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 ~~August~~November 3130, 2015 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 ~~September~~December 16, 2015 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

			PAGE
PART I. FINANCIAL INFORMATION
			PAGE
ITEM 1. Financial Statements
Condensed Consolidated Balance SheetsAugust 31, 2015 and May 31, 2015			3
Condensed Consolidated Balance SheetsNovember 30, 2015 and May 31, 2015			3
Condensed Consolidated Statements of IncomeThree Months Ended August 31, 2015 and 2014			5
Condensed Consolidated Statements of IncomeThree and Six Months Ended November 30, 2015 and 2014			5
Condensed Consolidated Statements of Comprehensive IncomeThree Months Ended August 31, 2015 and 2014			6
Condensed Consolidated Statements of Comprehensive IncomeThree and Six Months Ended November 30, 2015 and 2014			6
Condensed Consolidated Statements of Cash FlowsThree Months Ended August 31, 2015 and 2014			7
Condensed Consolidated Statements of Cash FlowsSix Months Ended November 30, 2015 and 2014			7
Notes to Condensed Consolidated Financial Statements			8
Report of Independent Registered Public Accounting Firm			1314
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition			1415
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			2224
ITEM 4. Controls and Procedures			2224
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings			2325
ITEM 1A. Risk Factors			2325
ITEM 6. Exhibits			2325
Signature			2427
Exhibit Index			E-1
Exhibit 12.1
Exhibit 15.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 Instance Document
Ex-101 Instance Document
EX-101 Schema Document
Ex-101 Schema Document
EX-101 Calculation Linkbase Document
Ex-101 Calculation Linkbase Document
EX-101 Presentation Linkbase Document
Ex-101 Presentation Linkbase Document
EX-101 Definition Linkbase Document
Ex-101 Definition Linkbase Document

-2-

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

	August 31,2015(Unaudited)		May 31,2015
	November 30,2015(Unaudited)		May 31,2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	~~823~~922	$	884
Receivables, less allowances of $84 and $92		1,512		1,549
Receivables, less allowances of $82 and $92		1,493		1,549
Spare parts, supplies and fuel, less allowances of $209 and $204		386		394
Spare parts, supplies and fuel, less allowances of $210 and $204		381		394
Deferred income taxes		~~378~~382		378
Due from parent company and other FedEx subsidiaries		~~579~~534		501
Prepaid expenses and other		~~132~~121		108
Total current assets		3,~~810~~833		3,814
PROPERTY AND EQUIPMENT, AT COST		27,~~095~~747		26,286
Less accumulated depreciation and amortization		12,~~674~~896		12,392
Net property and equipment		14,~~421~~851		13,894
OTHER LONG-TERM ASSETS
Goodwill		1,~~393~~383		1,448
Other assets		~~963~~893		1,104
Total other long-term assets		2,~~356~~276		2,552
	$	20,~~587~~960	$	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)

	August 31,2015(Unaudited)			May 31,2015
	November 30,2015(Unaudited)			May 31,2015
LIABILITIES AND OWNER’S EQUITY
CURRENT LIABILITIES
Current portion of long-term debt	$	5		$	7
Accrued salaries and employee benefits		~~977~~1,078			1,014
Accounts payable		1,~~148~~182			1,257
Accrued expenses		~~981~~975			1,056
Due to other FedEx subsidiaries		21,~~201~~998			1,932
Total current liabilities		5,~~312~~238			5,266
LONG-TERM DEBT, LESS CURRENT PORTION		239			239
OTHER LONG-TERM LIABILITIES
Deferred income taxes		1,~~717~~703			1,712
Pension, postretirement healthcare and other benefit obligations		1,~~267~~266			1,251
Self-insurance accruals		~~784~~800			711
Deferred lease obligations		~~614~~682			572
Deferred gains, principally related to aircraft transactions		~~171~~165			178
Other liabilities		93137			117
Total other long-term liabilities		4,~~646~~753			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,~~152~~522			9,839
Accumulated other comprehensive loss		(~~370~~400	)		(233	)
Total owner’s equity		10,~~390~~730			10,214
	$	20,~~587~~960		$	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 EndedAugust 31,
	Three Months EndedNovember 30,						Six Months EndedNovember 30,
	2015			2014			2015			2014
				(As Adjusted)						(As Adjusted)
REVENUES	$	6,~~312~~293		$	6,~~584~~715		$	12,605		$	13,299
OPERATING EXPENSES:
Salaries and employee benefits		2,~~433~~422			2,~~355~~399			4,855			4,754
Purchased transportation		~~419~~420			~~457~~465			839			922
Rentals and landing fees		~~403~~391			~~419~~416			794			835
Depreciation and amortization		~~344~~346			~~371~~365			690			736
Fuel		~~607~~517			~~970~~906			1,124			1,876
Maintenance and repairs		~~343~~329			~~377~~356			672			733
Intercompany charges, net		~~474~~490			~~475~~476			964			951
Other		~~788~~799			~~786~~843			1,587			1,629
		5,811			6,210
		5,714			6,226			11,525			12,436
OPERATING INCOME		~~501~~579			~~374~~489			1,080			863
OTHER INCOME (EXPENSE):
Interest, net		94			35			13			8
Other, net		(3648	)		(3225	)		(84	)		(57	)
		(27	)		(29	)
		(44	)		(20	)		(71	)		(49	)
INCOME BEFORE INCOME TAXES		~~474~~535			~~345~~469			1,009			814
PROVISION FOR INCOME TAXES		~~162~~165			~~120~~165			327			285
NET INCOME	$	~~312~~370		$	~~225~~304		$	682		$	529

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

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FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN MILLIONS)

	Three Months EndedAugust 31,
	Three Months EndedNovember 30,						Six Months EndedNovember 30,
	2015			2014			2015			2014
				(As Adjusted)						(As Adjusted)
NET INCOME	$	~~312~~370		$	~~225~~304		$	682		$	529
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax of $10 in 2015 and $8 in 2014		(131	)		(29	)
Foreign currency translation adjustments, net of tax of $2, $11, $12 and $19		(30	)		(119	)		(161	)		(148	)
Amortization of prior service credit and other, net of tax of $3 in 2015 and $0 in 2014		(6	)		(1	)
Amortization of prior service credit, net of tax of $0, $1, $3 and $1		—			—			(6	)		(1	)
		(137	)		(30	)
		(30	)		(119	)		(167	)		(149	)
COMPREHENSIVE INCOME	$	~~175~~340		$	~~195~~185		$	515		$	380

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)

	Three Months EndedAugust 31,
	Six Months EndedNovember 30,
	2015			2014
				(As Adjusted)
Operating Activities:
Net income	$	~~312~~682		$	~~225~~529
Noncash charges:
Depreciation and amortization		~~344~~690			~~371~~736
Other, net		3941			(34	)
Changes in assets and liabilities, net		96171			(~~162~~150	)
Cash provided by operating activities		~~791~~1,584			~~431~~1,119
Investing Activities:
Capital expenditures		(~~832~~1,513	)		(~~466~~1,079	)
Other		12			24
Cash used in investing activities		(~~820~~1,501	)		(~~464~~1,075	)
Effect of exchange rate changes on cash		(32	)		(15	)
Financing Activities:
Net decrease in cash and cash equivalents		(61	)		(48	)
Principal payments on debt		(2	)		—
Cash used in financing activities		(2	)		—
Effect of exchange rate changes on cash		(43	)		(54	)
Net increase (decrease) in cash and cash equivalents		38			(10	)
Cash and cash equivalents at beginning of period		884			858
Cash and cash equivalents at end of period	$	~~823~~922		$	~~810~~848

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 ~~August~~November 3130, 2015, ~~and~~ the results of our operations for the three- and six-month periods ended November 30, 2015 and 2014 and cash flows for the ~~three~~ six-month periods ended ~~August~~November 3130, 2015 and 2014. Operating results for the three- and six-month ~~period~~periods ended ~~August~~November 3130, 2015 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 ~~contract~~new ~~became~~CBA ~~amendable~~was inratified ~~March~~by ~~2013. After~~our ~~participating~~pilots in ~~negotiations assisted by the National Mediation Board (“NMB”), the parties reached~~ a ~~Tentative Agreement~~vote ~~(“TA”)~~concluded on ~~August~~ October 1920, 2015~~. The~~, TAand is ~~currently~~the ~~out~~product ~~for~~of a32 ~~membership~~months ~~ratification~~of ~~vote~~bargaining ~~which~~under ~~will~~the ~~close~~Railway inLabor ~~mid-October. If~~Act ~~the~~of ~~TA is ratified~~1926, itas ~~will~~amended ~~become effective November 2~~(“RLA”), ~~2015~~the ~~and~~last ~~will~~10 ~~become~~months ~~amendable in~~of ~~November~~which ~~2021. If~~were ~~the~~mediated TAby ~~is not ratified,~~ the ~~parties~~National ~~will~~Mediation ~~reenter~~Board ~~NMB mediated negotiations. The NMB is~~ (the U.S. governmental agency that oversees labor agreements for entities covered by the ~~Railway~~RLA). ~~Labor~~The ~~Act~~new ofCBA ~~1926~~took effect November 2, as2015, ~~amended~~and 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 key terms of the stock option and restricted stock awards granted under FedEx’s incentive stock plans are set forth in FedEx’s Annual Report.

Our stock-based compensation expense was $1611 million for the three-month ~~months~~period ended ~~August~~November 3130, 2015 and $28 million for the six-month period ended November 30, 2015. Our stock-based compensation expense was $10 million for the three-month period ended November 30, 2014 and $26 million for the six-month period ended November 30, 2014. 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 ~~August~~November 3130, 2015 and May 31, 2015, compared with an estimated fair value of $~~320~~312 million at ~~August~~November 3130, 2015 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.

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.

-8-

WeRECENT ~~believe~~ACCOUNTING ~~that~~GUIDANCE. noNew ~~other new~~ accounting ~~guidance~~rules ~~was~~and ~~adopted~~disclosure orrequirements ~~issued~~can ~~during~~significantly ~~the first three months of 2016~~impact ~~that~~our isreported ~~relevant~~results toand the ~~readers~~comparability of our financial statements. ~~However,~~These ~~there~~matters are ~~numerous~~described ~~new~~in ~~proposals under development which, if and when enacted, may have a significant impact on~~ our ~~financial~~Annual ~~reporting~~Report.

~~(2)~~During ~~Accumulated~~the quarter, ~~Other~~we ~~Comprehensive~~chose to early adopt the authoritative guidance issued by the Financial Accounting Standards Board (~~Loss~~“FASB”) ~~Income~~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.

~~The~~On ~~following~~November 11, ~~table~~2015, ~~provides~~the ~~changes~~FASB invoted ~~accumulated~~to ~~other~~proceed ~~comprehensive~~with ~~(loss)~~the ~~income~~new ~~(“AOCI”),~~lease ~~net~~accounting ofstandard ~~tax,~~that ~~reported~~will ~~in our~~require ~~condensed~~companies ~~consolidated~~to ~~financial~~include ~~statements~~a ~~for~~right-of-use ~~the~~asset ~~three-month~~and ~~periods~~a ~~ended~~liability ~~August 31~~to ~~(in~~make ~~millions;~~lease ~~amounts~~payments inon ~~parentheses~~the ~~indicate~~balance ~~debits~~sheet tofor ~~AOCI~~all leases (except short-term leases). ~~and~~This ~~amounts~~new ~~have~~standard ~~been~~will ~~recast~~have toa ~~conform~~significant toimpact ~~pension~~on our accounting ~~changes~~and ~~further~~financial ~~discussed~~reporting inand ~~our~~will be ~~Annual~~effective ~~Report:~~for our fiscal year ending May 31, 2020.

	2015			2014
Foreign currency translation gain (loss):
Balance at beginning of period	$	(250	)	$	71
Translation adjustments		(131	)		(29	)
Balance at end of period		(381	)		42
Retirement plans adjustments:
Balance at beginning of period		17			22
Reclassifications from AOCI		(6	)		(1	)
Balance at end of period		11			21
Accumulated other comprehensive (loss) income at end of period	$	(370	)	$	63

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 be effective for our fiscal year ending May 31, 2018.

We believe that no other new accounting guidance was adopted or issued during the first half 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 consolidated financial statements for the periods ended November 30 (in millions; amounts in parentheses indicate debits to AOCI):


	Three Months Ended						Six Months Ended
	2015			2014			2015			2014
Foreign currency translation gain (loss):
Balance at beginning of period	$	(381	)	$	42		$	(250	)	$	71
Translation adjustments		(30	)		(119	)		(161	)		(148	)

Balance at end of period		(411	)		(77	)		(411	)		(77	)

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	)	$	(56	)	$	(400	)	$	(56	)

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

(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, 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. Prior year amounts have been recast to conform to pension accounting changes. For more information, refer to the financial statements of FedEx included in its Form 10-Q for the quarter ended August 31, 2015 and in our Annual Report.

Our retirement plans costs for the three-month periods ended August 31 were as follows (in millions):

	2015		2014
Pension plans sponsored by FedEx	$	16	$	19
Defined benefit pension plans		11		11
Defined contribution plans		64		61
Postretirement healthcare plans		16		16
	$	107	$	107

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 quarter of 2016 or 2015 to pension plans sponsored by us, and we do not expect to make material contributions in 2016.

-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 30, 2015 and in our Annual Report.

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


	Three Months Ended				Six Months Ended
	2015		2014		2015		2014
Pension plans sponsored by FedEx	$	15	$	20	$	31	$	39
Defined benefit pension plans		12		10		23		21
Defined contribution plans		64		60		128		121
Postretirement healthcare plans		15		15		31		31

	$	106	$	105	$	213	$	212

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 half 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 ~~August~~November 3130, 2015, our purchase commitments under various contracts for the remainder of 2016 and annually thereafter were as as follows (in millions):

	Aircraft andAircraft Related		Other(1)		Total
	Aircraft andAircraft-Related		Other(1)		Total
2016 (remainder)	$	~~657~~228	$	6052	$	~~717~~280
2017		1,~~240~~286		4345		1,~~283~~331
2018		1,~~739~~755		3840		1,~~777~~795
2019		1,~~584~~575		1011		1,~~594~~586
2020		1,~~638~~646		98		1,~~647~~654
Thereafter		5,~~962~~867		7273		65,~~034~~940
Total	$	12,~~820~~357	$	~~232~~229	$	1312,~~052~~586

⁽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 ~~August~~November 3130, 2015, our obligation to purchase six Boeing 767-300 Freighter (“B767F”) aircraft and nine Boeing 777 Freighter (“B777F”) aircraft is conditioned upon there being no event that causes us or our employees not to be covered by the ~~Railway Labor Act of 1926, as amended~~RLA. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

On July 21, 2015, we entered into a supplemental agreement to purchase 50 additional B767F aircraft from Boeing. Four of the 50 additional B767F aircraft purchases are conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act of 1926, as amended. The 50 additional B767F aircraft are expected to be delivered from fiscal 2018 through fiscal 2023 and will enable us to continue to improve the efficiency and reliability of our aircraft fleet.

We had $411 million in deposits and progress payments as of August 31, 2015 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 August 31, 2015 with the year of expected delivery:

	B767F		B777F		Total
2016 (remainder)		6		1		7
2017		12		—		12
2018		16		2		18
2019		13		2		15
2020		12		3		15
Thereafter		26		9		35
Total		85		17		102

-10-

AWe ~~summary~~had of$326 ~~future~~million ~~minimum~~in ~~lease~~deposits ~~payments~~and ~~under~~progress ~~noncancelable~~payments ~~operating~~as ~~leases~~of ~~with~~November 30, an2015 ~~initial~~on oraircraft ~~remaining~~purchases and ~~term~~other planned aircraft-related transactions. These deposits are classified in ~~excess~~the “Other assets” caption of ~~one~~our ~~year~~consolidated atbalance ~~August~~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 3130, 2015 iswith asthe ~~follows~~year ~~(in~~of ~~millions)~~expected delivery:

	Operating Leases
	B767F		B777F		Total
	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2016 (remainder)		2		—		2
2016 (remainder)	$	430	$	502	$	932
2017		12		—		12
2017		403		860		1,263
2018		16		2		18
2018		332		545		877
2019		13		2		15
2019		274		467		741
2020		12		3		15
2020		190		402		592
Thereafter		26		9		35
Thereafter		360		3,241		3,601
Total		81		16		97
Total	$	1,989	$	6,017	$	8,006

~~Future~~A summary of future minimum lease payments under ~~capital~~noncancelable operating leases ~~were~~with ~~immaterial~~an atinitial ~~August 31,~~or ~~2015.~~remaining ~~While~~term ~~certain of our lease~~in ~~agreements~~excess ~~contain covenants governing the use~~ of ~~the~~one ~~leased~~year ~~assets~~at ~~or require us to maintain certain levels of insurance~~November 30, ~~none~~2015 ofis ~~our~~as ~~lease~~follows ~~agreements~~(in ~~include~~millions): ~~material financial covenants or limitations.~~


	Operating Leases
	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases
2016 (remainder)	$	393	$	339	$	732
2017		403		880		1,283
2018		332		563		895
2019		274		484		758
2020		190		418		608
Thereafter		360		3,263		3,623

Total	$	1,952	$	5,947	$	7,899

Future minimum lease payments under capital leases were immaterial at November 30, 2015. 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.

Accordingly, we will vigorously defend ourselves in this matter. If we are convicted, remedies could include fines, penalties, forfeiture and compliance conditions. Given the early 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 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 TATEX prior to our acquisition of that company in July 2012. In September 2014, FedEx Express France submitted its observations

-11-

inAccordingly, ~~response~~we towill ~~the~~vigorously ~~Statement~~defend ofourselves ~~Objections~~in tothis ~~the FCA~~matter. InIf ~~April~~we ~~2015~~are convicted, ~~the~~remedies ~~FCA~~could ~~issued~~include fines, apenalties, ~~report~~forfeiture ~~responding~~and tocompliance ~~the observations submitted by all companies involved in the investigation~~conditions. WeGiven ~~submitted an answer to~~ the ~~FCA’s~~stage ~~report~~of ~~in early July. A hearing in~~ this ~~matter~~proceeding, ~~before~~we ~~the~~cannot ~~Board~~estimate of the ~~FCA~~amount ~~has~~or ~~been~~range ~~set~~of ~~for September 30~~loss, ~~2015.~~if ~~Loss~~any; inhowever, ~~this~~it ~~matter~~ is ~~probable,~~reasonably ~~and~~possible inthat ~~the~~it ~~fourth~~could ~~quarter~~be ofmaterial ~~2015~~if we ~~established~~are ~~an accrual for the estimated probable loss~~convicted. ~~This amount was immaterial.~~

Other Matters. On June 30, 2014, we received a Statement of Objections from the French Competition Authority (“FCA”) addressed 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 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 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 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 analyzing the decision and are considering the possibility of an appeal. Based on the amount previously accrued and available indemnification, no adjustment to the accrued amount is necessary at this time.

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 ~~August~~November 3130, 2015 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.

(7) Supplemental Cash Flow Information

Cash paid for interest expense and income taxes for the three-month periods ended August 31 was as follows (in millions):

	2015			2014
Cash payments for:
Interest (net of capitalized interest)	$	—		$	4
Income taxes	$	169		$	131
Income tax refunds received		(2	)		(1	)
Cash tax payments, net	$	167		$	130

-12-

(7) Supplemental Cash Flow Information

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


	2015			2014
Cash payments for:
Income taxes	$	401		$	295
Income tax refunds received		(3	)		(3	)

Cash tax payments, net	$	398		$	292

-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 ~~August~~November 3130, 2015, and the related condensed consolidated statements of income, and comprehensive income for the three-month and six-month periods ended November 30, 2015 and 2014 and the condensed consolidated statements of cash flows for the ~~three~~six-month periods ended ~~August~~November 3130, 2015 and 2014. 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 ~~income~~loss, changes in owner’s equity, and cash flows for the year then ended, not presented herein, and ~~in our report dated July 14, 2015,~~ we expressed an unqualified audit opinion on those consolidated financial statements. Inin our ~~opinion,~~report ~~the~~dated ~~information~~July 14, 2015. ~~set~~In ~~forth~~our inopinion, 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

~~September~~December 17, 2015

-1314-

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 ~~August~~ November 3130, 2015.

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 ~~offset~~recover ~~these~~incremental ~~fluctuations~~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.

-1415-

-1516-

RESULTS OF OPERATIONS

~~FedEx~~We ~~Express~~offer ~~offers~~ 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 ~~table~~tables ~~compares~~compare revenues, operating expenses, operating expenses as a percent of revenue, operating income, net income and operating margin (dollars in millions) ~~and operating margin~~ for the ~~three-month~~ periods ended ~~August~~November 3130 and amounts have been recast to conform to pension accounting changes further discussed in our Annual Report:

	2015			2014			PercentChange
	Three Months Ended						Percent			Six Months Ended						Percent
Revenues:
	2015			2014			Change			2015			2014			Change
Package:
Revenues:
U.S. overnight box	$	1,658		$	1,682			(1	)
Package:
U.S. overnight envelope		422			415			2
U.S. overnight box	$	1,682		$	1,705			(1	)	$	3,340		$	3,387			(1	)
U.S. deferred		816			795			3
U.S. overnight envelope		397			400			(1	)		819			815			—
Total U.S. domestic package revenue		2,896			2,892			—
U.S. deferred		826			834			(1	)		1,642			1,629			1
International priority		1,464			1,630			(10	)
Total U.S. domestic package revenue		2,905			2,939			(1	)		5,801			5,831			(1	)
International economy		574			571			1
International priority		1,433			1,649			(13	)		2,897			3,279			(12	)
Total international export package revenue		2,038			2,201			(7	)
International economy		568			598			(5	)		1,142			1,169			(2	)
International domestic(1)		327			371			(12	)
Total international export package revenue		2,001			2,247			(11	)		4,039			4,448			(9	)
Total package revenue		5,261			5,464			(4	)
International domestic(1)		336			383			(12	)		663			754			(12	)
Freight:
Total package revenue		5,242			5,569			(6	)		10,503			11,033			(5	)
U.S.		573			579			(1	)
Freight:
International priority		350			395			(11	)
U.S.		578			586			(1	)		1,151			1,165			(1	)
International airfreight		36			46			(22	)
International priority		354			412			(14	)		704			807			(13	)
Total freight revenue		959			1,020			(6	)		Percent of Revenue
International airfreight		32			42			(24	)		68			88			(23	)
Other		92			100			(8	)		2015			2014
Total freight revenue		964			1,040			(7	)		1,923			2,060			(7	)
Total revenues		6,312			6,584			(4	)		100.0	%		100.0	%
Other		87			106			(18	)		179			206			(13	)
Operating expenses:
Total revenues		6,293			6,715			(6	)		12,605			13,299			(5	)
Salaries and employee benefits		2,433			2,355			3			38.6			35.8
Operating expenses:
Purchased transportation		419			457			(8	)		6.6			7.0
Salaries and employee benefits		2,422			2,399			1			4,855			4,754			2
Rentals and landing fees		403			419			(4	)		6.4			6.4
Purchased transportation		420			465			(10	)		839			922			(9	)
Depreciation and amortization		344			371			(7	)		5.5			5.6
Rentals and landing fees		391			416			(6	)		794			835			(5	)
Fuel		607			970			(37	)		9.6			14.7
Depreciation and amortization		346			365			(5	)		690			736			(6	)
Maintenance and repairs		343			377			(9	)		5.4			5.7
Fuel		517			906			(43	)		1,124			1,876			(40	)
Intercompany charges		474			475			—			7.5			7.2
Maintenance and repairs		329			356			(8	)		672			733			(8	)
Other		788			786			—			12.5			11.9
Intercompany charges		490			476			3			964			951			1
Total operating expenses		5,811			6,210			(6	)		92.1	%		94.3	%
Other		799			843			(5	)		1,587			1,629			(3	)
Operating income	$	501		$	374			34
Total operating expenses		5,714			6,226			(8	)		11,525			12,436			(7	)
Operating margin		7.9	%		5.7	%		220	bp
Operating income	$	579		$	489			18		$	1,080		$	863			25
Other income (expense):
Operating margin		9.2	%		7.3	%		190	bp		8.6	%		6.5	%		210	bp
Interest, net		9			3			NM
Other income (expense):
Other, net		(36	)		(32	)		NM
Interest, net		4			5			(20	)		13			8			63
		(27	)		(29	)		NM
Other, net		(48	)		(25	)		92			(84	)		(57	)		47
Income before income taxes		474			345			37
		(44	)		(20	)		120			(71	)		(49	)		45
Provision for income taxes		162			120			35
Income before income taxes		535			469			14			1,009			814			24
Net income	$	312		$	225			39
Provision for income taxes		165			165			—			327			285			15
Net income	$	370		$	304			22		$	682		$	529			29

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

-1617-

The following table compares selected statistics (in thousands, except yield amounts) for the three-month periods ended August 31:


	Percent of Revenue
	Three Months Ended						Six Months Ended
	2015			2014			2015			2014
Operating expenses:
Salaries and employee benefits		38.5	%		35.7	%		38.5	%		35.7	%
Purchased transportation		6.7			6.9			6.7			6.9
Rentals and landing fees		6.2			6.2			6.3			6.3
Depreciation and amortization		5.5			5.4			5.5			5.5
Fuel		8.2			13.5			8.9			14.1
Maintenance and repairs		5.2			5.3			5.3			5.5
Intercompany charges		7.8			7.1			7.6			7.2
Other		12.7			12.6			12.6			12.3

Total operating expenses		90.8			92.7			91.4			93.5

Operating margin		9.2	%		7.3	%		8.6	%		6.5	%

	2015		2014		PercentChange
Package Statistics
Average daily package volume (ADV):
U.S. overnight box		1,210		1,211		—
U.S. overnight envelope		541		527		3
U.S. deferred		865		846		2
Total U.S. domestic ADV		2,616		2,584		1
International priority		389		409		(5	)
International economy		176		170		4
Total international export ADV		565		579		(2	)
International domestic(1)		855		816		5
Total ADV		4,036		3,979		1
Revenue per package (yield):
U.S. overnight box	$	21.08	$	21.69		(3	)
U.S. overnight envelope		11.99		12.32		(3	)
U.S. deferred		14.52		14.68		(1	)
U.S. domestic composite		17.03		17.49		(3	)
International priority		57.86		62.19		(7	)
International economy		50.18		52.60		(5	)
International export composite		55.47		59.38		(7	)
International domestic(1)		5.88		7.10		(17	)
Composite package yield		20.05		21.46		(7	)
Freight Statistics
Average daily freight pounds:
U.S.		7,278		7,318		(1	)
International priority		2,491		2,792		(11	)
International airfreight		609		670		(9	)
Total average daily freight pounds		10,378		10,780		(4	)
Revenue per pound (yield):
U.S.	$	1.21	$	1.24		(2	)
International priority		2.16		2.21		(2	)
International airfreight		0.92		1.07		(14	)
Composite freight yield		1.42		1.48		(4	)

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


	Three Months Ended				Percent			Six Months Ended				Percent
	2015		2014		Change			2015		2014		Change
Package Statistics
Average daily package volume (ADV):
U.S. overnight box		1,290		1,259		2			1,250		1,235		1
U.S. overnight envelope		531		521		2			536		524		2
U.S. deferred		900		915		(2	)		882		880		—

Total U.S. domestic ADV		2,721		2,695		1			2,668		2,639		1

International priority		402		424		(5	)		396		417		(5	)
International economy		186		180		3			181		175		3

Total international export ADV		588		604		(3	)		577		592		(3	)

International domestic⁽¹⁾		954		917		4			903		866		4

Total ADV		4,263		4,216		1			4,148		4,097		1

Revenue per package (yield):
U.S. overnight box	$	20.70	$	21.50		(4	)	$	20.89	$	21.59		(3	)
U.S. overnight envelope		11.87		12.15		(2	)		11.93		12.24		(3	)
U.S. deferred		14.55		14.48		—			14.54		14.58		—
U.S. domestic composite		16.94		17.31		(2	)		16.99		17.40		(2	)
International priority		56.52		61.64		(8	)		57.19		61.92		(8	)
International economy		48.53		52.88		(8	)		49.35		52.75		(6	)
International export composite		54.00		59.04		(9	)		54.73		59.21		(8	)
International domestic⁽¹⁾		5.59		6.63		(16	)		5.73		6.85		(16	)
Composite package yield		19.52		20.97		(7	)		19.78		21.21		(7	)
Freight Statistics
Average daily freight pounds:
U.S.		8,213		8,039		2			7,738		7,676		1
International priority		2,605		2,983		(13	)		2,547		2,887		(12	)
International airfreight		678		630		8			643		650		(1	)

Total average daily freight pounds		11,496		11,652		(1	)		10,928		11,213		(3	)

Revenue per pound (yield):
U.S.	$	1.12	$	1.16		(3	)	$	1.16	$	1.20		(3	)
International priority		2.16		2.19		(1	)		2.16		2.20		(2	)
International airfreight		0.75		1.07		(30	)		0.83		1.07		(22	)
Composite freight yield		1.33		1.42		(6	)		1.37		1.45		(6	)

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

~~Revenues~~ -18-

Our revenues decreased 4% in the first quarter of 2016 due to the negative impact of lower fuel surcharges and unfavorable exchange rates, which were partially offset by U.S. domestic base yield and volume growth and international export base yield growth. U.S. domestic average daily volumes increased 1% in the first quarter of 2016 driven by both our deferred and overnight service offerings. U.S. domestic yields decreased 3% in the first quarter of 2016 due to the negative impact of lower fuel surcharges, which were partially offset by higher base rates. International export yields decreased 7% in the first quarter of 2016 due to the negative impact of lower fuel surcharges and unfavorable exchange rates and were partially offset by higher base rates and higher weights. International domestic revenues declined 12% in the first quarter of 2016 due to the negative impact of unfavorable exchange rates, which were partially offset by a 5% volume increase. One additional operating day benefited revenues in the first quarter of 2016.

-17-

Revenues

Our revenues decreased 6% in the second quarter and 5% in the first half of 2016 primarily due to lower fuel surcharges and unfavorable exchange rates. These factors were partially offset by U.S. domestic and international export base yield growth. Revenues in the first half of 2016 also benefited from one additional operating day.

U.S. domestic yields decreased 2% in the second quarter and first half of 2016 due to the negative impact of lower fuel surcharges and were partially offset by higher base rates. U.S. domestic volumes increased 1% in the second quarter and first half of 2016 driven by our overnight service offerings. International export yields decreased 9% in the second quarter and 8% in the first half 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 6% in the second quarter and first half of 2016 due to lower fuel surcharges and unfavorable exchange rates, which were partially offset by higher base rates. Average daily freight pounds decreased 1% in the second quarter and 3% in the first half 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 ~~increased 34%~~ and operating margin ~~grew~~increased ~~220~~in ~~basis~~the ~~points~~second inquarter ~~the~~and first ~~quarter~~half of 2016, despite adeclining ~~4% revenue decline~~revenues. This increase was primarily driven by higher ~~international export and~~ U.S. domestic and international export base yield growth, ~~the benefit from one additional operating day~~ and lower international expenses due to currency exchange rates. ~~These~~Also, ~~factors~~operating ~~were~~income ~~partially~~and ~~offset~~operating bymargin ~~higher~~benefited ~~incentive~~from ~~compensation~~one ~~accruals~~additional operating day in the first half of 2016. Profit improvement program initiatives continued to improve revenue quality and constrain expenses for the ~~first~~second quarter and first half of 2016.

Salaries and employee benefits increased 31% in the ~~first~~second quarter and 2% in the first half of 2016 due to merit increases and higher incentive compensation accruals, which were partially offset by a favorable exchange rate impact. Maintenance and repairs expense decreased 98% in the ~~first~~second quarter and first half of 2016 due to the timing of prior year aircraft maintenance events. Aircraft retirements during 2015 ~~drove~~caused adepreciation 7%and amortization expense to decrease 5% in ~~depreciation~~the ~~and~~second ~~amortization~~quarter ~~expense~~and 6% in the first ~~quarter~~half of 2016. Purchased transportation and Other expenses decreased 8%in the second quarter and in the first ~~quarter~~half of 2016 driven by a favorable exchange rate impact.

Fuel

Fuel expense decreased 3743% in the ~~first~~second quarter and 40% in the first half 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 ~~first~~second quarter and first half 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 ~~August~~November 2015 was set based on ~~June~~September 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.

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.~~19-

We routinely review our fuel surcharges and our fuel surcharge methodology. On November 2, 2015, we will update certain tables used to determine our fuel surcharges.

The net impact of fuel had a minimal impact in the first quarter of 2016 on operating income. This was driven by decreased fuel prices during the first quarter of 2016 versus prior year, which was partially offset by the year-over-year decrease in fuel surcharge revenue during these periods.

-18-

~~The~~Because ~~net~~of ~~impact~~the offactors ~~fuel~~described onabove, our operating results ~~does not consider the effects that fuel surcharge levels~~ may ~~have~~ onbe ~~our~~affected ~~business,~~should ~~including changes in demand and shifts in~~ the ~~mix~~market price of fuel ~~services~~suddenly ~~purchased~~change by ~~our~~a ~~customers. While fluctuations in fuel surcharge percentages can be~~ significant ~~from~~amount ~~period~~or tochange ~~period,~~by ~~fuel~~amounts ~~surcharges~~that ~~represent~~do ~~one~~not ofresult ~~the~~in ~~many individual~~an ~~components~~adjustment ofin our ~~pricing~~fuel ~~structure that impact our overall revenue and yield. Additional components include the mix of services sold~~surcharges, ~~the~~which ~~base~~can ~~price~~significantly ~~and~~affect ~~extra~~our ~~service~~earnings ~~charges~~either wepositively ~~obtain~~or ~~for~~negatively ~~these~~in ~~services and~~ the ~~level of pricing discounts offered~~short-term. ~~Our U.S. domestic and outbound fuel surcharge and the international fuel surcharges ranged as follows for the periods ended August 31:~~

	2015			2014
U.S. Domestic and Outbound Fuel Surcharge:
Low		3.00	%		9.50	%
High		4.00			9.50
Weighted-average		3.34			9.50
International Fuel Surcharges:
Low		3.00			13.50
High		12.00			18.00
Weighted-average		8.82			16.26

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.

OnThe ~~September 15,~~net ~~2015,~~impact ~~FedEx~~of ~~Express~~fuel ~~announced~~had a ~~4.9%~~slightly ~~average~~negative ~~list~~impact ~~price~~in ~~increase~~the ~~for~~second ~~FedEx~~quarter ~~Express U.S. domestic, U.S. export~~ and ~~U.S.~~a ~~import~~minimal ~~services~~impact ~~effective~~in ~~January 4,~~the ~~2016.~~first Inhalf ~~addition,~~of ~~effective November 2, 2015, FedEx Express will update certain tables used~~ 2016 to ~~determine~~operating ~~its fuel surcharges~~income. OnThis ~~February 2,~~was ~~2015,~~driven ~~FedEx~~by ~~Express updated~~ the ~~tables~~ ~~used~~year-over-year todecrease ~~determine~~in fuel ~~surcharges.~~surcharge Onrevenue ~~September 16,~~during ~~2014,~~the ~~FedEx~~second ~~Express~~quarter ~~announced a 4.9% average list price increase for FedEx Express U.S. domestic, U.S. export~~ and ~~U.S.~~first ~~import~~half ~~services~~of ~~effective January 5~~2016, ~~2015.~~which Inwas ~~January~~partially ~~2014, we~~offset ~~implemented~~by adecreased ~~3.9%~~fuel ~~average~~prices ~~list~~during ~~price~~these ~~increase for FedEx Express U~~periods.S. ~~domestic, U.S. export and U.S. import services.~~

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 30:


	Three Months Ended						Six Months Ended
	2015			2014			2015			2014
U.S. Domestic and Outbound Fuel Surcharge:
Low		1.00	%		8.00	%		1.00	%		8.00	%
High		2.75			9.00			4.00			9.50
Weighted-average		1.89			8.69			2.61			9.09

International Fuel Surcharges:
Low		0.75			12.00			0.75			12.00
High		10.50			17.50			12.00			18.00
Weighted-average		6.58			15.59			7.69			15.92

On September 15, 2015, we announced a 4.9% average list price increase for our U.S. domestic, U.S. export and U.S. 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 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 3430.18% for the ~~first~~second quarter and 32.4% for the first half of 2016, compared with 35.2% in the second quarter and 3435.80% ~~for~~in the first ~~quarter~~half of 2015. The tax rates in 2016 have decreased primarily due to the resolution of a state income tax matter during the second quarter. For 2016, we expect an effective tax rate ~~between~~of ~~35.0%~~approximately ~~and 36~~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~~Adjustment.

We are subject to taxation in the United States and various U.S. state, local and foreign jurisdictions. We are currently under examination by the Internal Revenue Service for the 2012 and 2013 tax years. It is reasonably possible that certain income tax return proceedings will be completed during the next 12twelve months and could result in a change in our balance of unrecognized tax benefits. The expected impact of any changes would not be material to our consolidated financial statements. As of ~~August~~November 3130, 2015, there were no material changes to our liabilities for unrecognized tax benefits from May 31, 2015.

-20-

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.~~

WeDuring ~~believe~~the ~~that~~quarter, nowe ~~other~~chose ~~new~~to ~~accounting~~early ~~guidance~~adopt ~~was~~the ~~adopted~~authoritative orguidance issued ~~during~~ by the ~~first~~Financial ~~three~~Accounting ~~months~~Standards ofBoard ~~2016~~(“FASB”) ~~that~~requiring isacquirers ~~relevant~~in a business combination to recognize adjustments to provisional amounts that are identified during the ~~readers~~measurement ofperiod ~~our~~in ~~financial~~the ~~statements.~~reporting ~~However,~~period ~~there~~that the adjustment amounts are ~~numerous~~determined ~~new~~and ~~proposals~~eliminates ~~under~~the ~~development~~requirement ~~which,~~to ifretrospectively ~~and~~account ~~when~~for ~~enacted,~~these ~~may~~adjustments. ~~have~~It aalso ~~significant~~requires additional ~~impact~~disclosure onabout ~~our~~the ~~financial~~effects ~~reporting~~of the adjustments on prior periods.

On November 11, 2015, the FASB voted to proceed with the new lease accounting standard that will require companies to include a right-of-use asset and a liability to make lease payments on the balance sheet for all leases (except short-term leases). This new standard will have a significant impact on our accounting and financial reporting and will be effective for our fiscal year ending May 31, 2020.

We believe that no other new accounting guidance was adopted or issued during the first half 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,” “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;

-19-

•

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;

•

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;

~~• the impact of intense competition on our ability to maintain or increase our prices (including our fuel surcharges in response to fluctuating fuel price) or to maintain or grow our market share;~~-21-

•

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 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;

-20-

•

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;

•

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;

-22-

•

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.

-2123-

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 ~~August~~November 3130, 2015 (the end of the period covered by this Quarterly Report on Form 10-Q).

During our fiscal quarter ended ~~August~~November 3130, 2015, 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.

-2224-

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 6.

Exhibits

ExhibitNumber		Description of Exhibit
10.1		Amendment dated ~~June~~September 1215, 2015 (but effective as of ~~January~~June 529, 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 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.2		Amendment dated ~~June~~September 161, 2015 ~~(but effective as of February 2~~, ~~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 10.2 to FedEx Corporation’s FY16 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.3		Amendment dated ~~June~~October 2315, 2015 (but effective as of March 230, 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 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.4		Amendment dated ~~August~~November 319, 2015 (but effective as of January 4, ~~2016~~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 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.5		~~Supplemental~~Amendment ~~Agreement~~dated ~~No.~~November 69, 2015 (~~and~~but ~~related~~effective ~~side letters) dated~~ as of ~~July~~January 214, ~~2015~~2016), amending the ~~Boeing~~Transportation ~~767-3S2 Freighter Purchase~~ Agreement dated asApril ~~of December 14~~23, ~~2011,~~2013 between ~~The~~the ~~Boeing~~United ~~Company~~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 ~~and~~ Exchange Act of 1934, as amended. (Filed as Exhibit 10.5 to FedEx Corporation’s FY16 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
12.1		Computation of Ratio of Earnings to Fixed Charges.
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.)
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.

-2325-



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.

-26-

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: September 17, 2015						/s/ ELISE L. JORDAN
Date: December 17, 2015						/s/ ELISE L. JORDAN
						ELISE L. JORDAN
						SENIOR VICE PRESIDENT AND
						CHIEF FINANCIAL OFFICER

-2427-

EXHIBIT INDEX

Exhibit Number		Description of Exhibit
10.1		Amendment dated ~~June~~September 1215, 2015 (but effective as of ~~January~~June 529, 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 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.2		Amendment dated ~~June~~September 161, 2015 ~~(but effective as of February 2~~, ~~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 10.2 to FedEx Corporation’s FY16 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.3		Amendment dated ~~June~~October 2315, 2015 (but effective as of March 230, 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 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.4		Amendment dated ~~August~~November 319, 2015 (but effective as of January 4, ~~2016~~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 ~~First~~Second Quarter Report on Form 10-Q, and incorporated herein by reference.)
10.5		~~Supplemental~~Amendment ~~Agreement~~dated ~~No.~~November 69, 2015 (~~and~~but ~~related~~effective ~~side letters) dated~~ as of ~~July~~January 214, ~~2015~~2016), amending the ~~Boeing~~Transportation ~~767-3S2 Freighter Purchase~~ Agreement dated asApril ~~of December 14~~23, ~~2011,~~2013 between ~~The~~the ~~Boeing~~United ~~Company~~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 ~~and~~ Exchange Act of 1934, as amended. (Filed as Exhibit 10.5 to FedEx Corporation’s FY16 ~~First~~Second 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.)
12.1		Computation of Ratio of Earnings to Fixed Charges.
15.1		Letter re: Unaudited Interim Financial Statements.
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1		Interactive Data Files.

E-1



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

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

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

101.1		Interactive Data Files.

E-2

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Filing Compare · FEDERAL EXPRESS CORP