10-Q

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

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

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ INVESTMENT

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

(1) General

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. These interim financial statements of FedEx Corporation (“FedEx”) have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission (“SEC”) instructions for interim financial information, and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 (“Annual Report”). 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 February 29, 2024, and the results of our operations for the three- and nine-month periods ended February 29, 2024 and February 28, 2023, cash flows for the nine-month periods ended February 29, 2024 and February 28, 2023, and changes in common stockholders’ investment for the three- and nine-month periods ended February 29, 2024 and February 28, 2023. Operating results for the three- and nine-month periods ended February 29, 2024 are not necessarily indicative of the results that may be expected for the year ending May 31, 2024.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2024 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

REVENUE RECOGNITION.

Contract Assets and Liabilities

Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only once all performance obligations have been completed (e.g., packages have been delivered). Contract assets are generally classified as current, and the full balance is converted each quarter based on the short-term nature of the transactions. Our contract liabilities consist of advance payments and billings in excess of revenue. The full balance of deferred revenue is converted each quarter based on the short-term nature of the transactions.

Gross contract assets related to in-transit shipments totaled $663 million and $686 million at February 29, 2024 and May 31, 2023, respectively. Contract assets net of deferred unearned revenue were $455 million and $484 million at February 29, 2024 and May 31, 2023, respectively. Contract assets are included within current assets in the accompanying unaudited condensed consolidated balance sheets. Contract liabilities related to advance payments from customers were $23 million and $19 million at February 29, 2024 and May 31, 2023, respectively. Contract liabilities are included within current liabilities in the accompanying unaudited condensed consolidated balance sheets.

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Disaggregation of Revenue

The following table provides revenue by service type (in millions) for the periods ended February 29, 2024 and February 28, 2023. This presentation is consistent with how we organize our segments internally for making operating decisions and measuring performance.


	Three Months Ended				Nine Months Ended
	2024		2023		2024		2023
REVENUE BY SERVICE TYPE
FedEx Express segment:
Package:
U.S. overnight box	$	2,145	$	2,165	$	6,491	$	6,718
U.S. overnight envelope		450		478		1,382		1,477
U.S. deferred		1,317		1,346		3,712		3,886
Total U.S. domestic package revenue		3,912		3,989		11,585		12,081
International priority		2,318		2,566		7,035		8,286
International economy		1,014		698		3,123		2,116
Total international export package revenue		3,332		3,264		10,158		10,402
International domestic(1)		1,016		1,003		3,126		3,013
Total package revenue		8,260		8,256		24,869		25,496
Freight:
U.S.		648		719		1,814		2,299
International priority		520		687		1,642		2,387
International economy		389		358		1,236		1,123
International airfreight		31		47		92		126
Total freight revenue		1,588		1,811		4,784		5,935
Other		253		278		787		905
Total FedEx Express segment		10,101		10,345		30,440		32,336
FedEx Ground segment		8,703		8,658		25,762		25,211
FedEx Freight segment		2,125		2,186		6,776		7,363
FedEx Services segment		64		87		201		225
Other and eliminations(2)		745		893		2,405		3,090
	$	21,738	$	22,169	$	65,584	$	68,225

(1)

International domestic revenue relates to our international intra-country operations.

(2)

Includes the FedEx Office and Print Services, Inc. (“FedEx Office”), FedEx Logistics, Inc. (“FedEx Logistics”), and FedEx Dataworks, Inc. (“FedEx Dataworks”) operating segments.

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. The pilots of Federal Express Corporation (“FedEx Express”), who are a small number of its total employees, are represented by the Air Line Pilots Association, International (“ALPA”) and are employed under a collective bargaining agreement that took effect on November 2, 2015. The agreement became amendable in November 2021. Bargaining for a successor agreement began in May 2021, and in November 2022 the National Mediation Board (“NMB”), which is the U.S. governmental agency that oversees labor agreements for entities covered by the Railway Labor Act of 1926, as amended, began actively mediating the negotiations. In July 2023, FedEx Express’s pilots failed to ratify the tentative successor agreement that was approved by ALPA’s FedEx Express Master Executive Council the prior month. Bargaining for a successor agreement continues. In March 2024, ALPA requested that the NMB release it from mediation. The conduct of mediated negotiations has no effect on our operations. A small number of our other employees are members of unions.

STOCK-BASED COMPENSATION. We have three types of equity-based compensation: stock options, restricted stock, and, for outside directors, restricted stock units. The key terms of the stock option and restricted stock awards granted under our outstanding incentive stock plans and financial disclosures about these programs are set forth in our Annual Report. The key terms of the restricted stock units granted to our outside directors are set forth in our Current Report on Form 8-K dated September 21, 2023 and filed with the SEC on September 22, 2023.

Our stock-based compensation expense was $34 million for the three-month period ended February 29, 2024 and $130 million for the nine-month period ended February 29, 2024. Our stock-based compensation expense was $34 million for the three-month period ended February 28, 2023 and $142 million for the nine-month period ended February 28, 2023. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report.

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BUSINESS OPTIMIZATION AND REALIGNMENT COSTS. In the second quarter of 2023, FedEx announced DRIVE, a comprehensive program to improve the company’s long-term profitability. This program includes a business optimization plan to drive efficiency among our transportation segments, lower our overhead and support costs, and transform our digital capabilities. We plan to consolidate our sortation facilities and equipment, reduce pickup-and-delivery routes, and optimize our enterprise linehaul network by moving beyond discrete collaboration to an end-to-end optimized network through Network 2.0, the multi-year effort to improve the efficiency with which FedEx picks up, transports, and delivers packages in the U.S. and Canada.

In the fourth quarter of 2023, we announced one FedEx, a consolidation plan to bring FedEx Express, FedEx Ground Package System, Inc. (“FedEx Ground”), and FedEx Corporate Services, Inc. (“FedEx Services”) into Federal Express Corporation, becoming a single company operating a unified, fully integrated air-ground express network under the respected FedEx brand. FedEx Freight, Inc., a wholly owned subsidiary of FedEx Freight Corporation (“FedEx Freight”), will continue to provide less-than-truckload (“LTL”) freight transportation services as a stand-alone and separate company under Federal Express Corporation. The organizational redesign will be implemented in phases with the new legal structure complete by June 2024. One FedEx will help facilitate our DRIVE transformation program to improve long-term profitability, including Network 2.0.

FedEx is making progress with Network 2.0, as the company has implemented Network 2.0 optimization in more than 50 locations in the U.S. In some markets, contracted service providers will handle the pickup and delivery of FedEx Ground and FedEx Express packages. In others, pickup and delivery will be handled exclusively by employee couriers.

We incurred costs associated with our business optimization activities of $114 million ($87 million, net of tax, or $0.35 per diluted share) in the three-month period ended February 29, 2024 and $364 million ($278 million, net of tax, or $1.10 per diluted share) in the nine-month period ended February 29, 2024. These costs were primarily related to professional services and severance. We recognized $120 million ($92 million, net of tax, or $0.36 per diluted share) of costs under this program in the three-month period ended February 28, 2023 and $180 million ($138 million, net of tax, or $0.53 per diluted share) in the nine-month period ended February 28, 2023. These costs were primarily related to consulting services, severance and related costs associated with organizational changes announced in the third quarter of 2023, and idling our operations in Russia. Business optimization costs are included in Corporate, other, and eliminations, FedEx Ground, and FedEx Express.

In 2021, FedEx Express announced a workforce reduction plan in Europe related to the network integration of TNT Express. The plan affected approximately 5,000 employees in Europe across operational teams and back-office functions and was completed in 2023.

We incurred costs associated with our business realignment activities of $3 million ($2 million, net of tax, or $0.01 per diluted share) in the three-month period ended February 28, 2023 and $17 million ($13 million, net of tax, or $0.05 per diluted share) in the nine-month period ended February 28, 2023. These costs were related to certain employee severance arrangements. The pre-tax cost of our business realignment activities through 2023 was approximately $430 million.

DERIVATIVE FINANCIAL INSTRUMENTS. Our risk management strategy includes the select use of derivative instruments to reduce the effects of volatility in foreign currency exchange exposure on operating results and cash flows. In accordance with our risk management policies, we do not hold or issue derivative instruments for trading or speculative purposes. All derivative instruments are recognized in the financial statements at fair value, regardless of the purpose or intent for holding them.

When we become a party to a derivative instrument and intend to apply hedge accounting, we formally document the hedge relationship and the risk management objective for undertaking the hedge, which includes designating the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge.

If a derivative is designated as a cash flow hedge, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in other comprehensive income. For net investment hedges, the entire change in the fair value is recorded in other comprehensive income. Any portion of a change in the fair value of a derivative that is considered to be ineffective, along with the change in fair value of any derivatives not designated in a hedging relationship, is immediately recognized in the income statement. We do not have any derivatives designated as a cash flow hedge for any period presented. As of February 29, 2024, we had €153 million of debt designated as a net investment hedge to reduce the volatility of the U.S. dollar value of a portion of our net investment in a euro-denominated consolidated subsidiary. As of February 29, 2024, the hedge remains effective.

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SUPPLIER FINANCE PROGRAM. We offer a voluntary Supply Chain Finance (“SCF”) program through one of our financial institutions to certain of our suppliers. We agree to commercial terms with our suppliers, including prices, quantities, and payment terms, and they issue invoices to us based on the agreed-upon contractual terms. If our suppliers choose to participate in the SCF program, they determine which invoices, if any, to sell to the financial institution to receive an early discounted payment, while we settle the net payment amount with our financial institution on the payment due dates. We guarantee these payments with the financial institution.

Amounts due to our suppliers that participate in the SCF program are included in accounts payable in our consolidated balance sheets. We have been informed by the participating financial institutions that as of February 29, 2024 and May 31, 2023, suppliers have been approved to sell to them $64 million and $76 million, respectively, of our outstanding payment obligations.

RECENT ACCOUNTING GUIDANCE. New accounting rules and disclosure requirements can significantly affect our reported results and the comparability of our financial statements. We believe the following new accounting guidance is relevant to the readers of our financial statements.

Recently Adopted Accounting Standards

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities-Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations, which requires a buyer in a supplier finance program (e.g., reverse factoring) to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. We adopted this standard effective June 1, 2023. The adoption of this standard did not have a material effect on our consolidated financial statements and related disclosures.

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), and in December 2022 subsequently issued ASU 2022-06, to temporarily ease the potential burden in accounting for reference rate reform. The standards provide optional expedients and exceptions for applying accounting principles generally accepted in the United States to existing contracts, hedging relationships, and other transactions affected by reference rate reform. The standards apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate to be discontinued because of reference rate reform. The standards were effective upon issuance and can generally be applied through December 31, 2024. While there has been no material effect to our financial condition, results of operations, or cash flows from reference rate reform as of February 29, 2024, we continue to monitor our contracts and transactions for potential application of these ASUs.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The update will be effective for annual periods beginning after December 15, 2023 (fiscal 2025). We are assessing the effect of this update on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024 (fiscal 2026). We are assessing the effect of this update on our consolidated financial statements and related disclosures.

In March 2024, the SEC adopted final rules requiring public entities to provide certain climate-related information in their registration statements and annual reports. As part of the disclosures, entities will be required to quantify certain effects of severe weather events and other natural conditions in a note to their audited financial statements. The rules will be effective for annual periods beginning in calendar 2025 (fiscal 2026). We are assessing the effect of the new rules on our consolidated financial statements and related disclosures.

EQUITY AND OTHER INVESTMENTS. Equity investments in private companies for which we do not have the ability to exercise significant influence are accounted for at cost, with adjustments for observable changes in prices or impairments, and are classified as “Other assets” on our consolidated balance sheets with adjustments recognized in “Other (expense) income, net” on our consolidated statements of income. Each reporting period, we perform a qualitative assessment to evaluate whether the investment is impaired. Our assessment includes a review of available recent operating results and trends, recent sales/acquisitions of the investee securities, and other publicly available data. If the investment is impaired, we write it down to its estimated fair value.

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Equity investments that have readily determinable fair values, including investments for which we have elected the fair value option, are included in “Other assets” on our consolidated balance sheets and measured at fair value with changes recognized in “Other (expense) income, net” on our consolidated statements of income.

During the nine-month period ended February 29, 2024, we purchased $100 million of debt securities with effective maturities ranging from less than one year to approximately three years. We did not purchase any debt securities during the three-month period ended February 29, 2024. These investments have been recognized in “Cash and cash equivalents” and “Prepaid expenses and other” on our consolidated balance sheets.

As of February 29, 2024, these investments are not material to our financial position or results of operations.

TREASURY SHARES. In December 2021, our Board of Directors authorized a stock repurchase program of up to $5 billion of FedEx common stock. As part of the 2021 program, we completed an accelerated share repurchase (“ASR”) agreement with a bank during the third quarter of 2024 to repurchase an aggregate of $1 billion of our common stock.

During the three-month period ended February 29, 2024, 4.1 million shares were repurchased under the ASR agreement at an average price of $245.80 per share for a total of $1 billion. The final number of shares delivered upon settlement of the ASR agreement was determined based on a discount to the volume-weighted average price of our stock during the term of the transaction. The repurchased shares were accounted for as a reduction to common stockholders’ investment in the accompanying consolidated balance sheet and resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share.

During the nine-month period ended February 29, 2024, we repurchased 8.0 million shares of FedEx common stock under ASR agreements under the 2021 program at an average price of $250.95 per share for a total of $2.0 billion. During the nine-month period ended February 28, 2023, we repurchased 9.2 million shares of FedEx common stock under ASR agreements under the 2021 program at an average price of $163.39 per share for a total of $1.5 billion. As of February 29, 2024, $564 million remained available to use for repurchases under the 2021 stock repurchase authorization. In March 2024, our Board of Directors authorized a new stock repurchase program for additional repurchases of up to $5 billion.

Shares under the 2021 and 2024 repurchase programs may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx common stock, and general market conditions. No time limits were set for the completion of the programs, and the programs may be suspended or discontinued at any time.

DIVIDENDS DECLARED PER COMMON SHARE. On February 16, 2024, our Board of Directors declared a quarterly dividend of $1.26 per share of common stock. The dividend will be paid on April 1, 2024 to stockholders of record as of the close of business on March 11, 2024. Each quarterly dividend payment is subject to review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis. There are no material restrictions on our ability to declare dividends, nor are there any material restrictions on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans, or advances.

(3) Accumulated Other Comprehensive Loss

The following table provides changes in accumulated other comprehensive income (“AOCI”), net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended February 29, 2024 and February 28, 2023 (in millions; amounts in parentheses indicate debits to AOCI):


	Three Months Ended						Nine Months Ended
	2024			2023			2024			2023
Foreign currency translation loss:
Balance at beginning of period	$	(1,362	)	$	(1,427	)	$	(1,362	)	$	(1,148	)
Translation adjustments		(39	)		80			(39	)		(199	)
Balance at end of period		(1,401	)		(1,347	)		(1,401	)		(1,347	)
Retirement plans adjustments:
Balance at beginning of period		68			42			35			45
Prior service credit arising during period		—			—			36			—
Reclassifications from AOCI		(2	)		(3	)		(5	)		(6	)
Balance at end of period		66			39			66			39
Accumulated other comprehensive (loss) at end of period	$	(1,335	)	$	(1,308	)	$	(1,335	)	$	(1,308	)

The following table presents details of the reclassifications from AOCI for the periods ended February 29, 2024 and February 28, 2023 (in millions; amounts in parentheses indicate debits to earnings):


	Amount Reclassified from AOCI									Affected Line Item in the Income Statement
	Three Months Ended				Nine Months Ended
	2024		2023		2024		2023
Amortization of retirement plans prior service credits, before tax	$	2	$	3	$	5	$	7		Other retirement plans, net
Income tax benefit		—		—		—		(1	)	Provision for income taxes
AOCI reclassifications, net of tax	$	2	$	3


Delaware	62-1721435
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

942 South Shady Grove Road, Memphis, Tennessee	38120
(Address of principal executive offices)	(ZIP Code)



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.10 per share	FDX	New York Stock Exchange
0.450% Notes due 2025	FDX 25A	New York Stock Exchange
1.625% Notes due 2027	FDX 27	New York Stock Exchange
0.450% Notes due 2029	FDX 29A	New York Stock Exchange
1.300% Notes due 2031	FDX 31	New York Stock Exchange
0.950% Notes due 2033	FDX 33	New York Stock Exchange


Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐


Common Stock		Outstanding Shares at March 19, 2024
Common Stock, par value $0.10 per share		246,080,750


		PAGE

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets February 29, 2024 and May 31, 2023		3
Condensed Consolidated Statements of Income Three and Nine Months Ended February 29, 2024 and February 28, 2023		5
Condensed Consolidated Statements of Comprehensive Income Three and Nine Months Ended February 29, 2024 and February 28, 2023		6
Condensed Consolidated Statements of Cash Flows Nine Months Ended February 29, 2024 and February 28, 2023		7
Condensed Consolidated Statements of Changes In Common Stockholders’ Investment Three and Nine Months Ended February 29, 2024 and February 28, 2023		8
Notes to Condensed Consolidated Financial Statements		9
Report of Independent Registered Public Accounting Firm		21
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition		22
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk		44
ITEM 4. Controls and Procedures		44

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings		45
ITEM 1A. Risk Factors		45
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds		45
ITEM 5. Other Information		45
ITEM 6. Exhibits		48
Signature		49


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	February 29, 2024 (Unaudited)		May 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,644	$	6,856
Receivables, less allowances of $775 and $800		9,904		10,188
Spare parts, supplies, and fuel, less allowances of $291 and $276		640		604
Prepaid expenses and other		1,236		962
Total current assets		17,424		18,610
PROPERTY AND EQUIPMENT, AT COST		84,145		80,624
Less accumulated depreciation and amortization		42,616		39,926
Net property and equipment		41,529		40,698
OTHER LONG-TERM ASSETS
Operating lease right-of-use assets, net		16,935		17,347
Goodwill		6,425		6,435
Other assets		3,801		4,053
Total other long-term assets		27,161		27,835
	$	86,114	$	87,143


	February 29, 2024 (Unaudited)			May 31, 2023
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	67		$	126
Accrued salaries and employee benefits		2,541			2,475
Accounts payable		3,780			3,848
Operating lease liabilities		2,447			2,390
Accrued expenses		4,473			4,747
Total current liabilities		13,308			13,586
LONG-TERM DEBT, LESS CURRENT PORTION		20,122			20,453
OTHER LONG-TERM LIABILITIES
Deferred income taxes		4,378			4,489
Pension, postretirement healthcare, and other benefit obligations		2,527			3,130
Self-insurance accruals		3,836			3,339
Operating lease liabilities		14,878			15,363
Other liabilities		690			695
Total other long-term liabilities		26,309			27,016
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS’ INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of February 29, 2024 and May 31, 2023		32			32
Additional paid-in capital		3,898			3,769
Retained earnings		37,174			35,259
Accumulated other comprehensive loss		(1,335	)		(1,327	)
Treasury stock, at cost		(13,394	)		(11,645	)
Total common stockholders’ investment		26,375			26,088
	$	86,114		$	87,143


	Three Months Ended						Nine Months Ended
	February 29, 2024			February 28, 2023			February 29, 2024			February 28, 2023

REVENUE	$	21,738		$	22,169		$	65,584		$	68,225
OPERATING EXPENSES:
Salaries and employee benefits		7,693			7,817			23,311			23,468
Purchased transportation		5,345			5,402			15,776			16,834
Rentals and landing fees		1,145			1,205			3,434			3,559
Depreciation and amortization		1,072			1,031			3,183			3,101
Fuel		1,140			1,350			3,569			4,765
Maintenance and repairs		804			789			2,482			2,575
Business optimization and realignment costs		114			123			364			197
Other		3,182			3,410			9,461			10,317
		20,495			21,127			61,580			64,816
OPERATING INCOME		1,243			1,042			4,004			3,409
OTHER (EXPENSE) INCOME:
Interest, net		(91	)		(122	)		(279	)		(391	)
Other retirement plans, net		40			102			120			304
Other, net		(9	)		—			(37	)		(87	)
		(60	)		(20	)		(196	)		(174	)
INCOME BEFORE INCOME TAXES		1,183			1,022			3,808			3,235
PROVISION FOR INCOME TAXES		304			251			951			801
NET INCOME	$	879		$	771		$	2,857		$	2,434
EARNINGS PER COMMON SHARE:
Basic	$	3.55		$	3.07		$	11.43		$	9.52
Diluted	$	3.51		$	3.05		$	11.31		$	9.46
DIVIDENDS DECLARED PER COMMON SHARE	$	1.26		$	1.15		$	3.78		$	4.60