UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED ~~November~~February 3029, ~~2015~~2016 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: 1-7806

FEDERAL EXPRESS CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		71-0427007
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3610 Hacks Cross Road Memphis, Tennessee		38125
(Address of principal executive offices)		(ZIP Code)

(901) 369-3600

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate 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 x No ¨

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


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

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

The number of shares of common stock outstanding as of ~~December~~March 16, ~~2015~~2016 was 1,000. The Registrant is a wholly owned subsidiary of FedEx Corporation, and there is no market for the Registrant’s common stock.

The Registrant meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format permitted by General Instruction H(2).

FEDERAL EXPRESS CORPORATION

INDEX

PART I. FINANCIAL INFORMATION
			PAGE
ITEM 1. Financial Statements
Condensed Consolidated Balance SheetsNovember 30, 2015 and May 31, 2015			3
Condensed Consolidated Balance SheetsFebruary 29, 2016 and May 31, 2015			3
Condensed Consolidated Statements of IncomeThree and Six Months Ended November 30, 2015 and 2014			5
Condensed Consolidated Statements of IncomeThree and Nine Months Ended February 29, 2016 and February 28, 2015			5
Condensed Consolidated Statements of Comprehensive IncomeThree and Six Months Ended November 30, 2015 and 2014			6
Condensed Consolidated Statements of Comprehensive IncomeThree and Nine Months Ended February 29, 2016 and February 28, 2015			6
Condensed Consolidated Statements of Cash FlowsSix Months Ended November 30, 2015 and 2014			7
Condensed Consolidated Statements of Cash FlowsNine Months Ended February 29, 2016 and February 28, 2015			7
Notes to Condensed Consolidated Financial Statements			8
Report of Independent Registered Public Accounting Firm			14
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition			15
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			2423
ITEM 4. Controls and Procedures			2423
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings			2524
ITEM 1A. Risk Factors			2524
ITEM 6. Exhibits			25
ITEM 5. Other Information			24
Signature			27
ITEM 6. Exhibits			24
Signature			26
Exhibit Index			E-1
Exhibit 2.1
Exhibit 2.2
Exhibit 2.3
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 12.1
Exhibit 15.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Ex-101 Instance Document
Exhibit 101 – Instance Document
Ex-101 Schema Document
Exhibit 101 – Schema Document
Ex-101 Calculation Linkbase Document
Exhibit 101 – Calculation Linkbase Document
Ex-101 Presentation Linkbase Document
Exhibit 101 – Presentation Linkbase Document
Ex-101 Definition Linkbase Document
Exhibit 101 – Definition Linkbase Document

-2-

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

	November 30,2015(Unaudited)		May 31,2015
	February 29,2016(Unaudited)		May 31,2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	~~922~~981	$	884
Receivables, less allowances of $82 and $92		1,493		1,549
Receivables, less allowances of $79 and $92		1,457		1,549
Spare parts, supplies and fuel, less allowances of $210 and $204		381		394
Spare parts, supplies and fuel, less allowances of $209 and $204		369		394
Deferred income taxes		~~382~~380		378
Due from parent company and other FedEx subsidiaries		~~534~~584		501
Prepaid expenses and other		~~121~~124		108
Total current assets		3,~~833~~895		3,814
PROPERTY AND EQUIPMENT, AT COST		2728,~~747~~007		26,286
Less accumulated depreciation and amortization		1213,~~896~~193		12,392
Net property and equipment		14,~~851~~814		13,894
OTHER LONG-TERM ASSETS
Goodwill		1,~~383~~341		1,448
Other assets		~~893~~973		1,104
Total other long-term assets		2,~~276~~314		2,552
	$	2021,~~960~~023	$	20,260

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

-3-

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE DATA)

	November 30,2015(Unaudited)			May 31,2015
	February 29,2016(Unaudited)			May 31,2015
LIABILITIES AND OWNER’S EQUITY
CURRENT LIABILITIES
Current portion of long-term debt	$	53		$	7
Accrued salaries and employee benefits		~~1,078~~971			1,014
Accounts payable		1,~~182~~093			1,257
Accrued expenses		~~975~~949			1,056
Due to other FedEx subsidiaries		1,~~998~~777			1,932
Total current liabilities		54,~~238~~793			5,266
LONG-TERM DEBT, LESS CURRENT PORTION		239			239
OTHER LONG-TERM LIABILITIES
Deferred income taxes		12,~~703~~078			1,712
Pension, postretirement healthcare and other benefit obligations		1,~~266~~291			1,251
Self-insurance accruals		~~800~~804			711
Deferred lease obligations		~~682~~549			572
Deferred gains, principally related to aircraft transactions		~~165~~158			178
Other liabilities		~~137~~145			117
Total other long-term liabilities		45,~~753~~025			4,541
COMMITMENTS AND CONTINGENCIES
OWNER’S EQUITY
Common stock, $0.10 par value; 1,000 shares authorized, issued and outstanding		—			—
Additional paid-in capital		608			608
Retained earnings		10,~~522~~854			9,839
Accumulated other comprehensive loss		(~~400~~496	)		(233	)
Total owner’s equity		10,~~730~~966			10,214
	$	2021,~~960~~023		$	20,260

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

-4-

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN MILLIONS)

Three Months EndedNovember 30,

Six Months EndedNovember 30,

Three Months Ended

Nine Months Ended

2015

2014

2015

2014

February 29,2016

February 28,2015

February 29,2016

February 28,2015

(As Adjusted)

REVENUES

6,~~293~~318

6,~~715~~388

1218,~~605~~923

1319,~~299~~687

OPERATING EXPENSES:

Salaries and employee benefits

2,~~422~~509

2,~~399~~444

47,~~855~~364

47,~~754~~198

Purchased transportation

~~420~~398

~~465~~432

~~839~~1,237

~~922~~1,354

Rentals and landing fees

~~391~~445

~~416~~428

~~794~~1,239

~~835~~1,263

Depreciation and amortization

~~346~~340

~~365~~362

~~690~~1,030

~~736~~1,098

Fuel

~~517~~455

~~906~~697

1,~~124~~579

12,~~876~~573

Maintenance and repairs

~~329~~304

~~356~~322

~~672~~976

~~733~~1,055

Intercompany charges, net

~~490~~494

~~476~~483

~~964~~1,458

~~951~~1,434

Other

~~799~~818

~~843~~816

12,~~587~~405

12,~~629~~445

5,714

6,226

11,525

12,436

5,763

5,984

17,288

18,420

OPERATING INCOME

~~579~~555

~~489~~404

1,~~080~~635

~~863~~1,267

OTHER INCOME (EXPENSE):

Interest, net

1316

813

Other, net

(4850

)

(2534

)

(84134

)

(5791

)

(44

)

(20

)

(71

)

(49

)

(47

)

(29

)

(118

)

(78

)

INCOME BEFORE INCOME TAXES

~~535~~508

~~469~~375

1,~~009~~517

~~814~~1,189

PROVISION FOR INCOME TAXES

~~165~~175

~~165~~131

~~327~~502

~~285~~416

NET INCOME

~~370~~333

~~304~~244

~~682~~1,015

~~529~~773

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

-5-

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN MILLIONS)

	Three Months EndedNovember 30,						Six Months EndedNovember 30,
	Three Months Ended						Nine Months Ended
	2015			2014			2015			2014
	February 29,2016			February 28,2015			February 29,2016			February 28,2015
				(As Adjusted)						(As Adjusted)
NET INCOME	$	~~370~~333		$	~~304~~244		$	~~682~~1,015		$	~~529~~773
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax of $2, $11, $12 and $19		(30	)		(119	)		(161	)		(148	)
Foreign currency translation adjustments, net of tax of $9, $13, $22 and $32		(96	)		(146	)		(257	)		(294	)
Amortization of prior service credit, net of tax of $0, $1, $3 and $1		—			—			(6	)		(1	)
Amortization of prior service credit, net of tax of $0, $0, $3 and $1		—			—			(6	)		(1	)
		(30	)		(119	)		(167	)		(149	)
		(96	)		(146	)		(263	)		(295	)
COMPREHENSIVE INCOME	$	~~340~~237		$	~~185~~98		$	~~515~~752		$	~~380~~478

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

-6-

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN MILLIONS)

	Six Months EndedNovember 30,
	Nine Months Ended
	2015			2014
	February 29,2016			February 28,2015
				(As Adjusted)
Operating Activities:
Net income	$	~~682~~1,015		$	~~529~~773
Noncash charges:
Depreciation and amortization		~~690~~1,030			~~736~~1,098
Other, net		41426			4176
Changes in assets and liabilities, net		~~171~~(461	)		(~~150~~329	)
Cash provided by operating activities		12,~~584~~010			1,~~119~~718
Investing Activities:
Capital expenditures		(1,~~513~~857	)		(1,~~079~~644	)
Other		1215			41
Cash used in investing activities		(1,~~501~~842	)		(1,~~075~~643	)
Financing Activities:
Principal payments on debt		(27	)		—
Cash used in financing activities		(27	)		—
Effect of exchange rate changes on cash		(4364	)		(5490	)
Net increase (decrease) in cash and cash equivalents		3897			(1015	)
Cash and cash equivalents at beginning of period		884			858
Cash and cash equivalents at end of period	$	~~922~~981		$	~~848~~843

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

-7-

FEDERAL EXPRESS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) General

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. These interim financial statements of Federal Express Corporation (“FedEx Express”) have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission 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, 2015 (“Annual Report”). Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in our Annual Report.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly our financial position as of ~~November~~February 3029, ~~2015~~2016, the results of our operations for the three- and ~~six~~nine-month periods ended ~~November~~February 3029, ~~2015~~2016 and ~~2014~~February 28, ~~and~~2015 and cash flows for the ~~six~~ nine-month periods ended ~~November~~February 3029, ~~2015~~2016 and ~~2014.~~February 28, 2015. Operating results for the three- and ~~six~~nine-month periods ended ~~November~~February 3029, ~~2015~~2016 are not necessarily indicative of the results that may be expected for the year ending May 31, 2016.

We are a wholly owned subsidiary of FedEx Corporation (“FedEx”) engaged in a single line of business and operate in one business segment – the worldwide express transportation and distribution of goods and documents.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2016 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

PENSION AND POSTRETIREMENT HEALTHCARE PLANS. During the fourth quarter of 2015, we changed our method of accounting for our defined benefit pension and postretirement healthcare plans as discussed in our Annual Report. Prior year amounts have been recast to conform to these accounting changes.

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. Our pilots, which represent a small number of our total employees, are employed under a ~~newly ratified~~ collective bargaining agreement (“CBA”). The new CBA was ratified by our pilots in a vote concluded on October 20, 2015, and is the product of 32 months of bargaining under the Railway Labor Act of 1926, as amended (“RLA”), the last 10 months of which were mediated by the National Mediation Board (the U.S. governmental agency that ~~oversees~~ ~~labor agreements for entities covered by the RLA). The new CBA~~ took effect on November 2, 2015,. ~~and~~The CBA is scheduled to become amendable in November 2021, after a six-year term. In addition to our pilots, certain non-U.S. employees are unionized.

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

Our stock-based compensation expense was $119 million for the three-month period ended ~~November~~February 3029, ~~2015~~2016 and $2837 million for the ~~six~~nine-month period ended ~~November~~February 3029, ~~2015~~2016. Our stock-based compensation expense was $109 million for the three-month period ended ~~November~~February 3028, ~~2014~~2015 and $2635 million for the ~~six~~nine-month period ended ~~November~~February 3028, ~~2014~~2015. This amount represents the amount charged to us by FedEx for awards granted to our employees.

LONG-TERM DEBT. Long-term debt, exclusive of capital leases, had a carrying value of $239 million at ~~November~~February 3029, ~~2015~~ 2016 and May 31, 2015 compared with an estimated fair value of $~~312~~304 million at ~~November~~February 3029, ~~2015~~2016 and $345 million at May 31, 2015. 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.

-8-

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

~~During~~In the second quarter of 2016, we chose to early adopt the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) requiring acquirers in a business combination to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period that the adjustment amounts are determined and eliminates the requirement to retrospectively account for these adjustments. It also requires additional disclosure about the effects of the adjustments on prior periods. Adoption of this guidance had no impact on our financial reporting.

On ~~November~~February 1125, ~~2015~~2016, the FASB ~~voted~~issued the new lease accounting standard which requires lessees to ~~proceed~~put ~~with~~most leases on their balance sheets but recognize the ~~new~~expenses ~~lease~~on ~~accounting~~their income statements in a manner similar to current practice. The new standard states that a lessee will ~~require companies~~recognize a lease liability for the obligation to ~~include~~make lease payments and a right-of-use asset ~~and~~for athe ~~liability~~right to ~~make~~use ~~lease~~the ~~payments~~underlying onasset for the ~~balance~~lease term. Expense ~~sheet~~related ~~for~~to ~~all~~leases determined to be operating leases ~~(except~~will ~~short~~be recognized on a straight-~~term~~line ~~leases).~~basis, ~~This~~while ~~new~~those ~~standard~~determined to be financing leases will ~~have~~be recognized following a ~~significant~~front-loaded ~~impact~~expense onprofile ~~our~~in ~~accounting~~which interest and amortization are presented separately in the income statement. We are currently evaluating the impact of this new standard on our financial reporting, but recognizing the lease liability and related right-of-use asset will besignificantly impact our balance sheet. These changes will be effective for our fiscal year ~~ending~~beginning ~~May~~June 311, 2019 (fiscal 2020), with a modified retrospective adoption method to the beginning of 2018.

On November 20, 2015, the FASB issued an Accounting Standards Update that will require companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This new guidance will have minimal impact on our accounting and financial reporting, and ~~will~~we beplan ~~effective~~to ~~for~~early ~~our~~adopt ~~fiscal~~on ~~year~~a ~~ending~~retrospective ~~May 31,~~basis ~~2018~~in the fourth quarter of 2016.

We believe that no other new accounting guidance was adopted or issued during the ~~first~~nine ~~half~~months of 2016 that is relevant to the readers of our financial statements.

(2) Accumulated Other Comprehensive Loss

The following table provides changes in accumulated other comprehensive loss (“AOCI”), net of tax, reported in our ~~condensed~~unaudited condensed consolidated financial statements for the periods ended ~~November~~February 3029, 2016 and February 28, 2015 (in millions; amounts in parentheses indicate debits to AOCI):

	Three Months Ended						~~Six~~Nine Months Ended
	2015			2014			2015			2014
	2016			2015			2016			2015
Foreign currency translation gain (loss):
Balance at beginning of period	$	(~~381~~411	)	$	42(77	)	$	(250	)	$	71
Translation adjustments		(3096	)		(~~119~~146	)		(~~161~~257	)		(~~148~~294	)
Balance at end of period		(~~411~~507	)		(77223	)		(~~411~~507	)		(77223	)
Retirement plans adjustments:
Balance at beginning of period		11			21			17			22
Reclassifications from AOCI		—			—			(6	)		(1	)
Balance at end of period		11			21			11			21
Accumulated other comprehensive loss at end of period	$	(~~400~~496	)	$	(56202	)	$	(~~400~~496	)	$	(56202	)

Due to its immateriality, the table presenting details of reclassifications from AOCI has been excluded from this quarterly report.

-9-

(3) Retirement Plans

We sponsor or participate in programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans and postretirement healthcare plans. A majority of our employees are covered by the FedEx Corporation Employees’ Pension Plan ~~(“FedEx Plan”)~~, a defined benefit pension plan sponsored by FedEx. Defined contribution plans are in place covering a majority of U.S. employees and certain international employees. We also sponsor or participate in nonqualified benefit plans covering certain of our U.S. employee groups and other pension plans covering certain of our international employees. For more information, refer to the financial statements of FedEx included in its Form 10-Q for the quarter ended ~~November~~February 3029, ~~2015~~2016 and in our Annual Report.

Our retirement plans costs for the periods ended ~~November~~February 3029, 2016 and February 28, 2015 were as follows (in millions):

	Three Months Ended				~~Six~~Nine Months Ended
	2015		2014		2015		2014
	2016		2015		2016		2015
Pension plans sponsored by FedEx	$	1516	$	2019	$	3147	$	3958
Defined benefit pension plans		1211		1011		2334		2132
Defined contribution plans		64		6062		~~128~~187		~~121~~183
Postretirement healthcare plans		1516		1516		3147		3147
	$	~~106~~107	$	~~105~~108	$	~~213~~315	$	~~212~~320

The components of the net periodic benefit cost of the pension and postretirement healthcare plans currently sponsored by us were individually immaterial for all periods presented. No material contributions were made during the ~~first~~nine ~~half~~months of 2016 or 2015 to pension plans sponsored by us, and we do not expect to make material contributions in 2016.

(4) Commitments

As of ~~November~~February 3029, ~~2015~~2016, our purchase commitments under various contracts for the remainder of 2016 and annually thereafter were as follows (in millions):

	Aircraft andAircraft-Related		Other(1)		Total
2016 (remainder)	$	~~228~~94	$	5243	$	~~280~~137
2017		1,~~286~~283		4547		1,~~331~~330
2018		1,~~755~~748		4041		1,~~795~~789
2019		1,~~575~~569		1112		1,~~586~~581
2020		1,~~646~~633		89		1,~~654~~642
Thereafter		5,~~867~~779		7376		5,~~940~~855
Total	$	12,~~357~~106	$	~~229~~228	$	12,~~586~~334

⁽¹⁾	Primarily advertising and promotions contracts.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of ~~November~~February 3029, ~~2015~~2016, our obligation to purchase ~~six~~five Boeing 767-300 Freighter (“B767F”) aircraft and nine Boeing 777 Freighter (“B777F”) aircraft is conditioned ~~upon~~ upon there being no event that causes us or our employees not to be covered by the ~~RLA~~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.

-10-

We had $~~326~~363 million in deposits and progress payments as of ~~November~~February 3029, ~~2015~~2016 on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our consolidated balance sheets. Aircraft and aircraft-related contracts are subject to price escalations. The following table is a summary of the key aircraft we are committed to purchase as of ~~November~~February 3029, ~~2015~~2016 with the year of expected delivery:

	B767F		B777F		Total
2016 (remainder)		21		—		21
2017		12		—		12
2018		16		2		18
2019		13		2		15
2020		12		3		15
Thereafter		26		9		35
Total		8180		16		9796

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at ~~November~~February 3029, ~~2015~~2016 is as follows (in millions):

Operating Leases

Aircraft and Related Equipment

Facilities and Other

Total Operating Leases

2016 (remainder)

~~393~~84

~~339~~414

~~732~~498

2017

403

~~880~~889

1,~~283~~292

2018

332

~~563~~573

~~895~~905

2019

274

~~484~~493

~~758~~767

2020

190

~~418~~424

~~608~~614

Thereafter

360

3,~~263~~076

3,~~623~~436

Total

1,~~952~~643

5,~~947~~869

7,~~899~~512

Future minimum lease payments under capital leases were immaterial at ~~November~~February 3029, ~~2015~~2016. 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.

(5) Contingencies

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

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

-11-

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

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

Other Matters. On June 30, 2014, we received a Statement of Objections from the French Competition Authority (“FCA”) addressed to to FedEx Express France, formerly known as TATEX, regarding an investigation by the FCA into anticompetitive behavior that is alleged to have occurred primarily in the framework of trade association meetings that included the former general managers of of TATEX prior to our acquisition of that company in July 2012. In September 2014, FedEx Express France submitted its observations in response to the Statement of Objections to the FCA. In April 2015, the FCA issued a report responding to the observations submitted by all companies involved in the investigation. We submitted an answer to the FCA’s report in early July. ~~Loss~~In ~~in this matter is probable, and in~~ the fourth quarter of 2015, we established an accrual for the estimated probable loss. This amount was immaterial.

A hearing in this matter before the Board of the FCA occurred on September 30, 2015. On ~~December~~ December 15, 2015, the FCA announced its decision and related fines against all companies involved in the investigation. FedEx Express France was fined €17 million ~~(currently, $19 million)~~. We ~~are~~did ~~analyzing~~not appeal the FCA decision. ~~and~~In ~~are~~the ~~considering~~third ~~the possibility~~quarter of an2016, ~~appeal.~~we ~~Based~~increased on the accrual to that amount ($19 ~~previously~~million). ~~accrued~~We ~~and~~plan ~~available~~to ~~indemnification,~~pursue noall ~~adjustment~~available toremedies against the ~~accrued~~sellers ~~amount~~of isTATEX ~~necessary~~to atrecover our losses in this ~~time~~matter.

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

(6) Parent/Affiliate Transactions

Affiliate company balances that are currently receivable or payable relate to charges for services provided to or by other FedEx affiliates, which are settled on a monthly basis, or the net activity from participation in FedEx’s consolidated cash management program. In addition, we are allocated net interest on these amounts at market rates.

We maintain an accounts receivable arrangement with FedEx TechConnect, Inc. (“FedEx TechConnect”), a wholly owned subsidiary of FedEx Corporate Services, Inc. (“FedEx Services”). FedEx Services is a wholly owned subsidiary of FedEx. Under this arrangement, we recognize revenue for the transportation services provided to our U.S. customers and factor the related receivables to FedEx TechConnect for collection. We have no continuing involvement with the receivables transferred to FedEx TechConnect. Our net receivables recorded by FedEx TechConnect totaled $1.6 billion at ~~November~~February 3029, ~~2015~~2016 and $1.7 billion at May 31, 2015.

The costs of FedEx Services, FedEx TechConnect and FedEx Office and Print Services, Inc., as well as charges for management fees from our parent, are allocated to us and are included in the expense line item “Intercompany charges, net” based on metrics such as relative revenues or estimated services provided. We believe these allocations approximate the net cost of providing the functions. FedEx allocation methodologies are refined as necessary to reflect changes in our business.

-12-

(7) Supplemental Cash Flow Information

Cash paid for interest expense and income taxes for the ~~six~~nine-month periods ended ~~November~~February 3029, ~~was~~2016 and February 28, 2015 was as follows (in millions):

	2015			2014
	2016			2015
Cash payments for:
Income taxes	$	~~401~~537		$	~~295~~428
Income tax refunds received		(3364	)		(3214	)
Cash tax payments, net	$	~~398~~173		$	~~292~~214

-13-

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholder

Federal Express Corporation

We have reviewed the condensed consolidated balance sheet of Federal Express Corporation as of ~~November~~February 3029, ~~2015~~2016, and the related condensed consolidated statements of income and comprehensive income for the three-month and ~~six~~nine-month periods ended ~~November~~February 3029, ~~2015~~2016 and ~~2014~~February 28, 2015 and the condensed consolidated statements of cash flows for the ~~six~~nine-month periods ended ~~November~~February 3029, ~~2015~~2016 and ~~2014~~February 28, 2015. 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 Federal Express Corporation as of May 31, 2015, and the related consolidated statements of income, comprehensive loss, changes in owner’s equity, 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 14, 2015. In our opinion, the accompanying condensed consolidated balance sheet of Federal Express Corporation as of May 31, 2015, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Memphis, Tennessee

~~December~~March 17, 2016 ~~2015~~

-14-

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”)~~, which describes the principal factors affecting the results of operations and financial condition of Federal Express Corporation (“FedEx Express”), is abbreviated pursuant to General Instruction H(2)(a) of Form 10-Q. 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, 2015 (“Annual Report”). Our Annual Report includes additional information about our significant accounting policies, practices and the transactions that underlie our financial results. For additional information, including a discussion of outlook, liquidity, capital resources, contractual cash obligations and critical accounting estimates, see the Quarterly Report on Form 10-Q of our parent, FedEx Corporation (“FedEx”), for the quarter ended ~~November~~February 3029, ~~2015~~2016.

We are the world’s largest express transportation company. Our sister company FedEx Corporate Services, Inc. (“FedEx Services”) provides us and our other sister companies, including FedEx Ground Package System, Inc. (“FedEx Ground”), with sales, marketing, information technology, communications and certain back-office support, as well as retail access for our customers through FedEx Office and Print Services, Inc. (“FedEx Office”) and customer service, technical support and billing and collection services through FedEx TechConnect, Inc.

The operating expenses line item “Intercompany charges” on the financial summary represents an allocation that primarily includes salaries and benefits, depreciation and other costs for the sales, marketing, information technology and customer service support provided to us by FedEx Services and FedEx Office’s net operating costs. These costs are allocated based on metrics such as relative revenues or estimated services provided. For the international regions of FedEx Express, similar functions are performed on a regional basis by FedEx Express and reported in expense line items outside of intercompany charges. “Intercompany charges” also includes allocated charges from our parent for management fees related to services received for general corporate oversight, including executive officers and certain legal and finance functions. We believe the total amounts allocated approximate the net cost of providing these functions. FedEx allocation methodologies are refined as necessary to reflect changes in our business.

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 volume of shipments transported through our network, as measured by our average daily volume and shipment weight;

•

the mix of services purchased by our customers;

•

the prices we obtain for our services, as measured by yield (revenue per package or pound);

•

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

•

the timing and amount of fluctuations in fuel prices and our ability to recover incremental fuel costs through our fuel surcharges.

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

-15-

-16-

RESULTS OF OPERATIONS

We offer a wide range of U.S. domestic and international shipping services for delivery of packages and freight including priority services, which provide time-definite delivery within one, two or three business days worldwide, and deferred or economy services, which provide time-definite delivery within five business days worldwide. The following tables compare revenues, operating expenses, operating expenses as a percent of revenue, operating income, net income and operating margin (dollars in millions) for the periods ended ~~November~~February 3029, 2016 and February 28, 2015 and amounts have been recast to conform to pension accounting changes further discussed in our Annual Report:

	Three Months Ended						Percent			~~Six~~Nine Months Ended						Percent
	2015			2014			Change			2015			2014			Change
	2016			2015			Change			2016			2015			Change
Revenues:
Package:
U.S. overnight box	$	1,~~682~~704		$	1,~~705~~653			(13	)	$	35,~~340~~044		$	35,~~387~~040			(1—	)
U.S. overnight envelope		~~397~~408			~~400~~392			(14	)		~~819~~1,227			~~815~~1,207			—2
U.S. deferred		~~826~~926			~~834~~895			(13	)		12,~~642~~568			12,~~629~~524			12
Total U.S. domestic package revenue		23,~~905~~038			2,~~939~~940			(13	)		58,~~801~~839			58,~~831~~771			(1	)
International priority		1,~~433~~346			1,~~649~~463			(138	)		24,~~897~~243			34,~~279~~742			(1211	)
International economy		~~568~~546			~~598~~560			(53	)		1,~~142~~688			1,~~169~~729			(2	)
Total international export package revenue		21,~~001~~892			2,~~247~~023			(116	)		45,~~039~~931			46,~~448~~471			(98	)
International domestic(1)		~~336~~303			~~383~~328			(128	)		~~663~~966			~~754~~1,082			(1211	)
Total package revenue		5,~~242~~233			5,~~569~~291			(61	)		1015,~~503~~736			1116,~~033~~324			(54	)
Freight:
U.S.		~~578~~647			~~586~~580			(112	)		1,~~151~~798			1,~~165~~745			(13	)
International priority		~~354~~325			~~412~~375			(1413	)		~~704~~1,029			~~807~~1,182			(13	)
International airfreight		3230			4245			(2433	)		6898			88133			(2326	)
Total freight revenue		~~964~~1,002			1,~~040~~000			(7—	)		12,~~923~~925			23,060			(74	)
Other		8783			~~106~~97			(1814	)		~~179~~262			~~206~~303			(1314	)
Total revenues		6,~~293~~318			6,~~715~~388			(61	)		1218,~~605~~923			1319,~~299~~687			(54	)
Operating expenses:
Salaries and employee benefits		2,~~422~~509			2,~~399~~444			13			47,~~855~~364			47,~~754~~198			2
Purchased transportation		~~420~~398			~~465~~432			(108	)		~~839~~1,237			~~922~~1,354			(9	)
Rentals and landing fees		~~391~~445			~~416~~428			(64	)		~~794~~1,239			~~835~~1,263			(52	)
Depreciation and amortization		~~346~~340			~~365~~362			(56	)		~~690~~1,030			~~736~~1,098			(6	)
Fuel		~~517~~455			~~906~~697			(4335	)		1,~~124~~579			12,~~876~~573			(4039	)
Maintenance and repairs		~~329~~304			~~356~~322			(86	)		~~672~~976			~~733~~1,055			(87	)
Intercompany charges		~~490~~494			~~476~~483			32			~~964~~1,458			~~951~~1,434			12
Other		~~799~~818			~~843~~816			(5—	)		12,~~587~~405			12,~~629~~445			(32	)
Total operating expenses		5,~~714~~763			65,~~226~~984			(84	)		1117,~~525~~288			1218,~~436~~420			(76	)
Operating income	$	~~579~~555		$	~~489~~404			1837		$	1,~~080~~635		$	~~863~~1,267			2529
Operating margin		98.28	%		76.3	%		~~190~~250	bp		8.6	%		6.54	%		~~210~~220	bp
Other income (expense):
Interest, net		43			5			(2040	)		1316			813			6323
Other, net		(4850	)		(2534	)		9247			(84134	)		(5791	)		47
		(44	)		(20	)		120			(71	)		(49	)		45
		(47	)		(29	)		62			(118	)		(78	)		51
Income before income taxes		~~535~~508			~~469~~375			1435			1,~~009~~517			~~814~~1,189			2428
Provision for income taxes		~~165~~175			~~165~~131			—34			~~327~~502			~~285~~416			1521
Net income	$	~~370~~333		$	~~304~~244			2236		$	~~682~~1,015		$	~~529~~773			2931

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

-1716-

	Percent of Revenue
	Three Months Ended						~~Six~~Nine Months Ended
	2015			2014			2015			2014
	2016			2015			2016			2015
Operating expenses:
Salaries and employee benefits		3839.57	%		3538.73	%		38.59	%		3536.75	%
Purchased transportation		6.73			6.97			6.75			6.9
Rentals and landing fees		67.20			6.27			6.36			6.34
Depreciation and amortization		5.54			5.47			5.54			5.56
Fuel		87.2			1310.59			8.94			1413.1
Maintenance and repairs		54.28			5.30			5.32			5.54
Intercompany charges		7.8			7.16			7.67			7.23
Other		1213.70			12.68			12.67			12.34
Total operating expenses		9091.82			9293.7			91.4			93.56
Operating margin		98.28	%		76.3	%		8.6	%		6.54	%

The following table compares selected statistics (in thousands, except yield amounts) for the periods ended ~~November~~February 3029, 2016 and February 28, 2015:

	Three Months Ended				Percent			~~Six~~Nine Months Ended				Percent
	2015		2014		Change			2015		2014		Change
	2016		2015		Change			2016		2015		Change
Package Statistics
Average daily package volume (ADV):
U.S. overnight box		1,~~290~~316		1,~~259~~258		25			1,~~250~~271		1,~~235~~243		12
U.S. overnight envelope		~~531~~535		~~521~~516		24			536		~~524~~521		23
U.S. deferred		~~900~~1,015		~~915~~1,024		(21	)		~~882~~926		~~880~~928		—
Total U.S. domestic ADV		2,~~721~~866		2,~~695~~798		12			2,~~668~~733		2,~~639~~692		12
International priority		~~402~~386		~~424~~398		(53	)		~~396~~393		~~417~~410		(54	)
International economy		~~186~~179		~~180~~175		32			~~181~~180		175		3
Total international export ADV		~~588~~565		~~604~~573		(31	)		~~577~~573		~~592~~585		(32	)
International domestic(1)		~~954~~878		~~917~~831		46			~~903~~895		~~866~~854		45
Total ADV		4,~~263~~309		4,~~216~~202		13			4,~~148~~201		4,~~097~~131		12
Revenue per package (yield):
U.S. overnight box	$	20.7056	$	2120.5085		(41	)	$	20.8977	$	21.5934		(3	)
U.S. overnight envelope		1112.8711		12.1507		(2—	)		11.9399		12.2418		(32	)
U.S. deferred		14.5548		1413.4888		—4			14.5452		14.5832		—1
U.S. domestic composite		16.9483		1716.3168		(21	)		16.9993		17.4015		(21	)
International priority		5655.5235		6158.6440		(85	)		5756.1959		6160.9279		(87	)
International economy		48.5336		5250.8860		(84	)		49.3502		52.7503		(6	)
International export composite		5453.0014		5956.0401		(95	)		54.7321		5958.2117		(87	)
International domestic(1)		5.5947		6.6328		(1613	)		5.7365		6.8567		(1615	)
Composite package yield		19.5227		2019.9799		(74	)		19.7861		2120.2180		(76	)
Freight Statistics
Average daily freight pounds:
U.S.		8,~~213~~340		8,~~039~~145		2			7,~~738~~937		7,~~676~~831		1
International priority		2,~~605~~414		2,~~983~~823		(1314	)		2,~~547~~503		2,~~887~~866		(1213	)
International airfreight		~~678~~622		~~630~~718		8(13	)		~~643~~636		~~650~~673		(15	)
Total average daily freight pounds		11,~~496~~376		11,~~652~~686		(13	)		1011,~~928~~076		11,~~213~~370		(3	)
Revenue per pound (yield):
U.S.	$	1.1223	$	1.1613		(39	)	$	1.1619	$	1.2017		(32	)
International priority		2.1614		2.1911		(1	)		2.1615		2.2017		(21	)
International airfreight		0.7576		1.0700		(3024	)		0.8381		1.0704		(22	)
Composite freight yield		1.3340		1.4236		(63	)		1.3738		1.4542		(63	)

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

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Revenues

Our revenues decreased 61% in the ~~second~~third quarter and 54% in the ~~first~~nine ~~half~~months of 2016 primarily due to lower fuel surcharges and unfavorable exchange rates. These factors were partially offset by improved U.S. ~~domestic~~ domestic and international export ~~base~~ yield management and U.S. domestic volume growth. Revenues in the ~~first~~nine ~~half~~months of 2016 also benefited from one additional operating day.

U.S. domestic yields ~~decreased~~increased 21% in the ~~second~~third quarter due to higher base rates and ~~first~~were ~~half~~partially offset by the negative impact of lower fuel surcharges and decreased 1% in the nine months of 2016 due to the negative impact of lower fuel surcharges, ~~and~~which were partially offset by higher base rates. U.S. domestic volumes increased 12% in the ~~second~~third quarter and ~~first~~nine ~~half~~months of 2016 driven by our overnight service offerings. International export yields decreased 95% in the ~~second~~third quarter and 87% in the ~~first~~nine ~~half~~months of 2016 due to the negative impact of lower fuel surcharges and unfavorable exchange rates, which were partially offset by higher base rates ~~and higher weights~~. Freight yields decreased 63% in the ~~second~~nine ~~quarter~~months of ~~and~~2016 ~~first~~as ~~half~~the ofnegative ~~2016~~impact ~~due~~of to lower fuel surcharges and unfavorable exchange rates, ~~which were partially~~ offset by higher base rates. ~~Average~~International ~~daily freight~~domestic ~~pounds~~revenues ~~decreased~~declined 18% in the ~~second~~third quarter and 311% in the ~~first~~nine ~~half~~months of 2016 ~~primarily~~ due to ~~capacity reductions. International domestic revenues declined 12% in~~ the ~~second quarter and first half of 2016 due to the~~ negative impact of unfavorable exchange rates, which were partially offset by increased volumes.

Operating Income

Our operating income and operating margin increased despite lower revenues in the ~~second~~third quarter and ~~first~~in ~~half~~the ofnine ~~2016~~months ~~despite~~of ~~declining revenues~~2016. This increase was ~~primarily~~ primarily driven by ~~higher~~improved U.S. domestic and international export ~~base~~ yield management and U.S. domestic volume growth, profit improvement program initiatives that continued to improve revenue quality and constrain expenses, lower international expenses due to currency exchange rates. and the positive net impact of fuel. Also, operating income and operating margin benefited from one additional operating day in the ~~first~~nine ~~half~~months of ~~2016.~~ ~~Profit improvement program initiatives continued to improve revenue quality and constrain expenses for the second quarter and first half of~~ 2016.

Salaries and employee benefits increased 13% in the ~~second~~third quarter and 2% in the ~~first~~nine ~~half~~months of 2016 due to merit increases ~~and higher incentive compensation accruals~~, which were partially offset by a a favorable exchange rate impact. ~~Maintenance~~Higher incentive compensation accruals also impacted salaries and ~~repairs~~employee ~~expense~~benefits in the nine months of 2016. Purchased transportation decreased 8% in the ~~second~~third quarter and ~~first~~9% ~~half~~in ofthe ~~2016~~nine ~~due~~months toof ~~the~~2016 ~~timing~~driven ofby a ~~prior~~favorable ~~year~~exchange ~~aircraft~~rate ~~maintenance events~~impact. Aircraft retirements during 2015 caused depreciation and amortization expense to decrease 56% in the ~~second~~third quarter and 6%nine inmonths ~~the first half~~ of 2016. ~~Purchased~~Maintenance ~~transportation~~ and ~~Other~~repairs ~~expenses~~expense decreased 6% in the ~~second~~third quarter and in7% in the ~~first~~nine ~~half~~months of 2016 ~~driven~~primarily bydue ato ~~favorable~~the ~~exchange~~timing ~~rate~~of ~~impact~~prior year aircraft maintenance events.

Fuel

Fuel expense decreased 4335% in the ~~second~~third quarter and 4039% in the ~~first~~nine ~~half~~months of 2016 due to lower aircraft fuel prices. However, fuel prices represent only one component of the two factors we consider meaningful in understanding the impact of fuel on our business. Consideration must also be given to the fuel surcharge revenue we collect. Accordingly, we believe discussion of the net impact of fuel on our results, which is a comparison of the year-over-year change in these two factors, is important to understand the impact of fuel on our business. In order to provide information about the impact of fuel surcharges on the trend in revenue and yield growth, we have included the comparative weighted-average fuel surcharge percentages in effect for the ~~second~~third quarter and ~~first~~nine ~~half~~months of 2016 and 2015 below.

The index used to determine our fuel surcharges incorporates a timing lag of approximately six to eight weeks before they are adjusted for changes in fuel prices. For example, the fuel surcharge index in effect in ~~November~~February 2016 ~~2015~~ was set based on ~~September~~ December 2015 fuel prices. In addition, the structure of the table that is used to determine our fuel surcharge does not adjust immediately for changes in fuel price, but allows for the fuel surcharge revenue charged to our customers to remain unchanged as long as fuel prices remain within certain ranges.

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 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 75% 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.~~

-1918-

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 75% 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.

We routinely review our fuel surcharges and our fuel surcharge methodology. Effective February 2, 2015, we updated the tables used to determine our fuel surcharges.

The net impact of fuel had a ~~slightly~~modest ~~negative~~benefit ~~impact~~ in the ~~second~~third quarter and anine ~~minimal impact in the first half~~ months of 2016 to operating income. This was driven by the year-over-year decrease in fuel ~~surcharge~~prices ~~revenue~~ during the ~~second~~third quarter and ~~first~~nine ~~half~~months of 2016, which was partially offset by decreased fuel ~~prices~~surcharge revenue during these periods.

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. Our U.S. domestic and outbound fuel surcharge and the international fuel surcharges ranged as follows for the periods ended ~~November~~February 3029, 2016 and February 28, 2015:

	Three Months Ended						~~Six~~Nine Months Ended
	2015			2014			2015			2014
	2016			2015			2016			2015
U.S. Domestic and Outbound Fuel Surcharge:
Low		10.0075	%		83.0050	%		10.0075	%		83.0050	%
High		2.75			96.00			4.00			9.50
Weighted-average		12.8900			84.6980			2.6140			97.0962
International Fuel Surcharges:
Low		0.75			120.0050			0.75			120.0050
High		109.50			1715.5000			12.00			18.00
Weighted-average		65.5883			1511.5957			7.6908			1514.9249

On ~~September 15~~January 4, ~~2015~~2016, we ~~announced~~implemented a 4.9% average list price increase for our U.S. domestic, U.S. export and U.S. ~~import~~ import services ~~effective January 4, 2016~~. In addition, on November 2, 2015, we updated certain tables used to determine fuel surcharges. On February 2, 2015, we ~~also~~ updated the tables used to determine fuel surcharges. On January 5, 2015, we also implemented a 4.9% average list price increase for our U.S. domestic, U.S. export and U.S. import services.

Income Taxes

Our effective tax rate was 3034.84% for the ~~second~~third quarter and 3233.41% for the ~~first~~nine ~~half~~months of 2016, compared with 3534.29% in the ~~second~~third quarter and 35.0% in the nine ~~first~~months ~~half~~ of 2015. The tax rates in 2016 have decreased primarily due to a lower state tax rate including the resolution of a state income tax matter during the second quarter. For 2016, we expect an effective tax rate of approximately 34.0% prior to any year-end mark-to-market accounting adjustment for defined benefit pension and postretirement healthcare plans (“MTM Adjustment”). The actual rate, however, will depend on a number of factors, including the amount and source of operating income, ~~and~~ the impact of the MTM Adjustment and when the proposed TNT Express N.V. acquisition is completed.

We are subject to taxation in the United States and various U.S. state, local and foreign jurisdictions. During Wethe ~~are~~third ~~currently~~quarter, ~~under~~we ~~examination~~closed by the Internal Revenue Service examination for the 2012 and 2013 tax years. It The isconclusion ~~reasonably~~of ~~possible that certain income tax return proceedings will be completed during~~ the ~~next~~audit ~~twelve~~had ~~months~~an immaterial ~~and~~impact ~~could~~to ~~result in a change in~~ our balance of unrecognized tax benefits. ~~The expected impact of any changes would not be material to our consolidated financial statements.~~ As of ~~November~~February 3029, ~~2015~~2016, there were no material changes to our liabilities for unrecognized tax benefits from May 31, 2015.

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RECENT ACCOUNTING GUIDANCE

New accounting rules and disclosure requirements can significantly impact our reported results and the comparability of our financial statements.

~~During~~In the second quarter of 2016, we chose to early adopt the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) requiring acquirers in a business combination to ~~recognize~~ recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period that the adjustment amounts are determined and eliminates the requirement to retrospectively account for these adjustments. It also requires additional disclosure about the effects of the adjustments on prior periods. Adoption of this guidance had no impact on our financial reporting. See the “Business Acquisitions” section above for further discussion regarding our recent business acquisitions.

On ~~November~~February 1125, ~~2015~~2016, the FASB ~~voted~~issued the new lease accounting standard which requires lessees to ~~proceed~~put most ~~with~~leases on their balance sheets but recognize the ~~new~~ ~~lease~~expenses ~~accounting~~on their income statements in a manner similar to current practice. The new standard states that a lessee will ~~require~~recognize ~~companies~~a lease liability for the obligation to ~~include~~make lease payments and a right-of-use asset ~~and~~for athe ~~liability~~right to ~~make~~use ~~lease~~the ~~payments~~underlying onasset for the ~~balance~~lease ~~sheet~~term. Expense ~~for~~related ~~all~~to leases ~~(except~~determined ~~short-term~~to be operating leases). ~~This~~will ~~new~~be ~~standard~~recognized on a straight-line basis, while those determined to be financing leases will be ~~have~~recognized following a ~~significant~~front-loaded expense profile in which interest and amortization are presented separately in the income statement. We are currently evaluating the impact of this new standard on our ~~accounting~~ ~~and~~ financial reporting, but recognizing the lease liability and related right-of-use asset will significantly impact our balance sheet. These changes will be effective for our fiscal year ~~ending~~beginning ~~May~~June 311, 2019 (fiscal 2020.), with a modified retrospective adoption method to the beginning of 2018.

On November 20, 2015, the FASB issued an Accounting Standards Update that will require companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This new guidance will have minimal impact on our accounting and financial reporting, and ~~will~~we beplan ~~effective~~to early ~~for~~adopt ~~our~~on ~~fiscal~~a ~~year~~retrospective ~~ending~~basis ~~May 31,~~in ~~2018~~the fourth quarter of 2016.

We believe that no other new accounting guidance was adopted or issued during the ~~first~~nine ~~half~~months of 2016 that is relevant to the readers of our financial statements.

FORWARD-LOOKING STATEMENTS

Certain statements in this report 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;

•

damage to our reputation or loss of brand equity;

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•

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

•

the price and availability of jet and vehicle fuel;

•

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

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•

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;

• FedEx’s and our ability to successfully execute the TNT Express N.V. acquisition on favorable terms, on a timely basis or at all;

•

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

•

our ability to execute on our profit improvement programs;

•

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 new domestic or international government laws and regulation, including regulatory actions affecting global aviation or other transportation rights, increased air cargo and other security or safety requirements, and tax, accounting, trade (such as protectionist measures enacted in response to weak economic conditions), labor (such as card-check legislation or changes to the Railway Labor Act of 1926, as amended, affecting our employees), environmental (such as global climate change legislation) or postal rules;

•

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

• any impact on our business from disruptions or modifications in service by the United States Postal Service ~~(“USPS”)~~, which is a significant customer and vendor of ours;

•

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

•

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

•

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

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•

market acceptance of our new service and growth initiatives;

•

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

•

the outcome of future negotiations to reach new collective bargaining agreements — including with the union that represents our pilots;

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•

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 FedEx and FedEx’s ability to maintain its current credit ratings, especially given the capital intensity of our operations; and

•

other risks and uncertainties you can find in FedEx’s and our press releases and Securities and Exchange Commission 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

Omitted under the reduced disclosure format permitted by General Instruction H(2)(c) of Form 10-Q.

Item 4.

Controls and Procedures

Our management, 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 Securities and Exchange Commission’s rules and forms, including ensuring that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officers have concluded that such disclosure controls and procedures were effective as of ~~November~~February 3029, ~~2015~~2016 (the end of the period covered by this Quarterly Report on Form 10-Q).

During our fiscal quarter ended ~~November~~February 3029, ~~2015~~2016, 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 5 of the accompanying unaudited condensed consolidated financial statements.

Item 1A.

Risk Factors

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

Item 5.

Other Information

FedEx Acquisition B.V. was incorporated to complete the purchase of all the outstanding shares of TNT Express N.V. (“TNT Express”) in connection with FedEx’s conditional agreement to acquire TNT Express. Effective March 11, 2016, FedEx Acquisition B.V. became an indirect wholly owned subsidiary of FedEx Express. Following the closing of the TNT Express acquisition, we anticipate integrating the TNT Express operations with the FedEx Express network. This acquisition is expected to expand our global portfolio, particularly in Europe, lower our costs to serve European markets by increasing density in our pickup-and-delivery operations and accelerate our global growth.

Item 6.

Exhibits

ExhibitNumber		Description of Exhibit
10.1		Amendment dated September 15, 2015 (but effective as of June 29, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
2.1		Merger Protocol, dated as of April 6, 2015, between FedEx Corporation and TNT Express N.V. (Filed as Exhibit 2.1 to FedEx’s Current Report on Form 8-K dated April 6, 2015 and filed April 9, 2015, and incorporated herein by reference.)
10.2		Amendment dated September 1, 2015, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. (Filed as Exhibit 10.2 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
2.2		Irrevocable Undertaking, dated as of April 6, 2015, between FedEx and PostNL N.V. (Filed as Exhibit 2.2 to FedEx’s Current Report on Form 8-K dated April 6, 2015 and filed April 9, 2015, and incorporated herein by reference.)
10.3		Amendment dated October 15, 2015 (but effective as of March 30, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.3 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
2.3		Addendum to the Irrevocable Undertaking, dated as of August 14, 2015, between FedEx and PostNL N.V. (Filed as Exhibit 2.1 to FedEx’s FY16 First Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.4		Amendment dated November 9, 2015 (but effective as of January 4, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.4 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.1		Amendment dated January 12, 2016, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.5		Amendment dated November 9, 2015 (but effective as of January 4, 2016), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.5 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.2		Amendment dated January 28, 2016, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.2 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.6		Five-Year Credit Agreement dated as of November 13, 2015, among FedEx Corporation, JPMorgan Chase Bank, N.A., individually and as administrative agent, and certain lenders. (Filed as Exhibit 99.1 to FedEx Corporation’s Current Report on Form 8-K dated November 13, 2015 and filed November 18, 2015, and incorporated herein by reference.)
10.3		Amendment dated January 28, 2016, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.3 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.4		Amendment dated January 29, 2016 (but effective as of January 31, 2016), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.4 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)

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10.5		Amendment dated February 11, 2016, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.5 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)

10.6		Amendment dated February 16, 2016 (but effective as of August 31, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.6 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)

10.7		Amendment dated February 11, 2016 (but effective as of February 10, 2016), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. (Filed as Exhibit 10.7 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)

10.8		Amendment dated February 29, 2016 (but effective as of September 28, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.8 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)

12.1		Computation of Ratio of Earnings to Fixed Charges.

15.1		Letter re: Unaudited Interim Financial Statements.

31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1		Interactive Data Files.

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12.1		Computation of Ratio of Earnings to Fixed Charges.
15.1		Letter re: Unaudited Interim Financial Statements.
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1		Interactive Data Files.

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SIGNATURE

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

						FEDERAL EXPRESS CORPORATION
Date: December 17, 2015						/s/ ELISE L. JORDAN
Date: March 17, 2016						/s/ ELISE L. JORDAN
						ELISE L. JORDAN
						SENIOR VICE PRESIDENT AND
						CHIEF FINANCIAL OFFICER

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EXHIBIT INDEX

Exhibit Number		Description of Exhibit
10.1		Amendment dated September 15, 2015 (but effective as of June 29, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
2.1		Merger Protocol, dated as of April 6, 2015, between FedEx Corporation and TNT Express N.V. (Filed as Exhibit 2.1 to FedEx’s Current Report on Form 8-K dated April 6, 2015 and filed April 9, 2015, and incorporated herein by reference.)
10.2		Amendment dated September 1, 2015, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. (Filed as Exhibit 10.2 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
2.2		Irrevocable Undertaking, dated as of April 6, 2015, between FedEx and PostNL N.V. (Filed as Exhibit 2.2 to FedEx’s Current Report on Form 8-K dated April 6, 2015 and filed April 9, 2015, and incorporated herein by reference.)
10.3		Amendment dated October 15, 2015 (but effective as of March 30, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.3 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
2.3		Addendum to the Irrevocable Undertaking, dated as of August 14, 2015, between FedEx and PostNL N.V. (Filed as Exhibit 2.1 to FedEx’s FY16 First Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.4		Amendment dated November 9, 2015 (but effective as of January 4, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.4 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.1		Amendment dated January 12, 2016, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.5		Amendment dated November 9, 2015 (but effective as of January 4, 2016), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.5 to FedEx Corporation’s FY16 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.2		Amendment dated January 28, 2016, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.2 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.6		Five-Year Credit Agreement dated as of November 13, 2015, among FedEx Corporation, JPMorgan Chase Bank, N.A., individually and as administrative agent, and certain lenders. (Filed as Exhibit 99.1 to FedEx Corporation’s Current Report on Form 8-K dated November 13, 2015 and filed November 18, 2015, and incorporated herein by reference.)
10.3		Amendment dated January 28, 2016, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.3 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
12.1		Computation of Ratio of Earnings to Fixed Charges.
10.4		Amendment dated January 29, 2016 (but effective as of January 31, 2016), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.4 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
15.1		Letter re: Unaudited Interim Financial Statements.
10.5		Amendment dated February 11, 2016, amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.5 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
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.
10.6		Amendment dated February 16, 2016 (but effective as of August 31, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.6 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.7		Amendment dated February 11, 2016 (but effective as of February 10, 2016), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. (Filed as Exhibit 10.7 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)

E-1

Exhibit Number		Description of Exhibit
10.8		Amendment dated February 29, 2016 (but effective as of September 28, 2015), amending the Transportation Agreement dated April 23, 2013 between the United States Postal Service and Federal Express Corporation. Confidential treatment has been requested for confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.8 to FedEx Corporation’s FY16 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)
12.1		Computation of Ratio of Earnings to Fixed Charges.
15.1		Letter re: Unaudited Interim Financial Statements.
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1		Interactive Data Files.

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