8-K

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): March 17, 2004

FEDEX CORPORATION
(Exact name of registrant as specified in its charter)

Commission file number 1-15829

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)

Registrant's telephone number, including area code: (901) 818-7500

FEDERAL EXPRESS CORPORATION
(Exact name of registrant as specified in its charter)

Commission file number 1-7806

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)

Registrant's telephone number, including area code: (901) 369-3600

EXPLANATORY NOTE

        The information in this Report, including the exhibit, is being furnished pursuant to Item 12 of Form 8-K and General Instruction B.6 thereunder. Such information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 7.    Financial Statements and Exhibits.

        (c) Exhibits. The following exhibit is being furnished as part of this Report.

Exhibit Number	Description
99.1	Press Release of FedEx Corporation dated March 17, 2004.

Item 12.    Results of Operations and Financial Condition.

        Attached as Exhibit 99.1 and incorporated herein by reference is a copy of FedEx Corporation's press release, dated March 17, 2004, announcing its and its wholly owned subsidiary Federal Express Corporation's financial results for the fiscal quarter ended February 29, 2004.

2

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

Date: March 17, 2004	FedEx Corporation
	By:	/s/  JOHN L. MERINO John L. Merino Corporate Vice President and Principal Accounting Officer
Date: March 17, 2004	Federal Express Corporation
	By:	/s/  JAY L. COFIELD Jay L. Cofield Vice President and Worldwide Controller

3

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release of FedEx Corporation dated March 17, 2004.

E-1

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EXPLANATORY NOTE

Item 7. Financial Statements and Exhibits.
Item 12. Results of Operations and Financial Condition.

SIGNATURES
EXHIBIT INDEX

EX-99.1

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Exhibit 99.1

FOR IMMEDIATE RELEASE

FedEx Corp. Net Income Soars 41% in Third Quarter
FedEx Express Operating Margin Improves on Lower Costs
and Strong International Revenue

        MEMPHIS, Tenn., March 17, 2004... FedEx Corporation (NYSE: FDX) today reported earnings of $0.68 per diluted share for the quarter ended February 29, including $0.03 per diluted share of costs associated with the previously announced business realignment through early retirement and severance programs. Excluding these costs, earnings for the third quarter were $0.71 per diluted share. Earnings were $0.49 per diluted share a year ago.

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

	Q3 Fiscal 2004
	As Reported (GAAP)		YOY %	Before Realignment Costs		YOY %	Q3 Fiscal 2003 As Reported (GAAP)
Revenue	$	6.06 billion	9	$	6.06 billion	9	$	5.55 billion
Operating Income	$	372 million	38	$	386 million	43	$	269 million
Net Income	$	207 million	41	$	216 million	47	$	147 million
Diluted EPS	$	0.68	39	$	0.71	45	$	0.49

        "Our revenue growth accelerated, reflecting a strengthening worldwide economy and successful execution of our business strategy, highlighted by the strong performance of our FedEx International Priority® service" said Alan B. Graf, Jr., executive vice president and chief financial officer. "In addition, substantial cost savings from our business realignment programs at FedEx Express are resulting in meaningful improvement in our Express margins."

        The third quarter pretax cost of the business realignment programs was $14 million. Approximately $65 million of savings were realized in the third quarter, reflected primarily in lower ongoing salaries and employee benefits costs. The company expects the savings from these initiatives to be $50 million to $60 million in the fourth quarter and the costs to be approximately $10 million. Related savings are expected to be $230 million to $240 million per year in fiscal 2005 and beyond.

        On February 12, 2004, FedEx completed the $2.4 billion acquisition of Kinko's, Inc. from Clayton, Dubilier & Rice, Inc. (which owned the majority of Kinko's outstanding shares) and others. During the third quarter, Kinko's contributed approximately $100 million of revenue and $0.01 per diluted share of earnings, as its results were only included for 18 days in the quarter. Kinko's will be reported as the company's fourth operating segment beginning with the fourth quarter.

        For the third consecutive year, FedEx ranked in the "Top 10" of FORTUNE magazine's "America's Most Admired Companies" and "World's Most Admired Companies" lists and in the top ten of the 2003 Harris Interactive/Reputation Institute's annual corporate reputation survey published by The Wall Street Journal. FedEx is the only transportation company and one of very few companies to rank this highly in all three reputation surveys.

        "At the heart of our strong reputation is our relentless commitment to delivering superior service for customers, generating outstanding financial returns for shareholders, maintaining the highest ethical standards, safeguarding our environment and being a great place to work," said Frederick W. Smith, chairman, president and chief executive officer.

Outlook

        Earnings are expected to be $1.15 to $1.25 per diluted share in the fourth quarter, excluding the costs of the company's business realignment activities, compared to $0.92 per diluted share a year ago. Fiscal 2004 earnings are expected to be $3.35 to $3.45 per diluted share, excluding business realignment costs and a one-time tax benefit recorded in the first quarter. Capital expenditures for fiscal 2004 are now expected to be approximately $1.4 billion, which is $200 million below the previous forecast and below fiscal 2003 levels. Guidance for fiscal 2005 earnings will be provided in conjunction with the company's investors and lenders meeting on April 8, 2004.

FedEx Express Segment

        For the third quarter, the FedEx Express segment reported:

	Q3 Fiscal 2004
	As Reported (GAAP)	YOY %	Before Realignment Costs	YOY %	Q3 Fiscal 2003 As Reported (GAAP)
Revenue	$4.37 billion	7	$4.37 billion	7	$4.09 billion
Op. Income	$218 million	68	$230 million	77	$130 million
Operating Margin	5.0%		5.3%		3.2%

        FedEx Express segment operating income improved 77% year over year before realignment costs, benefiting from ongoing cost control efforts including early retirement and severance savings and from revenue growth. Operating income improved despite higher employee compensation and benefits and maintenance costs.

        FedEx International Priority (IP) revenue grew 21% for the quarter, as IP revenue per package grew 10%, primarily due to an increase in average weight per package and favorable exchange rate differences. IP average daily package volume also grew 10%. Asia continued to be a growth engine, with volume increasing 22% year over year, while volume growth rates also increased in Europe, Latin America and U.S. export. Worldwide, FedEx Express average daily package volume grew 1% year over year. U.S. domestic express average daily package volume was flat year over year, while U.S. domestic package yield increased 1%.

        On March 16, 2004, FedEx Express entered into a fourth addendum to its transportation agreement with the U.S. Postal Service, allowing FedEx Express to continue carrying incremental pounds of mail through November 30, 2004 at higher committed volumes than required under the original agreement.

FedEx Ground Segment

        For the third quarter, the FedEx Ground segment reported:

•

Revenue of $960 million, up 8% from last year's $886 million



•

Operating income of $112 million, up 3% from $109 million a year ago



•

Operating margin was 11.6%, down from 12.3% the previous year

        Average daily package volume grew 6% in the third quarter, up from 1% and 3% growth in the first and second quarters, respectively, driven by growth in FedEx Home Delivery shipments. Yield improved 4% primarily due to a January 2004 general rate increase and an increase in extra services revenue, partially offset by higher customer discounts and the elimination of the fuel surcharge in January. The FedEx Ground segment operating margin was negatively affected by an operating loss at FedEx Supply Chain Services.

FedEx Freight Segment

        For the third quarter, the FedEx Freight segment reported:

•

Revenue of $630 million, up 11% from last year's $568 million



•

Operating income of $37 million, up 32% from $28 million a year ago



•

Operating margin was 5.9%, up from 4.9% the previous year

        FedEx Freight less-than-truckload (LTL) yield improved 6% year over year due to the impact of a 5.9% general rate increase on June 30, 2003, favorable contract renewals and growth in its interregional freight service. Average daily LTL shipments increased 4% compared to last year's third quarter, which is a continuation of a trend that began at the end of the second quarter. Operating income was up 32% compared to the previous year due to the impact of higher revenue and cost management efforts.

        FedEx Freight continues to improve its market position, with service at historically high levels and the successful launch of its money-back guarantee. The company has also increased capacity at a number of key locations to better meet growing customer demand.

Corporate Overview

        FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with the broadest portfolio of transportation, e-commerce and business services. With annual revenues of $25 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx and Kinko's brands. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 240,000 employees and contractors 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 fedex.com.

        Additional information and operating data are contained in the company's annual report, Form 10-K, Form 10-Qs and third quarter FY2004 Statistical Book. These materials, as well as a Webcast of the earnings release conference call to be held at 8:30 a.m. EST on March 17, are available on the company's Web site at www.fedex.com/us/investorrelations. A replay of the conference call Webcast will be posted on our Web site following the call.

        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, any impacts on the company's business resulting from the timing, speed and magnitude of the U.S. domestic economic recovery, the number, timing, mix and relocation costs of replacement personnel required as a result of the company's early retirement and severance programs, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage the Kinko's business, the impact of changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels, the timing and amount of any money that FedEx is entitled to receive under the Air Transportation Safety and System Stabilization Act and other factors which can be found in FedEx Corp.'s and its subsidiaries' press releases and filings with the SEC.

Media Contact: Jess Bunn 901-818-7463
Investor Contact: Jim Clippard 901-818-7468
Home Page: fedex.com

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES

        The company believes that meaningful analysis of our financial performance requires an understanding of the factors underlying that performance and our judgments about the likelihood that particular factors will repeat. Excluding the impact of business realignment costs from our third quarter results and from our earnings guidance will allow more accurate comparisons to prior periods of our year-to-date and expected operating performance in fiscal 2004 and beyond. As required by SEC rules, the tables below present a reconciliation of our presented non-GAAP measures to the most directly comparable GAAP measures.

Third Quarter Fiscal 2004
(Dollars in millions, except earnings per share)

	FedEx Corp.											FedEx Express Segment
	Operating											Operating
						Net Income			Diluted Earnings Per Share
	Income			Margin								Income			Margin
Non-GAAP Measure	$	386		6.4	%	$	216		$	0.71		$	230		5.3	%
Business Realignment Costs		(14	)	(0.3	%)		(9	)		(0.03	)		(12	)	(0.3	%)
GAAP Measure	$	372		6.1	%	$	207		$	0.68		$	218		5.0	%

Fiscal 2004 Fourth Quarter and Full-Year Earnings Guidance

	Q4 Diluted EPS Guidance			FY 2004 Diluted EPS Guidance
Non-GAAP Measure	$	1.15 to $1.25		$	3.35 to $3.45
Business Realignment Costs		(0.02	)		(0.90	)
Benefit From Tax Case Decision		—			0.08
GAAP Measure	$	1.13 to $1.23		$	2.53 to $2.63

FEDEX CORP. FINANCIAL HIGHLIGHTS
(Unaudited)

Third Quarter Fiscal 2004
(In millions, except earnings per share)

			Three Months Ended								Nine Months Ended
			Feb. 29, 2004			Feb. 28, 2003			%		Feb. 29, 2004			Feb. 28, 2003			%
Revenue:
	FedEx Express segment		$	4,374		$	4,094		7	%	$	12,790		$	12,184		5	%
	FedEx Ground segment			960			886		8	%		2,852			2,660		7	%
	FedEx Freight segment			630			568		11	%		1,931			1,817		6	%
	Other & eliminations			98			(3	)	NM			96			(4	)	NM
		Total Revenue		6,062			5,545		9	%		17,669			16,657		6	%
Operating Expenses:
	Salaries and employee benefits			2,649			2,464		8	%		7,778			7,293		7	%
	Purchased transportation			602			535		13	%		1,755			1,602		10	%
	Rentals and landing fees			474			452		5	%		1,350			1,361		(1	%)
	Depreciation and amortization			340			334		2	%		1,010			1,011		(0	%)
	Fuel			390			352		11	%		1,052			982		7	%
	Maintenance and repairs			380			344		10	%		1,114			1,069		4	%
	Business realignment costs			14			—		NM			429			—		NM
	Other			841			795		6	%		2,426			2,360		3	%
		Total Operating Expenses		5,690			5,276		8	%		16,914			15,678		8	%
Operating Income:
	FedEx Express segment			218			130		68	%		222			488		(55	%)
	FedEx Ground segment			112			109		3	%		363			345		5	%
	FedEx Freight segment			37			28		32	%		164			144		14	%
	Other & eliminations			5			2		150	%		6			2		200	%
		Total Operating Income		372			269		38	%		755			979		(23	%)
Other Income (Expense):
	Interest, net			(36	)		(29	)	24	%		(76	)		(88	)	(14	%)
	Other, net			(2	)		(3	)	(33	%)		(3	)		(4	)	(25	%)
		Total Other Income (Expense)		(38	)		(32	)	19	%		(79	)		(92	)	(14	%)
Pretax Income				334			237		41	%		676			887		(24	%)
Provision for Income Taxes				127			90		41	%		250			337		(26	%)
Net Income			$	207		$	147		41	%	$	426		$	550		(23	%)
Diluted Earnings Per Share			$	0.68		$	0.49		39	%	$	1.40		$	1.82		(23	%)
Weighted Average Common and
	Common Equivalent Shares			303			303		—			304			303		0	%
Capital Expenditures			$	284		$	286		(1	%)	$	892		$	1,174		(24	%)

7

FEDEX CORP. OPERATING HIGHLIGHTS
(Unaudited)

Third Quarter Fiscal 2004
(In thousands, except yield, weight and operating weekdays)

			Three Months Ended						Nine Months Ended
FEDEX EXPRESS			Feb. 29, 2004		Feb. 28, 2003		%		Feb. 29, 2004		Feb. 28, 2003		%
Operating Weekdays				63		63	—			190		190	—
AVG DAILY VOLUME / POUNDS
Average Daily Package Volume:
	U.S. Overnight Box			1,197		1,189	1	%		1,178		1,175	0	%
	U.S. Overnight Envelope			628		662	(5	)%		655		676	(3	%)
	U.S. Deferred			1,003		977	3	%		933		908	3	%
		Total U.S. Domestic Package		2,828		2,828	—			2,766		2,759	0	%
	International Priority			393		358	10	%		386		366	5	%
		Total Average Daily Packages		3,221		3,186	1	%		3,152		3,125	1	%
Average Daily Freight Pounds:
	U.S.			9,082		9,131	(1	)%		8,540		9,187	(7	%)
	International			2,060		2,183	(6	)%		2,143		2,157	(1	%)
		Total Avg Daily Freight Pounds		11,142		11,314	(2	)%		10,683		11,344	(6	%)
YIELD
Revenue Per Package:
	U.S. Overnight Box		$	18.37	$	18.09	2	%	$	18.23	$	18.10	1	%
	U.S. Overnight Envelope			10.06		10.03	0	%		9.95		9.87	1	%
	U.S. Deferred			10.85		10.82	0	%		10.82		10.90	(1	%)
		Total U.S. Domestic Package		13.86		13.69	1	%		13.77		13.71	0	%
	International Priority			51.41		46.67	10	%		50.19		45.83	10	%
		Composite Package Yield	$	18.43	$	17.39	6	%	$	18.23	$	17.47	4	%
Revenue Per Freight Pound:
	U.S.		$	0.73	$	0.69	6	%	$	0.73	$	0.67	9	%
	International			0.75		0.73	3	%		0.74		0.72	3	%
		Composite Freight Yield	$	0.74	$	0.69	7	%	$	0.73	$	0.68	7	%
FEDEX GROUND
Operating Weekdays				62		62	—			189		188	1	%
Average Daily Package Volume				2,296		2,171	6	%		2,250		2,183	3	%
Yield			$	6.52	$	6.27	4	%	$	6.44	$	6.17	4	%
FEDEX FREIGHT
LTL Operating Weekdays				62		62	—			188		188	—
LTL Shipments Per Day				55		53	4	%		56		57	(2	%)
Weight Per LTL Shipment (lbs)				1,121		1,110	1	%		1,119		1,111	1	%
LTL Revenue/CWT			$	14.35	$	13.59	6	%	$	14.21	$	13.30	7	%
FEDEX CORP.
Average Full-Time Equivalents (FTEs)(1)				206		191	8	%		206		192	7	%

⁽¹⁾

The three- and nine-month periods ending February 29, 2004 include employees of Kinko's for the entire periods.

8

FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

Third Quarter Fiscal 2004
(In millions)

		Feb. 29, 2004		May 31, 2003
		(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents		$	475	$	538
Other current assets			3,890		3,403
	Total Current Assets		4,365		3,941
Net Property and Equipment			9,007		8,700
Other Long-Term Assets			4,977		2,744
		$	18,349	$	15,385
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings		$	1,929	$	—
Current portion of long-term debt			148		308
Other current liabilities			3,589		3,027
	Total Current Liabilities		5,666		3,335
Long-Term Debt, Less Current Portion			1,859		1,709
Other Long-Term Liabilities			3,223		3,053
Total Common Stockholders' Investment			7,601		7,288
		$	18,349	$	15,385

9

FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)

Third Quarter Fiscal 2004
(In millions)

			Nine Months Ended
			Feb. 29, 2004			Feb. 28, 2003
Operating Activities:
	Net income		$	426		$	550
	Noncash charges (credits):
		Depreciation and amortization		1,010			1,011
		Other, net		77			236
	Changes in operating assets and liabilities, net			219			(891	)
Net cash provided by operating activities				1,732			906
Investing Activities:
	Business acquisition, net of cash acquired			(2,410	)		—
	Capital expenditures			(892	)		(1,174	)
	Proceeds from asset dispositions			14			20
Net cash used in investing activities				(3,288	)		(1,154	)
Financing Activities:
	Proceeds from short-term borrowings, net			1,929			200
	Dividends paid			(48	)		(45	)
	Other, net			(388	)		(52	)
Net cash provided by financing activities				1,493			103
Net decrease in cash and cash equivalents				(63	)		(145	)
Cash and cash equivalents at beginning of period				538			331
Cash and cash equivalents at end of period			$	475		$	186

10

FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS
(Unaudited)

Third Quarter Fiscal 2004
(In millions, except FTEs)

			Three Months Ended								Nine Months Ended
			Feb. 29, 2004			Feb. 28, 2003			%		Feb. 29, 2004			Feb. 28, 2003			%
Revenue			$	4,374		$	4,094		7	%	$	12,790		$	12,184		5	%
Operating Expenses:
	Salaries and employee benefits			1,855			1,781		4	%		5,495			5,216		5	%
	Purchased transportation			177			151		17	%		504			446		13	%
	Rentals and landing fees			388			391		(1	%)		1,142			1,173		(3	%)
	Depreciation and amortization			203			203		—			610			612		(0	%)
	Fuel			356			320		11	%		959			898		7	%
	Maintenance and repairs			300			269		12	%		878			840		5	%
	Business realignment costs			12			—		NM			423			—		NM
	Intercompany charges			350			328		7	%		1,039			987		5	%
	Other			515			521		(1	%)		1,518			1,524		(0	%)
		Total Operating Expenses		4,156			3,964		5	%		12,568			11,696		7	%
Operating Income			$	218		$	130		68	%	$	222		$	488		(55	%)
Operating Margin				5.0	%		3.2	%				1.7	%		4.0	%
Average Full-Time Equivalents (000s)				122			125		(2	%)		122			124		(2	%)

11

FEDEX GROUND SEGMENT FINANCIAL HIGHLIGHTS
(Unaudited)

Third Quarter Fiscal 2004
(In millions)

			Three Months Ended								Nine Months Ended
			Feb. 29, 2004			Feb. 28, 2003			%		Feb. 29, 2004			Feb. 28, 2003			%
Revenue			$	960		$	886		8	%	$	2,852		$	2,660		7	%
Operating Expenses:
	Salaries and employee benefits			183			176		4	%		547			531		3	%
	Purchased transportation			367			335		10	%		1,076			990		9	%
	Rentals			26			23		13	%		72			69		4	%
	Depreciation and amortization			38			38		—			114			115		(1	%)
	Fuel			4			3		33	%		9			7		29	%
	Maintenance and repairs			22			22		—			69			66		5	%
	Business realignment costs			1			—		NM			1			—		NM
	Intercompany charges			107			90		19	%		312			265		18	%
	Other			100			90		11	%		289			272		6	%
		Total Operating Expenses		848			777		9	%		2,489			2,315		8	%
Operating Income			$	112		$	109		3	%	$	363		$	345		5	%
Operating Margin				11.6	%		12.3	%				12.7	%		13.0	%

12

FEDEX FREIGHT SEGMENT FINANCIAL HIGHLIGHTS
(Unaudited)

Third Quarter Fiscal 2004
(In millions)

			Three Months Ended								Nine Months Ended
			Feb. 29, 2004			Feb. 28, 2003			%		Feb. 29, 2004			Feb. 28, 2003			%
Revenue			$	630		$	568		11	%	$	1,931		$	1,817		6	%
Operating Expenses:
	Salaries and employee benefits			346			313		11	%		1,031			970		6	%
	Purchased transportation			59			51		16	%		179			170		5	%
	Rentals and landing fees			25			25		—			74			80		(8	%)
	Depreciation and amortization			24			22		9	%		69			65		6	%
	Fuel			31			28		11	%		85			77		10	%
	Maintenance and repairs			28			27		4	%		84			86		(2	%)
	Intercompany charges			5			5		—			15			14		7	%
	Other			75			69		9	%		230			211		9	%
		Total Operating Expenses		593			540		10	%		1,767			1,673		6	%
Operating Income			$	37		$	28		32	%	$	164		$	144		14	%
Operating Margin				5.9	%		4.9	%				8.5	%		7.9	%

13

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Exhibit 99.1
FOR IMMEDIATE RELEASE

FedEx Corp. Net Income Soars 41% in Third Quarter FedEx Express Operating Margin Improves on Lower Costs and Strong International Revenue
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
FEDEX CORP. OPERATING HIGHLIGHTS (Unaudited)
FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS (Unaudited)
FEDEX GROUND SEGMENT FINANCIAL HIGHLIGHTS (Unaudited)
FEDEX FREIGHT SEGMENT FINANCIAL HIGHLIGHTS (Unaudited)