Exhibit 99.1

FOR IMMEDIATE RELEASE

FedEx Corp. Reports Fourth Quarter Earnings

Fiscal 2016 ‘a historic year of significant accomplishments’

MEMPHIS, Tenn., June 21, 2016 ... FedEx Corp. (NYSE: FDX) today reported a loss of $0.26 per diluted share for the fourth quarter ended May 31 compared to a loss of $3.16 per diluted share a year ago. With adjustments, FedEx’s fourth quarter earnings were $3.30 per diluted share compared to adjusted earnings of $2.66 per diluted share a year ago.

This year’s and last year’s quarterly consolidated earnings have been adjusted for:

 

Impact per diluted share		Fourth Quarter
		Fiscal 2016				Fiscal 2015
Mark-to-market pension accounting adjustments		($	3.47	)		($	4.88	)
TNT Express expenses and operating results from the date of acquisition			(0.34	)			—
FedEx Ground legal matter			(0.02	)			(0.47	)
Tax impact – corporate restructuring for TNT integration			0.28				—
Aircraft impairment and related charges			—				(0.62	)
Changes in segment reporting			—				0.15

“Fiscal 2016 was a successful year for FedEx in many ways,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “Of particular note was our corporate operating margin improvement. Our May 25 acquisition of TNT Express capped a historic year of significant accomplishments that benefited shareowners, team members and customers, and strongly positions FedEx for long-term profitable growth.”

 

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Fourth Quarter Results

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

 

		Fiscal 2016								Fiscal 2015
		As Reported (GAAP)				Adjusted (non-GAAP)				As Reported (GAAP)				Adjusted (non-GAAP)
Revenue		$	13.0 billion			$	13.0 billion			$	12.1 billion			$	12.1 billion
Operating (loss) income		($	68 million	)		$	1.51 billion			($	1.32 billion	)		$	1.28 billion
Operating margin			(0.5	%)			11.7	%			(10.9	%)			10.5	%
Net (loss) income		($	70 million	)		$	897 million			($	895 million	)		$	753 million
Diluted EPS		($	0.26	)		$	3.30			($	3.16	)		$	2.66

Operating results benefited from improved yield management, the continued positive impacts from profit improvement program initiatives at FedEx Express and strong volume growth at FedEx Ground. One additional operating day and the positive net impact of fuel also benefited results.

During the quarter, the company acquired 3.8 million shares of FedEx common stock at an average price of $156.21.

Full Year Results

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

 

		Fiscal 2016								Fiscal 2015
		As Reported (GAAP)				Adjusted (non-GAAP)				As Reported (GAAP)				Adjusted (non-GAAP)
Revenue		$	50.4 billion			$	50.4 billion			$	47.5 billion			$	47.5 billion
Operating income		$	3.08 billion			$	5.01 billion			$	1.87 billion			$	4.26 billion
Operating margin			6.1	%			10.0	%			3.9	%			9.0	%
Net income		$	1.82 billion			$	3.02 billion			$	1.05 billion			$	2.57 billion
Diluted EPS		$	6.51			$	10.80			$	3.65			$	8.95

Operating results benefited from profit improvement program initiatives at FedEx Express, e-commerce growth and the positive net impact of fuel. Two additional operating days also benefited the company’s transportation segments. These factors were partially offset by lower-than-anticipated revenue at FedEx Freight. Network expansion costs and self-insurance expenses at FedEx Ground and higher incentive compensation accruals also negatively impacted overall results.

 

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Capital spending for fiscal 2016 was $4.8 billion.

For the year, the company acquired 18.2 million shares of FedEx common stock at an average price of $149.35.

Outlook

FedEx is unable to forecast the fiscal 2017 year-end mark-to-market pension accounting adjustments as well as TNT Express financial results, including the combined impact of integration expenses and financing costs. As a result, the company is unable to provide unadjusted earnings guidance. Adjusted earnings for fiscal 2017 are projected to be $11.75 to $12.25 per diluted share excluding TNT Express financial results net of integration expenses and financing costs, and the mark-to-market pension accounting adjustments. The outlook assumes continued moderate economic growth.

Capital spending for fiscal 2017 is expected to be approximately $5.1 billion, which includes ongoing expansion of the FedEx Ground network and planned aircraft deliveries to support the FedEx Express fleet modernization program. Investments in TNT Express are not included in this forecast.

“Our strong operating cash flow generation allowed us to invest in FedEx’s future this past year,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “We executed on numerous capital projects and completed the acquisition of TNT Express, our largest ever. We were especially pleased with FedEx Express’s continued improvement in operating margin, which was 11.3% in the fourth quarter.”

FedEx Express Segment

For the fourth quarter, the FedEx Express segment reported:

 

		Fiscal 2016				Fiscal 2015				Change
Revenue		$	6.72 billion			$	6.70 billion				—
Operating income		$	757 million			$	322 million				135	%
Operating margin			11.3	%			4.8	%			6.5 pts
Adjusted operating income		$	757 million			$	598 million				27	%
Adjusted operating margin			11.3	%			8.9	%			2.4 pts

Revenue increased slightly as improved yield management and the benefit of one additional operating day more than offset lower fuel surcharges and unfavorable currency exchange rates.

 

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Operating results improved due to yield management efforts, the ongoing benefits from profit improvement program initiatives and one additional operating day. Fuel had a positive year-over-year net impact on the quarter, while currency exchange rate changes had little net impact. Prior year results include the impact of aircraft impairment and related charges.

FedEx Ground Segment

For the fourth quarter, the FedEx Ground segment reported:

 

		Fiscal 2016				Fiscal 2015				Change
Revenue		$	4.29 billion			$	3.57 billion				20	%
Operating income		$	656 million			$	603 million				9	%
Operating margin			15.3	%			16.9	%			(1.6 pts	)

Revenue increased due to a 10% increase in FedEx Ground volume and a 7% improvement in revenue per package driven by the recording of FedEx SmartPost revenues on a gross basis versus the previous net treatment. Revenue per package was also favorably impacted by increased rates, partially offset by lower fuel surcharges.

Operating income grew due to higher volumes and increased revenue per package as well as the benefit of one additional operating day. These factors were partially offset by higher operating costs and network expansion expenses. Operating margin decreased due to the change in FedEx SmartPost revenue reporting.

FedEx Freight Segment

For the fourth quarter, the FedEx Freight segment reported:

 

		Fiscal 2016				Fiscal 2015				Change
Revenue			$1.61 billion				$1.57 billion				2	%
Operating income			$137 million				$137 million				—
Operating margin			8.5	%			8.7	%			(0.2 pts	)

Revenue increased as less-than-truckload (LTL) average daily shipment growth of 8% and the benefit from an additional operating day more than offset the impact from lower fuel surcharges and weight per shipment.

Operating income was unchanged, as improved operating efficiencies, higher revenue, and an additional operating day were offset by increased salaries and employee benefits expense and the impact from lower weight per shipment.

 

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Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $58 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 400,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit news.fedex.com.

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs, Form 8-Ks and fourth quarter fiscal 2016 Statistical Book. These materials, as well as a webcast of the earnings release conference call to be held at 5:00 p.m. EDT on June 21, are available on the company’s website at investors.fedex.com. A replay of the conference call webcast will be posted on our website following the call.

The Investor Relations page of our website, investors.fedex.com, contains a significant amount of information about FedEx, including our SEC filings and financial and other information for investors. The information that we post on our Investor Relations website could be deemed to be material information. We encourage investors, the media and others interested in the company to visit this website from time to time, as information is updated and new information is posted.

Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, our ability to effectively operate, integrate and leverage acquired businesses, our ability to execute on our profit improvement initiatives, legal challenges or changes related to FedEx

 

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Ground’s owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and FedEx Corp.’s filings with the SEC. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Media Contact: Jess Bunn 901-818-7463

Investor Contact: Mickey Foster 901-818-7468

Home Page: fedex.com

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO GAAP FINANCIAL MEASURES

Fiscal 2016 and Fiscal 2015 Results

The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or referred to herein as “reported”). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAAP financial measures, including, “adjusted” consolidated operating income and margin, net income and earnings per share, as well as “adjusted” FedEx Express segment operating income and margin for fourth quarter and full-year fiscal 2015.

We believe these non-GAAP (or “adjusted”) financial measures provide additional information to assist investors in understanding and assessing the company’s and our business segments’ ongoing performance and financial results (including progress on our profit improvement initiatives), as well as assessing our prospects for future performance. We believe these adjusted financial measures facilitate more meaningful analysis and more accurate comparisons of our ongoing business operations because they exclude items that may not be indicative of, or are unrelated to, the company’s and our business segments’ core operating performance, and are better measures for assessing trends in our underlying businesses. These adjustments are consistent with how management views our businesses. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating the company’s and each business

 

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segment’s ongoing performance. In addition, our Board of Directors, upon the recommendation of its Compensation Committee, has approved the exclusion of these items for purposes of our incentive compensation plans.

For the reasons set forth above, we have supplemented the presentation of our reported fourth quarter and full-year fiscal 2016 and 2015 consolidated operating income and margin, net income and earnings per share, and reported fourth quarter and full-year fiscal 2015 FedEx Express segment operating income and margin, with similar measures that exclude the impact of certain transactions (as applicable):

 

•

The year-end mark-to-market (“MTM”) accounting adjustments (non-cash) for our defined benefit pension and other postretirement plans;

 

•

The adjustment in “Corporate, eliminations and other” resulting from the change in recognizing expected return on plan assets for our defined benefit pension and other postretirement plans at the segment level associated with the adoption of MTM accounting in fiscal 2015;

 

•

Expenses in connection with the settlement of (and certain expected losses relating to) independent contractor litigation matters involving FedEx Ground, net of recognized insurance recovery;

 

•

Expenses in connection with the settlement of a U.S. Customs and Border Protection matter involving FedEx Trade Networks, net of recognized insurance recovery;

 

•

Expenses associated with the acquisition, financing and integration of TNT Express N.V. (“TNT Express”) and its operating results from the date of acquisition, net of any tax impact, including the income tax impact of an internal corporate restructuring to facilitate the integration of FedEx Express and TNT Express that is presented as a separate item herein; and

 

•

Aircraft impairment and related charges incurred in the fourth quarter of fiscal 2015.

As required by Securities and Exchange Commission rules, the tables below present a reconciliation of our presented non-GAAP measures to the most directly comparable GAAP measures. The non-GAAP measures supplement and should be read together with, and are not an alternative or substitute for, our reported financial results. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

 

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Fiscal 2017 Earnings Guidance

Our fiscal 2017 earnings guidance, as well as any forecast of the underlying effective tax rate, is a non-GAAP financial measure because it excludes the fiscal 2017 year-end MTM pension accounting adjustments and fiscal 2017 TNT Express financial results, including the combined impact of integration expenses and financing costs. We are unable to predict the amount of the year-end MTM pension accounting adjustments, as they are significantly impacted by changes in interest rates and the financial markets, so such adjustments are not included in our earnings guidance. It is reasonably possible, however, that our fourth quarter fiscal 2017 MTM pension accounting adjustments could have a material impact on our fiscal 2017 consolidated financial results and effective tax rate.

We acquired TNT Express on May 25, 2016, and we are in the very beginning of the process of integrating TNT Express with our FedEx Express operations, which will occur over several years. With our acquisition of TNT Express, we now have full access to TNT Express’s business operations and plans. Fiscal 2017 will be a year of transition as we obtain a full understanding of TNT Express’s businesses, develop a business plan and validate and refine our integration plan for TNT Express using our well-established methodologies and processes. Moreover, we are uncertain how integration activities will impact TNT Express’s base business, including how integration activities will impact TNT Express’s previously announced transformation and turnaround strategy, Outlook. In addition, given the timing and complexity of the TNT Express acquisition, the presentation of TNT Express in our financial statements, including the allocation of the purchase price, is preliminary and will likely change in future periods, perhaps significantly. We plan to complete our purchase price allocation no later than the fourth quarter of fiscal 2017. As a result, we are unable at this time to forecast TNT Express’s fiscal 2017 financial results, including the combined impact of integration expenses and financing costs. Therefore, these results are not included in our earnings guidance. It is reasonably possible, however, that fiscal 2017 TNT Express financial results, including the combined impact of integration expenses and financing costs, could have a material impact on our fiscal 2017 consolidated financial results and effective tax rate.

For these reasons, a reconciliation of our fiscal 2017 earnings guidance to the most directly comparable GAAP measure is impracticable.

 

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Fourth Quarter Fiscal 2016

 

		FedEx Corporation
Dollars in millions, except EPS		Operating																Diluted Earnings/ (Loss) Per Share1
		Income/ (Loss)1				Margin				Income Taxes2				Net Income/ (Loss)
Non-GAAP measure3		$	1,506				11.7	%		$	508			$	897			$	3.30
MTM pension accounting adjustments4			(1,498	)			(11.6	%)			(552	)			(946	)			(3.47	)
TNT expenses and operating results5			(66	)			(0.5	%)			13				(91	)			(0.34	)
Tax impact – corporate restructuring for TNT integration			—				—				(76	)			76				0.28
FedEx Ground legal matter			(11	)			(0.1	%)			(4	)			(6	)			(0.02	)
GAAP measure3		($	68	)			(0.5	%)		($	111	)		($	70	)		($	0.26	)

Full Year Fiscal 2016

 

		FedEx Corporation
Dollars in millions, except EPS		Operating																Diluted Earnings Per Share
		Income1				Margin1				Income Taxes1,2				Net Income
Non-GAAP measure3		$	5,014				10.0	%		$	1,678			$	3,016			$	10.80
MTM pension accounting adjustments4			(1,498	)			(3.0	%)			(552	)			(946	)			(3.39	)
TNT expenses and operating results5			(115	)			(0.2	%)			(6	)			(125	)			(0.45	)
Tax impact – corporate restructuring for TNT integration			—				—				(76	)			76				0.27
FedEx Ground legal matters6			(256	)			(0.5	%)			(97	)			(158	)			(0.57	)
FedEx Trade Networks legal matter6			(69	)			(0.1	%)			(26	)			(43	)			(0.15	)
GAAP measure3		$	3,077				6.1	%		$	920			$	1,820			$	6.51

 

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Fourth Quarter Fiscal 2015

 

		FedEx Corporation
Dollars in millions, except EPS		Operating																Diluted Earnings/ (Loss) Per Share
		Income/ (Loss)				Margin1				Income Taxes1,2				Net Income/ (Loss)
Non-GAAP measure3		$	1,275				10.5	%			$ 426				$   753			$	2.66
Segment reporting change7			67				0.5	%			25				42				0.15
MTM pension accounting adjustments4			(2,190	)			(18.1	%)			(808	)			(1,382	)			(4.88	)
Aircraft impairment and related charges			(276	)			(2.3	%)			(101	)			(175	)			(0.62	)
FedEx Ground legal matter			(197	)			(1.6	%)			(64	)			(133	)			(0.47	)
GAAP measure3		($	1,321	)			(10.9	%)			($ 521	)			($   895	)		($	3.16	)

 

Dollars in millions		FedEx Express Operating
		Income				Margin
Non-GAAP measure		$	598				8.9	%
Aircraft impairment and related charges			(276	)			(4.1	%)
GAAP measure8		$	322				4.8	%

 

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Full Year Fiscal 2015

 

		FedEx Corporation
Dollars in millions, except EPS		Operating																Diluted Earnings Per Share
		Income				Margin1				Income Taxes1,2				Net Income
Non-GAAP measure3		$	4,264				9.0	%		$	1,451			$	2,572			$	8.95
Segment reporting change7			266				0.6	%			98				168				0.58
MTM pension accounting adjustments4			(2,190	)			(4.6	%)			(808	)			(1,382	)			(4.81	)
Aircraft impairment and related charges			(276	)			(0.6	%)			(101	)			(175	)			(0.61	)
FedEx Ground legal matter			(197	)			(0.4	%)			(64	)			(133	)			(0.46	)
GAAP measure3		$	1,867				3.9	%		$	577			$	1,050			$	3.65

 

Dollars in millions		FedEx Express Operating
		Income				Margin
Non-GAAP measure		$	1,860				6.8	%
Aircraft impairment and related charges			(276	)			(1.0	%)
GAAP measure8		$	1,584				5.8	%

Notes

 

1		–		Does not sum to total due to rounding.
2		–		Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction. The taxes associated with TNT Express expenses also include the impact from non-deductible expenses incurred as part of the acquisition.
3		–		Effect of “Total other (expense) income” on net income amount not shown.
4		–		MTM pension accounting adjustments reflect the year-end noncash adjustment to the valuation of the company’s defined benefit pension and other postretirement plans.
5		–		TNT Express’s operating results are immaterial from the time of acquisition (May 25, 2016).
6		–		Net of recognized insurance recovery.
7		–		Represents the adjustment in “Corporate, eliminations and other” resulting from the change in recognizing expected return on plan assets for our defined benefit pension and other postretirement plans at the segment level associated with the adoption of MTM accounting.
8		–		The most directly comparable GAAP measure is segment operating income.

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FEDEX CORP. FINANCIAL HIGHLIGHTS

Fourth Quarter Fiscal 2016

(In millions, except earnings per share)

(Unaudited)

 

		Three Months Ended												Twelve Months Ended
		May 31												May 31
		2016				2015				%				2016				2015				%
Revenue:
FedEx Express segment		$	6,715			$	6,697				—			$	26,451			$	27,239				(3	%)
FedEx Ground segment			4,286				3,568				20	%			16,574				12,984				28	%
FedEx Freight segment			1,605				1,569				2	%			6,200				6,191				—
FedEx Services segment			416				407				2	%			1,593				1,545				3	%
Eliminations and other			(43	)			(127	)			66	%			(453	)			(506	)			10	%
Total Revenue			12,979				12,114				7	%			50,365				47,453				6	%
Operating Expenses:
Salaries and employee benefits			4,774				4,432				8	%			18,581				17,110				9	%
Purchased transportation			2,461				2,079				18	%			9,966				8,483				17	%
Rentals and landing fees			733				673				9	%			2,854				2,682				6	%
Depreciation and amortization			667				657				2	%			2,631				2,611				1	%
Fuel			535				738				(28	%)			2,399				3,720				(36	%)
Maintenance and repairs			527				495				6	%			2,108				2,099				—
Impairment charges1			—				276				NM				—				276				NM
Retirement plans mark-to-market adjustment			1,498				2,190				(32	%)			1,498				2,190				(32	%)
Other2			1,852				1,895				(2	%)			7,251				6,415				13	%
Total Operating Expenses			13,047				13,435				(3	%)			47,288				45,586				4	%
Operating Income:
FedEx Express segment1			757				322				135	%			2,519				1,584				59	%
FedEx Ground segment			656				603				9	%			2,276				2,172				5	%
FedEx Freight segment			137				137				—				426				484				(12	%)
Corporate, eliminations and other2			(1,618	)			(2,383	)			(32	%)			(2,144	)			(2,373	)			(10	%)
Total Operating Income			(68	)			(1,321	)			(95	%)			3,077				1,867				65	%
Other (Expense) Income:
Interest, net			(97	)			(68	)			43	%			(315	)			(221	)			43	%
Other, net			(16	)			(27	)			(41	%)			(22	)			(19	)			16	%
Total Other (Expense) Income			(113	)			(95	)			19	%			(337	)			(240	)			40	%
Pretax Income3			(181	)			(1,416	)			(87	%)			2,740				1,627				68	%
Provision for Income Taxes			(111	)			(521	)			(79	%)			920				577				59	%
Net Income		($	70	)		($	895	)			(92	%)		$	1,820			$	1,050				73	%
Diluted Earnings Per Share		($	0.26	)		($	3.16	)			(92	%)		$	6.51			$	3.65				78	%
Weighted Average Diluted Common and Common Equivalent Shares			269				283				(5	%)			279				287				(3	%)
Capital Expenditures		$	1,257			$	1,378				(9	%)		$	4,818			$	4,347				11	%

 

1		-		Prior year includes impairment and related charges (including $246 million noncash) to permanently retire and adjust the retirement schedule of certain aircraft and related engines. Such charges are included in FedEx Express segment results.
2		-		2016 includes legal reserve increases of $325 million. 2015 includes a legal reserve increase of $197 million. Such amounts are included in the “Corporate, eliminations and other” results.
3		-		Includes transaction, financing and integration planning expenses related to the TNT Express acquisition as well as TNT Express’s immaterial operating results from the time of acquisition of $79 million for the fourth quarter of fiscal 2016 and $132 million for fiscal 2016. These expenses are predominantly included in the “Corporate, eliminations and other” results.

 

Note:

On May 25, 2016, FedEx acquired TNT Express for €4.4 billion (approximately $4.9 billion). Given the timing of this acquisition, consolidated balance sheets are not included in the following financial schedules.

 

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FEDEX CORP. CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Fiscal 2016

(In millions)

(Unaudited)

 

		Year Ended May 31
		2016				2015
Operating Activities:
Net income		$	1,820			$	1,050
Noncash charges:
Retirement plans mark-to-market adjustment			1,498				2,190
Impairment charges			—				246
Depreciation and amortization			2,631				2,611
Other, net			296				(294	)
Changes in operating assets and liabilities, net			(537	)			(437	)
Cash provided by operating activities			5,708				5,366
Investing Activities:
Capital expenditures			(4,818	)			(4,347	)
Business acquisitions, net of cash acquired			(4,618	)			(1,429	)
Proceeds from asset dispositions and other			(10	)			24
Cash used in investing activities			(9,446	)			(5,752	)
Financing Activities:
Principal payments on debt			(41	)			(5	)
Proceeds from debt issuances			6,519				2,491
Dividends paid			(277	)			(227	)
Purchase of treasury stock			(2,722	)			(1,254	)
Other, net			132				344
Cash provided by financing activities			3,611				1,349
Effect of exchange rate changes on cash			(102	)			(108	)
Net (decrease) increase in cash and cash equivalents			(229	)			855
Cash and cash equivalents at beginning of period			3,763				2,908
Cash and cash equivalents at end of period		$	3,534			$	3,763

 

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FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS

Fourth Quarter Fiscal 2016

(Dollars in millions)

(Unaudited)

 

		Three Months Ended												Twelve Months Ended
		May 31												May 31
		2016				2015				%				2016				2015				%
Revenues:
Package Revenue:
U.S. Overnight Box		$	1,719			$	1,664				3	%		$	6,763			$	6,704				1	%
U.S. Overnight Envelope			435				422				3	%			1,662				1,629				2	%
Total U.S. Overnight			2,154				2,086				3	%			8,425				8,333				1	%
U.S. Deferred			811				818				(1	%)			3,379				3,342				1	%
Total U.S. Package Revenue			2,965				2,904				2	%			11,804				11,675				1	%
International Priority			1,454				1,509				(4	%)			5,697				6,251				(9	%)
International Economy			594				572				4	%			2,282				2,301				(1	%)
Total International Export Package			2,048				2,081				(2	%)			7,979				8,552				(7	%)
International Domestic1			319				324				(2	%)			1,285				1,406				(9	%)
Total Package Revenue			5,332				5,309				—				21,068				21,633				(3	%)
Freight Revenue:
U.S.			683				555				23	%			2,481				2,300				8	%
International Priority			355				406				(13	%)			1,384				1,588				(13	%)
International Airfreight			28				47				(40	%)			126				180				(30	%)
Total Freight Revenue			1,066				1,008				6	%			3,991				4,068				(2	%)
Other Revenue2			317				380				(17	%)			1,392				1,538				(9	%)
Total Express Revenue		$	6,715			$	6,697				—			$	26,451			$	27,239				(3	%)
Operating Expenses:
Salaries and employee benefits			2,602				2,530				3	%			10,240				10,104				1	%
Purchased transportation			539				602				(10	%)			2,301				2,544				(10	%)
Rentals and landing fees			427				409				4	%			1,688				1,693				—
Depreciation and amortization			347				354				(2	%)			1,385				1,460				(5	%)
Fuel			444				626				(29	%)			2,023				3,199				(37	%)
Maintenance and repairs			313				297				5	%			1,294				1,357				(5	%)
Impairment charges3			—				276				NM				—				276				NM
Intercompany charges			475				482				(1	%)			1,846				1,842				—
Other			811				799				2	%			3,155				3,180				(1	%)
Total Operating Expenses			5,958				6,375				(7	%)			23,932				25,655				(7	%)
Operating Income		$	757			$	322				135	%		$	2,519			$	1,584				59	%
Operating Margin			11.3	%			4.8	%			6.5	pts			9.5	%			5.8	%			3.7	pts

 

1		-		International Domestic revenues represent international intra-country operations.
2		-		Includes FedEx Trade Networks and FedEx SupplyChain Systems.
3		-		Prior year includes impairment and related charges (including $246 million noncash) to permanently retire and adjust the retirement schedule of certain aircraft and related engines.

 

14

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FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS

Fourth Quarter Fiscal 2016

(Unaudited)

 

		Three Months Ended May 31												Twelve Months Ended May 31
		2016				2015				%				2016				2015				%
PACKAGE STATISTICS1
Average Daily Package Volume (000s):
U.S. Overnight Box			1,269				1,231				3	%			1,271				1,240				3	%
U.S. Overnight Envelope			558				547				2	%			541				527				3	%
Total U.S. Overnight Package			1,827				1,778				3	%			1,812				1,767				3	%
U.S. Deferred			825				881				(6	%)			901				916				(2	%)
Total U.S. Domestic Package			2,652				2,659				—				2,713				2,683				1	%
International Priority			399				408				(2	%)			394				410				(4	%)
International Economy			184				178				3	%			181				176				3	%
Total International Export Package			583				586				(1	%)			575				586				(2	%)
International Domestic2			869				850				2	%			888				853				4	%
Total Average Daily Packages			4,104				4,095				—				4,176				4,122				1	%
Yield (Revenue Per Package):
U.S. Overnight Box		$	20.83			$	21.12				(1	%)		$	20.79			$	21.29				(2	%)
U.S. Overnight Envelope			11.99				12.07				(1	%)			11.99				12.15				(1	%)
U.S. Overnight Composite			18.13				18.34				(1	%)			18.16				18.56				(2	%)
U.S. Deferred			15.12				14.50				4	%			14.66				14.36				2	%
U.S. Domestic Composite			17.20				17.07				1	%			17.00				17.13				(1	%)
International Priority			56.12				57.85				(3	%)			56.47				60.05				(6	%)
International Economy			49.49				50.10				(1	%)			49.15				51.54				(5	%)
Total International Export Composite			54.02				55.49				(3	%)			54.16				57.50				(6	%)
International Domestic2			5.66				5.96				(5	%)			5.65				6.49				(13	%)
Composite Package Yield		$	19.99			$	20.26				(1	%)		$	19.71			$	20.66				(5	%)
FREIGHT STATISTICS1
Average Daily Freight Pounds (000s):
U.S.			8,885				7,836				13	%			8,178				7,833				4	%
International Priority			2,530				2,953				(14	%)			2,510				2,887				(13	%)
International Airfreight			586				716				(18	%)			623				684				(9	%)
Total Avg Daily Freight Pounds			12,001				11,505				4	%			11,311				11,404				(1	%)
Revenue Per Freight Pound:
U.S.		$	1.18			$	1.11				6	%		$	1.19			$	1.16				3	%
International Priority			2.16				2.15				—				2.15				2.17				(1	%)
International Airfreight			0.73				1.01				(28	%)			0.79				1.04				(24	%)
Composite Freight Yield		$	1.37			$	1.37				—			$	1.38			$	1.40				(1	%)
Operating Weekdays			65				64				2	%			256				254				1	%

 

1		-		Package and freight statistics include only the operations of FedEx Express.
2		-		International Domestic revenues represent international intra-country express operations.

 

15

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FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Fourth Quarter Fiscal 2016

(Dollars in millions)

(Unaudited)

 

		Three Months Ended May 31												Twelve Months Ended May 31
		2016				2015				%				2016				20151				%
FINANCIAL HIGHLIGHTS
Revenues:
FedEx Ground2		$	3,889			$	3,239				20	%		$	15,050			$	12,568				20	%
GENCO			397				329				21	%			1,524				416				NM
Total Revenues			4,286				3,568				20	%			16,574				12,984				28	%
Operating Expenses:
Salaries and employee benefits			729				649				12	%			2,834				2,146				32	%
Purchased transportation2			1,687				1,256				34	%			6,817				5,021				36	%
Rentals			173				136				27	%			639				485				32	%
Depreciation and amortization			157				149				5	%			608				530				15	%
Fuel			2				3				(33	%)			10				12				(17	%)
Maintenance and repairs			79				70				13	%			288				244				18	%
Intercompany charges			320				289				11	%			1,230				1,123				10	%
Other			483				413				17	%			1,872				1,251				50	%
Total Operating Expenses			3,630				2,965				22	%			14,298				10,812				32	%
Operating Income		$	656			$	603				9	%		$	2,276			$	2,172				5	%
Operating Margin			15.3	%			16.9	%			(1.6	pts)			13.7	%			16.7	%			(3.0	pts)
OPERATING STATISTICS3
Operating Weekdays			65				64				2	%			256				254				1	%
Average Daily Package Volume (000s)			7,453				6,746				10	%			7,526				6,911				9	%
Yield (Revenue Per Package)2		$	8.01			$	7.49				7	%		$	7.80			$	7.16				9	%

 

1		-		The financial results of GENCO are included from the January 30, 2015 date of closing.
2		-		Effective June 1, 2015, FedEx Ground began recording FedEx SmartPost service revenues on a gross basis (including postal fees). Postal fees, which previously were netted against revenue, are now charged to purchased transportation.
3		-		Operating statistics include only the operations of FedEx Ground (including FedEx SmartPost). FedEx SmartPost was merged into FedEx Ground on August 31, 2015.

 

16

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FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Fourth Quarter Fiscal 2016

(Dollars in millions)

(Unaudited)

 

		Three Months Ended May 31												Twelve Months Ended May 31
		2016				2015				%				2016				2015				%
FINANCIAL HIGHLIGHTS
Revenue		$	1,605			$	1,569				2	%		$	6,200			$	6,191				—
Operating Expenses:
Salaries and employee benefits			757				692				9	%			2,925				2,698				8	%
Purchased transportation			242				253				(4	%)			962				1,045				(8	%)
Rentals			33				33				—				142				129				10	%
Depreciation and amortization			63				60				5	%			248				230				8	%
Fuel			86				109				(21	%)			363				508				(29	%)
Maintenance and repairs			52				53				(2	%)			206				201				2	%
Intercompany charges			119				115				3	%			456				444				3	%
Other			116				117				(1	%)			472				452				4	%
Total Operating Expenses			1,468				1,432				3	%			5,774				5,707				1	%
Operating Income		$	137			$	137				—			$	426			$	484				(12	%)
Operating Margin			8.5	%			8.7	%			(0.2	pts)			6.9	%			7.8	%			(0.9	pts)
OPERATING STATISTICS
LTL Operating Weekdays			65				64				2	%			254				252				1	%
Average Daily LTL Shipments (000s)
Priority			70.8				66.4				7	%			67.7				66.9				1	%
Economy			32.0				29.2				10	%			31.1				28.6				9	%
Total Average Daily LTL Shipments			102.8				95.6				8	%			98.8				95.5				3	%
Weight Per LTL Shipment (lbs)
Priority			1,197				1,301				(8	%)			1,191				1,272				(6	%)
Economy			1,121				984				14	%			1,145				1,003				14	%
Composite Weight Per LTL Shipment			1,173				1,204				(3	%)			1,177				1,191				(1	%)
LTL Revenue/Shipment
Priority		$	214.32			$	229.97				(7	%)		$	218.50			$	229.57				(5	%)
Economy			254.11				261.02				(3	%)			261.27				264.34				(1	%)
Composite LTL Revenue/Shipment		$	226.71			$	239.46				(5	%)		$	232.11			$	240.09				(3	%)
LTL Revenue/CWT
Priority		$	17.91			$	17.68				1	%		$	18.35			$	18.05				2	%
Economy			22.66				26.52				(15	%)			22.81				26.34				(13	%)
Composite LTL Revenue/CWT		$	19.33			$	19.89				(3	%)		$	19.73			$	20.15				(2	%)

 

17