses, which are reallocated to the transportation segments net of revenues, increased year over year due to higher marketing and information technology costs and increased net operating costs at FedEx Kinko’s associated with expansion and service improvement activities.

FedEx Kinko’s has opened 252 centers fiscal year-to-date as part of its plan to open 300 new centers this year. Given the weak economic outlook, FedEx Kinko’s will significantly slow its rate of expansion in fiscal 2009, to about 70 new locations.

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 $37 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 290,000 employees and contractors 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 third quarter fiscal 2008 Statistical Book. These materials, as well as a Webcast of the earnings release conference call to be held at 8:30 a.m. EDT on March 20 are available on the company’s Web site at www.fedex.com/us/investorrelations. A replay of the conference call Webcast will be posted on our Web site following the call.

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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, the impact of changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and filings with the SEC.

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

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FEDEX CORP. FINANCIAL HIGHLIGHTS

Third Quarter Fiscal 2008
(In millions, except earnings per share and FTEs)
(Unaudited)

	Three Months Ended									Nine Months Ended
	Feb. 29, 2008			Feb. 28, 20072			%			Feb. 29, 2008			Feb. 28, 20072			%
Revenue:
FedEx Express segment	$	6,129		$	5,523			11	%	$	18,055		$	16,856			7	%
FedEx Ground segment		1,720			1,523			13	%		5,036			4,460			13	%
FedEx Freight segment		1,155			1,101			5	%		3,624			3,339			9	%
FedEx Services segment		511			508			1	%		1,586			1,578			1	%
Other & eliminations		(78	)		(63	)	NM				(214	)		(170	)	NM
Total Revenue		9,437			8,592			10	%		28,087			26,063			8	%
Operating Expenses:
Salaries and employee benefits		3,593			3,414			5	%		10,586			10,225			4	%
Purchased transportation		1,128			1,009			12	%		3,289			2,901			13	%
Rentals and landing fees		615			598			3	%		1,819			1,752			4	%
Depreciation and amortization		492			449			10	%		1,447			1,278			13	%
Fuel		1,180			829			42	%		3,204			2,630			22	%
Maintenance and repairs		479			484			(1	%)		1,542			1,491			3	%
Other		1,309			1,168			12	%		3,962			3,522			12	%
Total Operating Expenses		8,796			7,951			11	%		25,849			23,799			9	%
Operating Income:
FedEx Express segment		425			395			8	%		1,475			1,378			7	%
FedEx Ground segment		170			196			(13	%)		533			548			(3	%)
FedEx Freight segment		46			50			(8	%)		230			338			(32	%)
Total Operating Income		641			641			—			2,238			2,264			(1	%)
Other Income (Expense):
Interest, net		(10	)		(11	)		(9	%)		(50	)		(37	)		35	%
Other, net		(3	)		(1	)	NM				(5	)		(5	)		—
Total Other Income (Expense)		(13	)		(12	)		8	%		(55	)		(42	)		31	%
Pretax Income		628			629			(0	%)		2,183			2,222			(2	%)
Provision for Income Taxes		235			209			12	%		817			816			0	%
Net Income	$	393		$	420			(6	%)	$	1,366		$	1,406			(3	%)
Diluted Earnings Per Share	$	1.26		$	1.35			(7	%)	$	4.37		$	4.52			(3	%)
Weighted Average Common and Common Equivalent Shares		312			311			—			312			311			—
Capital Expenditures	$	643		$	653			(2	%)	$	2,156		$	2,112			2	%
Average Full-Time Equivalents (000s)1		257			245			5	%		254			240			6	%

1 — The current year includes the DTW Group, ANC Holdings and Prakash Air acquisitions.

2 — Prior year amounts have been revised to conform to the current year segment presentation.

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FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

Third Quarter Fiscal 2008
(In millions)

	Feb. 29, 2008
	(Unaudited)		May 31, 2007
ASSETS
Current Assets:
Cash and cash equivalents	$	1,011	$	1,569
Other current assets		5,420		5,060
Total Current Assets		6,431		6,629
Net Property and Equipment		13,314		12,636
Other Long-Term Assets		4,851		4,735
	$	24,596	$	24,000
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current Liabilities:
Current portion of long-term debt	$	18	$	639
Other current liabilities		4,594		4,789
Total Current Liabilities		4,612		5,428
Long-Term Debt, Less Current Portion		2,006		2,007
Other Long-Term Liabilities		3,786		3,909
Total Common Stockholders’ Investment		14,192		12,656
	$	24,596	$	24,000

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FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS

Third Quarter Fiscal 2008
(In millions)
(Unaudited)

	Nine Months Ended
	Feb. 29, 2008			Feb. 28, 2007
Operating Activities:
Net income	$	1,366		$	1,406
Noncash charges:
Depreciation and amortization		1,447			1,278
Other, net		326			136
Changes in operating assets and liabilities, net		(948	)		(716	)
Net cash provided by operating activities		2,191			2,104
Investing Activities:
Capital expenditures		(2,156	)		(2,112	)
Business acquisition		—			(991	)
Proceeds from asset dispositions and other		29			35
Net cash used in investing activities		(2,127	)		(3,068	)
Financing Activities:
Proceeds from debt issuances		—			1,054
Principal payments on debt		(623	)		(283	)
Dividends paid		(93	)		(83	)
Other, net		94			109
Net cash (used in) provided by financing activities		(622	)		797
Net decrease in cash and cash equivalents		(558	)		(167	)
Cash and cash equivalents at beginning of period		1,569			1,937
Cash and cash equivalents at end of period	$	1,011		$	1,770

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FEDEX EXPRESS SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Third Quarter Fiscal 2008
(Dollars in millions)
(Unaudited)

	Three Months Ended									Nine Months Ended
FINANCIAL HIGHLIGHTS	Feb. 29, 2008			Feb. 28, 20072			%			Feb. 29, 2008			Feb. 28, 20072			%
Revenue	$	6,129		$	5,523			11	%	$	18,055		$	16,856			7	%
Operating Expenses:
Salaries and employee benefits		2,154			2,043			5	%		6,273			6,161			2	%
Purchased transportation		302			300			1	%		881			832			6	%
Rentals and landing fees		421			411			2	%		1,249			1,201			4	%
Depreciation and amortization		240			216			11	%		704			629			12	%
Fuel		980			691			42	%		2,652			2,205			20	%
Maintenance and repairs		346			357			(3	%)		1,124			1,120			0	%
Intercompany charges		555			499			11	%		1,606			1,521			6	%
Other		706			611			16	%		2,091			1,809			16	%
Total Operating Expenses		5,704			5,128			11	%		16,580			15,478			7	%
Operating Income	$	425		$	395			8	%	$	1,475		$	1,378			7	%
Operating Margin		6.9	%		7.2	%	(0.3 pts)				8.2	%		8.2	%	0.0 pts
OPERATING STATISTICS
Operating Weekdays		63			62			2	%		191			190			1	%
AVG DAILY VOLUME / POUNDS
Average Daily Package Volume (000s):
U.S. Overnight Box		1,165			1,191			(2	%)		1,155			1,180			(2	%)
U.S. Overnight Envelope		659			699			(6	%)		679			701			(3	%)
U.S. Deferred		966			965			0	%		910			904			1	%
Total U.S. Domestic Package		2,790			2,855			(2	%)		2,744			2,785			(1	%)
International Priority		518			490			6	%		517			486			6	%
International Domestic1		295			162			82	%		294			83		NM
Total Average Daily Packages		3,603			3,507			3	%		3,555			3,354			6	%
Average Daily Freight Pounds (000s):
U.S.		8,967			9,785			(8	%)		8,908			9,688			(8	%)
International Priority		2,234			1,845			21	%		2,178			1,866			17	%
International Airfreight		1,739			1,715			1	%		1,772			1,855			(4	%)
Total Avg Daily Freight Pounds		12,940			13,345			(3	%)		12,858			13,409			(4	%)
YIELD
Revenue Per Package:
U.S. Overnight Box	$	22.51		$	21.29			6	%	$	22.13		$	21.68			2	%
U.S. Overnight Envelope		11.93			11.01			8	%		11.48			11.09			4	%
U.S. Deferred		13.14			12.37			6	%		12.89			12.58			2	%
Total U.S. Domestic Package		16.77			15.76			6	%		16.43			16.06			2	%
International Priority		57.85			52.52			10	%		56.96			53.73			6	%
International Domestic1		8.77			11.40			(23	%)		8.76			13.99			(37	%)
Composite Package Yield	$	22.02		$	20.70			6	%	$	21.69		$	21.46			1	%
Revenue Per Freight Pound:
U.S.	$	1.09		$	0.97			12	%	$	1.06		$	0.99			7	%
International Priority		2.19			2.20			(0	%)		2.19			2.18			0	%
International Airfreight		0.89			0.85			5	%		0.85			0.85			—
Composite Freight Yield	$	1.25		$	1.12			12	%	$	1.23		$	1.13			9	%
Average Full-Time Equivalents (000s)1		132			125			6	%		131			122			7	%

1 — The current year includes the DTW Group, ANC Holdings and Prakash Air acquisitions.

2 — Prior year amounts have been revised to conform to the current year segment presentation.

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FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Third Quarter Fiscal 2008
(Dollars in millions)
(Unaudited)

	Three Months Ended									Nine Months Ended
	Feb. 29, 2008			Feb. 28, 2007			%			Feb. 29, 2008			Feb. 28, 2007			%
FINANCIAL HIGHLIGHTS
Revenue	$	1,720		$	1,523			13	%	$	5,036		$	4,460			13	%
Operating Expenses:
Salaries and employee benefits		272			251			8	%		804			748			7	%
Purchased transportation		699			597			17	%		2,016			1,742			16	%
Rentals		49			45			9	%		142			125			14	%
Depreciation and amortization		77			71			8	%		227			197			15	%
Fuel		51			26			96	%		131			85			54	%
Maintenance and repairs		36			35			3	%		108			98			10	%
Intercompany charges		172			141			22	%		496			420			18	%
Other		194			161			20	%		579			497			16	%
Total Operating Expenses		1,550			1,327			17	%		4,503			3,912			15	%
Operating Income	$	170		$	196			(13	%)	$	533		$	548			(3	%)
Operating Margin		9.9	%		12.9	%	(3.0 pts)				10.6	%		12.3	%	(1.7 pts)
OPERATING STATISTICS
Operating Weekdays		63			62			2	%		191			190			1	%
Average Daily Package Volume (000s)
FedEx Ground		3,445			3,216			7	%		3,385			3,125			8	%
FedEx SmartPost		707			647			9	%		636			605			5	%
Yield (Revenue Per Package)
FedEx Ground	$	7.50		$	7.26			3	%	$	7.39		$	7.14			4	%
FedEx SmartPost	$	2.11		$	1.92			10	%	$	2.08		$	1.88			11	%

Prior year amounts have been revised to conform to the current year segment presentation.

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FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Third Quarter Fiscal 2008
(Dollars in millions)
(Unaudited)

	Three Months Ended									Nine Months Ended
	Feb. 29, 2008			Feb. 28, 2007			%			Feb. 29, 2008			Feb. 28, 2007			%
FINANCIAL HIGHLIGHTS
Revenue	$	1,155		$	1,101			5	%	$	3,624		$	3,339			9	%
Operating Expenses:
Salaries and employee benefits		582			569			2	%		1,784			1,645			8	%
Purchased transportation		139			117			19	%		416			340			22	%
Rentals and landing fees		30			30			—			87			83			5	%
Depreciation and amortization		56			55			2	%		171			138			24	%
Fuel		148			111			33	%		419			339			24	%
Maintenance and repairs		39			42			(7	%)		131			119			10	%
Intercompany charges		20			15			33	%		61			45			36	%
Other		95			112			(15	%)		325			292			11	%
Total Operating Expenses		1,109			1,051			6	%		3,394			3,001			13	%
Operating Income	$	46		$	50			(8	%)	$	230		$	338			(32	%)
Operating Margin		4.0	%		4.5	%	(0.5 pts)				6.3	%		10.1	%	(3.8 pts)
OPERATING STATISTICS
LTL Operating Weekdays		62			62			—			189			189			—
LTL Shipments Per Day (000s)		75			77			(3	%)		79			77			3	%
Weight Per LTL Shipment (lbs)		1,143			1,129			1	%		1,134			1,128			1	%
LTL Revenue/CWT	$	19.63		$	18.68			5	%	$	19.53		$	18.45			6	%

The results of operations for FedEx National LTL are included in our consolidated results from the date of acquisition on September 3, 2006.

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