Attached files

file filename
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR3.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR6.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR2.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR8.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR4.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR21.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR1.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR20.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR22.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR15.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR19.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR7.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR12.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR16.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR13.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR23.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR5.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR14.htm
EXCEL - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPFinancial_Report.xls
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR28.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR9.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR11.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR25.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR26.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR27.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR18.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR24.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR10.htm
XML - IDEA: XBRL DOCUMENT - FEDERAL EXPRESS CORPR17.htm
EX-32.2 - EX-32.2 - FEDERAL EXPRESS CORPd599874dex322.htm
EX-32.1 - EX-32.1 - FEDERAL EXPRESS CORPd599874dex321.htm
EX-31.2 - EX-31.2 - FEDERAL EXPRESS CORPd599874dex312.htm
EX-31.1 - EX-31.1 - FEDERAL EXPRESS CORPd599874dex311.htm
EX-15.1 - EX-15.1 - FEDERAL EXPRESS CORPd599874dex151.htm
EX-12.1 - EX-12.1 - FEDERAL EXPRESS CORPd599874dex121.htm
Table of Contents

 

 

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 31, 2013

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 Web site, 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 18, 2013 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).

 

 

 


Table of Contents

FEDERAL EXPRESS CORPORATION

INDEX

 

             PAGE          
PART I. FINANCIAL INFORMATION   

ITEM 1. Financial Statements

  

Condensed Consolidated Balance Sheets
August 31, 2013 and May 31, 2013

     3   

Condensed Consolidated Statements of Income
Three Months Ended August 31, 2013 and 2012

     5   

Condensed Consolidated Statements of Comprehensive Income
Three Months Ended August  31, 2013 and 2012

     6   

Condensed Consolidated Statements of Cash Flows Three Months Ended
August 31, 2013 and 2012

     7   

Notes to Condensed Consolidated Financial Statements

     8   

Report of Independent Registered Public Accounting Firm

     13   

ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition

     14   

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

     21   

ITEM 4. Controls and Procedures

     21   
PART II. OTHER INFORMATION   

ITEM 1. Legal Proceedings

     22   

ITEM 1A. Risk Factors

     22   

ITEM 6. Exhibits

     22   

Signature

     23   

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 SCHEMA DOCUMENT

  

EX-101 CALCULATION LINKBASE DOCUMENT

  

EX-101 PRESENTATION LINKBASE DOCUMENT

  

EX-101 DEFINITION LINKBASE DOCUMENT

  

 

-2-


Table of Contents

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

 

     August 31,         
     2013      May 31,  
     (Unaudited)      2013  

ASSETS

     

CURRENT ASSETS

     

Cash and cash equivalents

   $ 805      $ 769  

Receivables, less allowances of $84 and $84

     1,568        1,595  

Spare parts, supplies and fuel, less allowances of $209 and $204

     380        385  

Deferred income taxes

     418        359  

Due from parent company and other FedEx subsidiaries

     547        430  

Prepaid expenses and other

     89        94  
  

 

 

    

 

 

 

Total current assets

     3,807        3,632  

PROPERTY AND EQUIPMENT, AT COST

     24,358        24,384  

Less accumulated depreciation and amortization

     11,552        11,538  
  

 

 

    

 

 

 

Net property and equipment

     12,806        12,846  

OTHER LONG-TERM ASSETS

     

Goodwill

     1,484        1,526  

Other assets

     945        959  
  

 

 

    

 

 

 

Total other long-term assets

     2,429        2,485  
  

 

 

    

 

 

 
   $   19,042      $   18,963  
  

 

 

    

 

 

 

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

 

-3-


Table of Contents

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE DATA)

 

     August 31,        
     2013     May 31,  
     (Unaudited)     2013  

LIABILITIES AND OWNER’S EQUITY

    

CURRENT LIABILITIES

    

Current portion of long-term debt

   $ 3     $  

Accrued salaries and employee benefits

     850       990  

Accounts payable

     1,302       1,270  

Accrued expenses

     976       972  

Due to other FedEx subsidiaries

     1,009       1,064  
  

 

 

   

 

 

 

Total current liabilities

     4,140       4,296  

LONG-TERM DEBT, LESS CURRENT PORTION

     240       240  

OTHER LONG-TERM LIABILITIES

    

Deferred income taxes

     2,974       2,833  

Pension, postretirement healthcare and other benefit obligations

     1,141       1,120  

Self-insurance accruals

     657       650  

Deferred lease obligations

     697       683  

Deferred gains, principally related to aircraft transactions

     217       223  

Other liabilities

     89       100  
  

 

 

   

 

 

 

Total other long-term liabilities

     5,775       5,609  

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

     8,392       8,246  

Accumulated other comprehensive loss

     (113     (36
  

 

 

   

 

 

 

Total owner’s equity

     8,887       8,818  
  

 

 

   

 

 

 
   $ 19,042     $ 18,963  
  

 

 

   

 

 

 

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

 

-4-


Table of Contents

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN MILLIONS)

 

     Three Months Ended  
     August 31,  
     2013     2012  

REVENUES

   $         6,346     $         6,396  

OPERATING EXPENSES:

    

Salaries and employee benefits

     2,360       2,397  

Purchased transportation

     430       376  

Rentals and landing fees

     414       409  

Depreciation and amortization

     366       320  

Fuel

     956       986  

Maintenance and repairs

     306       371  

Intercompany charges, net

     489       529  

Other

     795       808  
  

 

 

   

 

 

 
     6,116       6,196  
  

 

 

   

 

 

 

OPERATING INCOME

     230       200  

OTHER INCOME (EXPENSE):

    

Interest, net

     7       12  

Other, net

     (21     (17
  

 

 

   

 

 

 
     (14     (5
  

 

 

   

 

 

 

INCOME BEFORE INCOME TAXES

     216       195  

PROVISION FOR INCOME TAXES

     70       69  
  

 

 

   

 

 

 

NET INCOME

   $ 146     $ 126  
  

 

 

   

 

 

 

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

 

-5-


Table of Contents

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN MILLIONS)

 

     Three Months Ended  
     August 31,  
     2013     2012  

NET INCOME

   $         146     $         126  

OTHER COMPREHENSIVE INCOME (LOSS):

    

Foreign currency translation adjustments, net of tax of $9 in 2013 and $2 in 2012

     (78     40  

Amortization of unrealized pension actuarial gains/losses and other, net of tax of $1 in 2013

     1        
  

 

 

   

 

 

 
     (77     40  
  

 

 

   

 

 

 

COMPREHENSIVE INCOME

   $ 69     $ 166  
  

 

 

   

 

 

 

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

 

-6-


Table of Contents

FEDERAL EXPRESS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN MILLIONS)

 

     Three Months Ended  
     August 31,  
     2013     2012  

Operating Activities:

    

Net income

   $         146     $         126  

Noncash charges:

    

Depreciation and amortization

     366       320  

Other, net

     52       38  

Changes in assets and liabilities, net

     (224     1,094  
  

 

 

   

 

 

 

Cash provided by operating activities

     340       1,578  

Investing Activities:

    

Capital expenditures

     (304     (749

Business acquisitions, net of cash acquired

           (483

Other

     7       9  
  

 

 

   

 

 

 

Cash used in investing activities

     (297     (1,223

Financing Activities:

    

Principal payments on debt

           (301
  

 

 

   

 

 

 

Cash used in financing activities

           (301
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (7     11  
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     36       65  

Cash and cash equivalents at beginning of period

     769       712  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 805     $ 777  
  

 

 

   

 

 

 

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

 

-7-


Table of Contents

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, 2013 (“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 31, 2013, and the results of our operations and cash flows for the three-month periods ended August 31, 2013 and 2012. Operating results for the three-month period ended August 31, 2013 are not necessarily indicative of the results that may be expected for the year ending May 31, 2014.

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, 2014 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

BUSINESS ACQUISITIONS. As discussed in our Annual Report, on June 20, 2013, we signed agreements to acquire the businesses operated by our current service provider Supaswift (Pty) Ltd. in five countries in Southern Africa. In addition, on September 2, 2013, we entered into an agreement to acquire Supaswift’s business in two additional countries. This acquisition will be funded with cash from operations and is expected to be completed in the second half of 2014, subject to customary closing conditions. The financial results of the acquired businesses will be included in our results from the date of acquisition and will be immaterial to our 2014 results.

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. Our pilots, which represent a small number of our total employees, are employed under a collective bargaining agreement. The contract became amendable in March 2013, and the parties are currently in negotiations. 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 $15 million for the three months ended August 31, 2013 and $14 million for the three months ended August 31, 2012. 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 carrying values of $239 million at August 31, 2013 and May 31, 2013 compared with estimated fair values of $325 million at August 31, 2013 and $344 million at May 31, 2013. 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.

 

-8-


Table of Contents

On June 1, 2013, we adopted the authoritative guidance issued by the Financial Accounting Standards Board requiring additional information about reclassification adjustments out of accumulated other comprehensive income, including changes in accumulated other comprehensive income balances by component and significant items reclassified out of accumulated other comprehensive income. We have adopted this guidance by including expanded accumulated other comprehensive income disclosure requirements in Note 2 of our condensed consolidated financial statements.

We believe that no other new accounting guidance was adopted or issued during the first three months of 2014 that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on our financial reporting, as described in our Annual Report.

(2) Accumulated Other Comprehensive Income

The following table provides changes in accumulated other comprehensive income (“AOCI”), net of tax, reported in our condensed consolidated financial statements for the three-month periods ended August 31 (in millions):

 

     2013 (1)     2012 (1)  

Foreign currency translation gain (loss):

    

Balance at beginning of period

   $ 90     $ 54  

Translation adjustments

     (78     40  
  

 

 

   

 

 

 

Balance at end of period

     12       94  
  

 

 

   

 

 

 

Retirement plans adjustments:

    

Balance at beginning of period

     (126     (124

Reclassifications from AOCI

     1        
  

 

 

   

 

 

 

Balance at end of period

     (125     (124
  

 

 

   

 

 

 

Accumulated other comprehensive income at end of period

   $ (113   $ (30
  

 

 

   

 

 

 

 

(1) 

Amounts in parentheses indicate debits to AOCI.

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 (“FedEx Plan”), a defined benefit pension plan sponsored by FedEx. Defined contribution plans covering a majority of U.S. employees and certain international employees are in place. 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 August 31, 2013 and in our Annual Report.

 

-9-


Table of Contents

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

 

     2013      2012  

Pension plans sponsored by FedEx

   $             67      $             108  

Other U.S. domestic and international pension plans

     13        11  

U.S. domestic and international defined contribution plans

     58        58  

U.S. domestic and international postretirement healthcare plans

     15        15  
  

 

 

    

 

 

 
   $ 153      $ 192  
  

 

 

    

 

 

 

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 2014 or 2013 to pension plans sponsored by us, and we do not expect to make material contributions in 2014.

(4) Commitments

As of August 31, 2013, our purchase commitments under various contracts for the remainder of 2014 and annually thereafter were as follows (in millions):

 

     Aircraft and                
       Aircraft Related          Other(1)          Total    
        

2014 (remainder)

   $ 828      $ 62      $             890  

2015

     1,121        31        1,152  

2016

     1,083        28        1,111  

2017

     891        22        913  

2018

     1,475        19        1,494  

Thereafter

     5,211        86        5,297  
  

 

 

    

 

 

    

 

 

 

Total

   $ 10,609      $ 248      $ 10,857  
  

 

 

    

 

 

    

 

 

 

 

(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 31, 2013, our obligation to purchase four 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. Commitments to purchase aircraft in passenger configuration do not include the attendant costs to modify these aircraft for cargo transport unless we have entered into noncancelable commitments to modify such aircraft. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

During the first quarter of 2014, we entered into supplemental agreements to purchase the 16 Boeing 757 (“B757”) option aircraft pursuant to an agreement originally entered into in March 2013. Delivery of the aircraft will occur through 2015.

 

-10-


Table of Contents

We had $416 million in deposits and progress payments as of August 31, 2013 on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our consolidated balance sheets. In addition to our commitment to purchase B777Fs and B767Fs, our aircraft purchase commitments include the B757 aircraft in passenger configuration, which will require additional costs to modify for cargo transport. 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, 2013 with the year of expected delivery:

 

       B757          B767F          B777F          Total    
           

2014 (remainder)

     16        4        2        22  

2015

     11        12               23  

2016

            10        2        12  

2017

            10               10  

2018

            10        2        12  

Thereafter

            4        14        18  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     27        50        20        97  
  

 

 

    

 

 

    

 

 

    

 

 

 

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at August 31, 2013 is as follows (in millions):

 

     Operating Leases  
     Aircraft             Total  
       and Related          Facilities          Operating    
     Equipment      and Other      Leases  
        

2014 (remainder)

   $ 416      $ 557      $ 973  

2015

     448        715        1,163  

2016

     453        579        1,032  

2017

     391        762        1,153  

2018

     326        454        780  

Thereafter

     824        3,945        4,769  
  

 

 

    

 

 

    

 

 

 

Total

   $ 2,858      $ 7,012      $ 9,870  
  

 

 

    

 

 

    

 

 

 

Future minimum lease payments under capital leases were immaterial at August 31, 2013. 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

In August 2010, a third-party consultant who works with shipping customers to negotiate lower rates filed a lawsuit in federal district court in California against FedEx and United Parcel Service, Inc. (“UPS”) alleging violations of U.S. antitrust law. This matter was dismissed in May 2011, but the court granted the plaintiff permission to file an amended complaint, which FedEx received in June 2011. In November 2011, the court granted our motion to dismiss this complaint, but again allowed the plaintiff to file an amended complaint. The plaintiff filed a new complaint in December 2011, and the matter remains pending before the court. In February 2011, shortly after the initial lawsuit was filed, we received a demand for the production of information and documents in connection with a civil investigation by the U.S. Department of Justice (“DOJ”) into the policies and practices of FedEx and UPS for dealing with third-party consultants who work with shipping customers to negotiate lower rates. In November 2012, the DOJ served a civil investigative demand on the third-party consultant seeking all pleadings, depositions and documents produced in the lawsuit. We are cooperating with the investigation, do not believe that we have engaged in any anti-competitive activities and will vigorously defend ourselves in any action that may result from the investigation. While the litigation proceedings and the DOJ investigation move forward, and the amount of loss, if any, is dependent on a number of factors that are not yet fully developed or resolved, we do not believe that a material loss is reasonably possible.

We have 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. We responded to grand jury subpoenas issued in June 2008 and August 2009 and to additional requests for information

 

-11-


Table of Contents

pursuant to those subpoenas, and we continue to respond and cooperate with the investigation. We believe that our employees have acted in good faith at all times. We do not believe that we have engaged in any illegal activities and will vigorously defend ourselves in any action that may result from the investigation. The DOJ may pursue a criminal indictment and, if we are convicted, remedies could include fines, penalties, financial forfeiture and compliance conditions. We cannot estimate the amount or range of loss, if any, as such analysis would depend on facts and law that are not yet fully developed or resolved.

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 $1.5 billion at August 31, 2013 and $1.6 billion at May 31, 2013.

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):

 

     2013     2012  

Cash payments for:

    

Interest (net of capitalized interest)

   $ 1     $ 6  
  

 

 

   

 

 

 

Income taxes

   $          58     $          68  

Income tax refunds received

     (36     (10
  

 

 

   

 

 

 

Cash tax payments, net

   $ 22     $ 58  
  

 

 

   

 

 

 

 

-12-


Table of Contents

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 31, 2013, and the related condensed consolidated statements of income, comprehensive income and cash flows for the three-month periods ended August 31, 2013 and 2012. 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, 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, 2013, and the related consolidated statements of income, comprehensive income, changes in owner’s equity and cash flows for the year then ended not presented herein, and in our report dated July 15, 2013, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of May 31, 2013, 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 19, 2013

 

-13-


Table of Contents

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, 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, 2013 (“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 31, 2013.

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 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. 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. These costs are allocated based on metrics such as relative revenues or estimated services provided. “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 average revenue per package (yield);

 

 

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

 

 

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

The majority of our operating expenses are directly impacted by revenue and volume levels. Accordingly, we expect these operating expenses to fluctuate on a year-over-year basis consistent with the change in revenues and volumes. Therefore, the discussion of operating expense captions focuses on the key drivers and trends impacting expenses other than changes in revenues and volume.

 

-14-


Table of Contents

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2014 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

RESULTS OF OPERATIONS

We offer a wide range of U.S. domestic and international shipping services for delivery of packages and freight including priority services, which provide time-definite delivery within one, two or three business days worldwide, and deferred or economy services, which provide time-definite delivery within five business days worldwide. The following table compares revenues, operating expenses, operating expenses as a percent of revenue, operating income, net income and operating margin (dollars in millions) for the three-month periods ended August 31:

 

     2013     2012     Percent
Change
             

Revenues:

          

Package:

          

U.S. overnight box

   $     1,584     $     1,604       (1    

U.S. overnight envelope

     419       430       (3    

U.S. deferred

     729       702       4       
  

 

 

   

 

 

       

Total U.S. domestic package revenue

     2,732       2,736             
  

 

 

   

 

 

       

International priority

     1,576       1,661       (5    

International economy

     532       487       9       
  

 

 

   

 

 

       

Total international export package revenue

     2,108       2,148       (2    
  

 

 

   

 

 

       

International domestic(1) 

     345       309       12       
  

 

 

   

 

 

       

Total package revenue

     5,185       5,193             

Freight:

          

U.S.

     624       610       2       

International priority

     388       439       (12    

International airfreight

     54       74       (27    
  

 

 

   

 

 

       

Total freight revenue

     1,066       1,123       (5     Percent of Revenue   
        

 

 

 

Other

     95       80       19        2013       2012  
  

 

 

   

 

 

     

 

 

   

 

 

 

Total revenues

     6,346       6,396       (1     100.0     100.0

Operating expenses:

          

Salaries and employee benefits

     2,360       2,397       (2     37.2       37.5  

Purchased transportation

     430       376       14        6.8       5.9  

Rentals and landing fees

     414       409       1        6.5       6.4  

Depreciation and amortization

     366       320       14        5.8       5.0  

Fuel

     956       986       (3     15.1       15.4  

Maintenance and repairs

     306       371       (18     4.8       5.8  

Intercompany charges

     489       529       (8     7.7       8.3  

Other

     795       808       (2     12.5       12.6  
  

 

 

   

 

 

     

 

 

   

 

 

 

Total operating expenses

     6,116       6,196       (1     96.4     96.9
  

 

 

   

 

 

     

 

 

   

 

 

 

Operating income

   $ 230     $ 200       15       
  

 

 

   

 

 

       

Operating margin

     3.6     3.1     50 bp     

Other income (expense):

          

Interest, net

     7       12       (42    

Other, net

     (21     (17     24       
  

 

 

   

 

 

       
     (14     (5     180       
  

 

 

   

 

 

       

Income before income taxes

     216       195       11       

Provision for income taxes

     70       69       1       
  

 

 

   

 

 

       

Net income

   $ 146     $ 126       16       
  

 

 

   

 

 

       

 

(1) 

International domestic revenues include our international intra-country express operations including acquisitions in Poland (June 2012), France (July 2012) and Brazil (July 2012).

 

-15-


Table of Contents

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

 

     2013      2012      Percent
Change
 

Package Statistics

        

Average daily package volume (ADV):

        

U.S. overnight box

     1,112        1,092        2  

U.S. overnight envelope

     563        575        (2

U.S. deferred

     790        762        4  
  

 

 

    

 

 

    

Total U.S. domestic ADV

     2,465        2,429        1  
  

 

 

    

 

 

    

International priority

     406        408         

International economy

     165        143        15  
  

 

 

    

 

 

    

Total international export ADV

     571        551        4  
  

 

 

    

 

 

    

International domestic(1)

     789        681        16  
  

 

 

    

 

 

    

Total ADV

     3,825        3,661        4  
  

 

 

    

 

 

    

Revenue per package (yield):

        

U.S. overnight box

   $     22.27      $     22.59        (1

U.S. overnight envelope

     11.61        11.51        1  

U.S. deferred

     14.42        14.17        2  

U.S. domestic composite

     17.32        17.33         

International priority

     60.65        62.68        (3

International economy

     50.41        52.17        (3

International export composite

     57.70        59.94        (4

International domestic(1)

     6.84        7.00        (2

Composite package yield

     21.18        21.82        (3

Freight Statistics

        

Average daily freight pounds:

        

U.S.

     7,423        7,077        5  

International priority

     2,862        3,184        (10

International airfreight

     850        1,104        (23
  

 

 

    

 

 

    

Total average daily freight pounds

     11,135        11,365        (2
  

 

 

    

 

 

    

Revenue per pound (yield):

        

U.S.

   $ 1.31      $ 1.33        (2

International priority

     2.12        2.12         

International airfreight

     0.99        1.03        (4

Composite freight yield

     1.50        1.52        (1

 

(1) 

International domestic statistics include our international intra-country operations including acquisitions in Poland (June 2012), France (July 2012) and Brazil (July 2012).

Revenues

Our revenues decreased slightly in the first quarter of 2014 as revenue growth from stronger base U.S. business and prior year international domestic acquisitions was more than offset by the negative impact of lower fuel surcharges, one fewer operating day and continued shifts in demand from our priority international services to our economy international services. International export revenues were down in the first quarter of 2014 as revenue per package decreased 4% due to lower fuel surcharges, lower rates, and the demand shift to our lower-yielding economy services, while volume increased 4% driven by our economy services. Total average daily freight pounds decreased 2% in the first quarter of 2014 due to weakness in economic global conditions. International domestic revenues increased 12% during the first quarter of 2014 due to international business acquisitions during the first quarter of 2013.

 

-16-


Table of Contents

Our fuel surcharges are indexed to the spot price for jet fuel. Using this index, the U.S. domestic and outbound fuel surcharge and the international fuel surcharges ranged as follows for the three-month periods ended August 31:

 

         2013             2012      

U.S. Domestic and Outbound Fuel Surcharge:

    

Low

                   8.00                   10.00

High

     9.00       14.50  

Weighted-average

     8.50       12.12  

International Fuel Surcharges:

    

Low

     12.00       12.00  

High

     17.00       20.50  

Weighted-average

     15.36       16.13  

In September 2013, we announced a 3.9% average list price increase effective January 6, 2014, for FedEx Express U.S. domestic, U.S. export and U.S. import services.

Operating Income

Our results for the first quarter of 2014 were significantly constrained by the net negative impact of fuel and one fewer operating day. Despite the negative impact of these factors, our operating income increased by 15% and operating margin increased by 50 basis points in the first quarter of 2014, driven by stronger base U.S. business, and lower aircraft maintenance and pension expense, partially offset by higher depreciation expense.

In the first quarter of 2014, salaries and employee benefits benefited from lower pension expense, one fewer operating day and the delayed timing or absence of annual merit increases for many of our employees, partially offset by the impact of prior year international domestic acquisitions. Intercompany charges decreased 8% due to lower allocated sales and information technology costs. Purchased transportation costs increased 14% due to prior year international business acquisitions and higher utilization of third-party transportation providers. Depreciation and amortization expense increased 14% during the first quarter of 2014 as a result of accelerated depreciation due to the shortened life of certain aircraft and aircraft recently placed into service.

Our aircraft maintenance and repairs costs are largely driven by aircraft utilization and required periodic maintenance events. When newer aircraft are introduced into our operating fleet, less maintenance costs are incurred. As a part of our fleet modernization program, we have retired older, less efficient aircraft prior to required periodic maintenance events and have introduced newly manufactured aircraft into the fleet. Our aircraft maintenance and repairs costs decreased 18% in the first quarter of 2014, due to the benefits from the fourth quarter of 2013 retirement of 10 aircraft and related engines as we eliminated maintenance events for certain of these engines, along with the timing of other major maintenance events.

Fuel costs decreased 3% during the first quarter of 2014 due to lower aircraft fuel usage. Based on a static analysis of the net impact of year-over-year changes in fuel prices compared to year-over-year changes in fuel surcharges, fuel had a significant negative impact on operating income in the first quarter of 2014. This analysis considers the estimated impact of the reduction in fuel surcharges included in the base rates charged for our services.

Other Income and Income Taxes

Net interest income decreased during the first quarter of 2014 due to lower capitalized interest related to progress payments on aircraft purchases, which was partially offset by regularly scheduled debt maturities. Other expense increased primarily due to higher management fees from FedEx, partially offset by foreign exchange gains.

Our effective tax rate was 32.4% for the first quarter of 2014 and 35.4% for the first quarter of 2013. Our effective tax rate in the first quarter of 2014 was positively impacted by a reduction in net costs of intercompany charges from other FedEx affiliates. For 2014, we expect an effective tax rate between 34.5% and 35.0%. The actual rate, however, will depend on a number of factors, including the amount and source of operating income.

 

-17-


Table of Contents

As of August 31, 2013, there were no material changes to our liabilities for unrecognized tax benefits from May 31, 2013.

We are subject to taxation in the United States and various U.S. state, local and foreign jurisdictions. Substantially all U.S. federal income tax matters through fiscal year 2009 are concluded, and we are currently under examination by the Internal Revenue Service for the 2010 and 2011 tax years. It is reasonably possible that certain income tax return proceedings will be completed during the next 12 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.

Business Acquisitions

As discussed in our Annual Report, on June 20, 2013, we signed agreements to acquire the businesses operated by our current service provider Supaswift (Pty) Ltd. in five countries in Southern Africa. In addition, on September 2, 2013, we entered into an agreement to acquire Supaswift’s business in two additional countries. This acquisition will be funded with cash from operations and is expected to be completed in the second half of 2014, subject to customary closing conditions. The financial results of the acquired businesses will be included in our results from the date of acquisition and will be immaterial to our 2014 results.

RECENT ACCOUNTING GUIDANCE

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

On June 1, 2013, we adopted the authoritative guidance issued by the Financial Accounting Standards Board requiring additional information about reclassification adjustments out of accumulated other comprehensive income, including changes in accumulated other comprehensive income balances by component and significant items reclassified out of accumulated other comprehensive income. We have adopted this guidance by including expanded accumulated other comprehensive income disclosure requirements in Note 2 of our condensed consolidated financial statements.

We believe that no other new accounting guidance was adopted or issued during the first three months of 2014 that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on our financial reporting, as described in our Annual Report.

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;

 

-18-


Table of Contents
   

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;

 

   

disruptions to the Internet or our technology infrastructure, including those impacting our computer systems and Web site, 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 rising fuel costs) 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;

 

   

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 business realignment program;

 

   

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 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 of ours, as a consequence of the USPS’s current financial difficulties or any resulting structural changes to its operations, network, service offerings or pricing;

 

   

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

 

   

the increasing costs of compliance with federal and state governmental agency mandates, including those related to healthcare benefits, and defending against inappropriate or unjustified enforcement of other actions by such agencies;

 

-19-


Table of Contents
   

changes in foreign currency exchange rates, especially in the Chinese yuan, euro, Brazilian real, Canadian dollar and the British pound, 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 (the current pilot contract became amendable in March 2013, and the parties are currently in negotiations);

 

   

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;

 

   

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 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 forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

 

-20-


Table of Contents
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 31, 2013 (the end of the period covered by this Quarterly Report on Form 10-Q).

During our fiscal quarter ended August 31, 2013, 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.

 

-21-


Table of Contents

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

 

Exhibit
    Number    

  

Description of Exhibit

  10.1    Amendment dated June 24, 2013, 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 FY14 First Quarter Report on Form 10-Q, and incorporated herein by reference.)
  12.1    Computation of Ratio of Earnings to Fixed Charges.
  15.1    Letter re: Unaudited Interim Financial Statements.
  31.1    Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  31.2    Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  32.1    Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  32.2    Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1    Interactive Data Files.

 

-22-


Table of Contents

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 19, 2013        

  /s/ J. RICK BATEMAN

 
          J. RICK BATEMAN  
          VICE PRESIDENT AND  
          WORLDWIDE CONTROLLER  
          (PRINCIPAL ACCOUNTING OFFICER)  

 

-23-


Table of Contents

EXHIBIT INDEX

 

Exhibit
    Number    

  

Description of Exhibit

  10.1    Amendment dated June 24, 2013, 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 FY14 First Quarter Report on Form 10-Q, and incorporated herein by reference.)
  12.1    Computation of Ratio of Earnings to Fixed Charges.
  15.1    Letter re: Unaudited Interim Financial Statements.
  31.1    Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  31.2    Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  32.1    Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  32.2    Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1    Interactive Data Files.

 

E-1