FedEx (FDX) 8-K FedEx Corp. Reports First Quarter Earnings

Exhibit 99.1

FedEx Corp. Reports First Quarter Earnings

MEMPHIS, Tenn., September 17, 2019 ... FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the first quarter ended August 31 (adjusted measures exclude TNT Express integration expenses as described below):

	Fiscal 2020						Fiscal 2019
Dollars in millions, except EPS	As Reported (GAAP)			Adjusted (non-GAAP)			As Reported (GAAP)			Adjusted (non-GAAP)
Revenue	$	17,048		$	17,048		$	17,052		$	17,052
Operating income	$	977		$	1,048		$	1,071		$	1,192
Operating margin		5.7	%		6.1	%		6.3	%		7.0	%
Net income	$	745		$	800		$	835		$	933
Diluted EPS	$	2.84		$	3.05		$	3.10		$	3.46

This year’s and last year’s quarterly consolidated results have been adjusted for TNT Express integration expenses of $71 million ($0.21 per diluted share) for this year and $121 million ($0.36 per diluted share) for last year.

“Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer. “Despite these challenges, we are positioning FedEx to leverage future growth opportunities as we continue the integration of TNT Express, enhance FedEx Ground residential delivery capabilities and modernize the FedEx Express air fleet and hub operations.”

Operating results declined primarily due to weakening global economic conditions, increased costs to expand service offerings and continued mix shift to lower-yielding services. The impact of one fewer operating day and the loss of business from a large customer also negatively impacted results. These factors were partially offset by lower variable incentive compensation expenses, revenue growth at FedEx Ground and increased yields at FedEx Freight.

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2020 Rate Increases

As previously announced, effective January 6, 2020, FedEx Express, FedEx Ground and FedEx Home Delivery shipping rates will increase by an average of 4.9%, while FedEx Freight shipping rates will increase by an average of 5.9%. Details related to these and additional changes to rates and surcharges are available atfedex.com/rates2020.

Outlook

FedEx is unable to forecast the fiscal 2020year-endmark-to-market (MTM) retirement plan accounting adjustment. As a result, the company is unable to provide a fiscal 2020 earnings per share or effective tax rate (ETR) outlook on a GAAP basis.

FedEx is lowering its fiscal 2020 earnings forecast as the company’s revenue outlook has been reduced due to increased trade tensions and additional weakening of global economic conditions since the company’s initial fiscal 2020 forecast in June. The company’s revised outlook also reflects increased FedEx Ground costs and August’s loss of FedEx Ground business from a large customer. In addition, the FedEx ETR is now expected to be 24% to 26% before theyear-end MTM retirement plan accounting adjustment, due to lower-than-expected earnings in certainnon-U.S. jurisdictions.

FedEx now forecasts earnings of $10.00 to $12.00 per diluted share before theyear-end MTM retirement plan accounting adjustment, and earnings of $11.00 to $13.00 per diluted share before theyear-end MTM retirement plan accounting adjustment and excluding TNT Express integration expenses. The capital spending forecast remains $5.9 billion.

“FedEx is implementing additional cost-reduction initiatives to mitigate the effects of macroeconomic uncertainty, including post-peak reductions to the global FedEx Express air network to better match capacity with demand,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “However, we are continuing to make strategic investments to improve our capabilities and efficiency, which we expect will drive long-term increases in earnings, margins, cash flows and returns.”

These forecasts assume moderate U.S. economic growth, the company’s current fuel price expectations, no further weakening in international economic conditions from the company’s current forecast and no additional adverse developments in international trade policies and relations. FedEx’s ETR and earnings per share outlooks are based on the company’s current

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interpretations of the Tax Cuts and Jobs Act (TCJA) and related regulations and guidance, and are subject to change based on future guidance, as well as FedEx’s ability to defend its interpretations. These forecasts do not include potential costs associated with capacity reductions.

Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation,e-commerce and business services. With annual revenues of $70 billion, the company offers integrated business solutions through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 450,000 team members to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. To learn more about how FedEx connects people and possibilities around the world, please visitabout.fedex.com.

Additional information and operating data are contained in the company’s annual report, Form10-K, Form10-Qs, Form8-Ks, Statistical Books and supplemental first quarter fiscal 2020 earnings release conference call slides. These materials, as well as a webcast of the earnings release conference call to be held at 5:30 p.m. EDT on September 17, are available on the company’s website atinvestors.fedex.com. A replay of the conference call webcast will be posted on our website following the call.

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

Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate; anti-trade measures and additional changes in international trade policies and relations; a significant data breach or other disruption to our technology infrastructure; our ability to successfully integrate

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the businesses and operations of FedEx Express and TNT Express in the expected time frame and at the expected cost and to achieve the expected benefits from the combined businesses; our ability to successfully implement our business strategy and effectively respond to changes in market dynamics; the impact of the United Kingdom’s vote to leave the European Union and the terms of its withdrawal if it ultimately occurs; our ability to match capacity to shifting volume levels; changes in fuel prices or currency exchange rates; the impact of intense competition; evolving or new U.S. domestic or international government regulation or regulatory actions; future guidance, regulations, interpretations or challenges to our tax positions relating to the TCJA and our ability to defend our interpretations of the TCJA; our ability to effectively operate, integrate, leverage and grow acquired businesses; legal challenges or changes related to owner-operators engaged by FedEx Ground and the drivers providing services on their behalf; disruptions or modifications in service by, or changes in the business or financial soundness of, the U.S. Postal Service; the impact of any international conflicts or terrorist activities; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and FedEx Corp.’s filings with the SEC. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Media Contact: Jenny Robertson901-434-4829

Investor Contact: Mickey Foster901-818-7468

Home Page: fedex.com

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RECONCILIATIONS OFNON-GAAP FINANCIAL MEASURES

TO GAAP FINANCIAL MEASURES

First Quarter Fiscal 2020 and Fiscal 2019 Results

The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or “reported”). We have supplemented the reporting of our financial information determined in accordance with GAAP with certainnon-GAAP (or “adjusted”) financial measures, including our adjusted first quarter fiscal 2020 and 2019 consolidated operating income and margin, net income and diluted earnings per share. These financial measures have been adjusted to exclude the impact of TNT Express integration expenses incurred in fiscal 2020 and 2019.

We have incurred and expect to incur significant expenses through fiscal 2021, and may incur additional expenses thereafter, in connection with our integration of TNT Express. We have adjusted our first quarter fiscal 2020 and 2019 consolidated financial measures to exclude TNT Express integration expenses because we generally would not incur such expenses as part of our continuing operations. The integration expenses are predominantly incremental costs directly associated with the integration of TNT Express, including professional and legal fees, salaries and employee benefits, travel and advertising expenses. Internal salaries and employee benefits are included only to the extent the individuals are assigned full-time to integration activities. The integration expenses also include any restructuring charges at TNT Express.

We believe these adjusted financial measures facilitate analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of, or are unrelated to, the company’s and our business segments’ core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. These adjustments are consistent with how management views our businesses. Management uses thesenon-GAAP financial measures in making financial, operating and planning decisions and evaluating the company’s and each business segment’s ongoing performance.

Ournon-GAAP financial measures are intended to supplement and should be read together with, and are not an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of our financial statements should not place undue reliance on thesenon-GAAP financial measures. Becausenon-GAAP financial measures are not standardized, it may not be possible to compare these financial measures

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with other companies’non-GAAP financial measures having the same or similar names. As required by Securities and Exchange Commission rules, the tables below present a reconciliation of our presentednon-GAAP financial measures to the most directly comparable GAAP measures.

Fiscal 2020 Earnings Per Share and Effective Tax Rate Forecasts

Our fiscal 2020 earnings per share (EPS) forecast is anon-GAAP financial measure because it excludes the fiscal 2020year-endmark-to-market (MTM) retirement plan accounting adjustment and estimated fiscal 2020 TNT Express integration expenses. Our fiscal 2020 effective tax rate (ETR) forecast is anon-GAAP financial measure because it excludes the impact of the fiscal 2020year-end MTM retirement plan accounting adjustment.

We have provided thesenon-GAAP financial measures for the same reasons that were outlined above for historicalnon-GAAP measures. The fiscal 2020year-end MTM retirement plan accounting adjustment is excluded from our fiscal 2020 EPS and ETR forecasts, as applicable, because it is unrelated to our core operating performance and to assist investors with assessing trends in our underlying businesses. Estimated fiscal 2020 TNT Express integration expenses are excluded from our fiscal 2020 EPS forecast for the same reasons described above for historicalnon-GAAP measures.

We are unable to predict the amount of theyear-end MTM retirement plan accounting adjustment, as it is significantly impacted by changes in interest rates and the financial markets, so such adjustment is not included in our fiscal 2020 EPS and ETR forecasts. For this reason, a full reconciliation of our fiscal 2020 EPS and ETR forecasts to the most directly comparable GAAP measures is impracticable. It is reasonably possible, however, that our fiscal 2020year-end MTM retirement plan accounting adjustment could have a material impact on our fiscal 2020 consolidated financial results and ETR.

The table included below titled “Fiscal 2020 Earnings Per Share Forecast” outlines the impacts of the items that are excluded from our fiscal 2020 EPS forecast, other than theyear-end MTM retirement plan accounting adjustment.

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First Quarter Fiscal 2020

FedEx Corporation

Dollars in millions, except EPS						Income Taxes1		Net Income2		Diluted Earnings Per Share
	Operating
	Income		Margin
GAAP measure	$	977		5.7	%	$	251	$	745	$	2.84
TNT Express integration expenses3		71		0.4	%		16		55		0.21
Non-GAAP measure	$	1,048		6.1	%	$	267	$	800	$	3.05

First Quarter Fiscal 2019

FedEx Corporation

Dollars in millions, except EPS						Income Taxes1		Net Income2		Diluted Earnings Per Share
	Operating
	Income		Margin
GAAP measure	$	1,071		6.3	%	$	266	$	835	$	3.10
TNT Express integration expenses3		121		0.7	%		23		98		0.36
Non-GAAP measure	$	1,192		7.0	%	$	289	$	933	$	3.46

Fiscal 2020 Earnings Per Share Forecast

Dollars in millions, except EPS	Adjustments			Diluted Earnings Per Share
Earnings per diluted share beforeyear-end MTM retirement plan accounting adjustment(non-GAAP)4				$	10.00 to $12.00
TNT Express integration expenses	$	350
Income tax effect1		(86	)
Net of tax effect	$	264			1.00
Earnings per diluted share with adjustments4				$	11.00 to $13.00

Notes:

1 - Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction.

2 - Effect of “total other (expense) income” on net income amount not shown.

3 - These expenses, including restructuring charges, were recognized at FedEx Corporate and FedEx Express.

4 - Theyear-end MTM retirement plan accounting adjustment, which is impracticable to calculate at this time, is excluded.

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FEDEX CORP. FINANCIAL HIGHLIGHTS

First Quarter Fiscal 2020

(In millions, except earnings per share)

(Unaudited)

	Three Months Ended August 31
	2019			2018			%
Revenue:
FedEx Express segment	$	8,945		$	9,222			(3%	)
FedEx Ground segment		5,179			4,799			8%
FedEx Freight segment		1,905			1,959			(3%	)
FedEx Services segment		4			9			(56%	)
Other and eliminations1		1,015			1,063			(5%	)
Total Revenue		17,048			17,052			—
Operating Expenses:
Salaries and employee benefits		6,087			6,260			(3%	)
Purchased transportation		4,028			3,967			2%
Rentals and landing fees		920			823			12%
Depreciation and amortization		879			808			9%
Fuel		870			986			(12%	)
Maintenance and repairs		768			735			4%
Other		2,519			2,402			5%
Total Operating Expenses		16,071			15,981			1%
Operating Income (Loss):
FedEx Express segment2		285			388			(27%	)
FedEx Ground segment2		644			676			(5%	)
FedEx Freight segment		194			176			10%
Corporate, eliminations and other1,2		(146	)		(169	)		14%
Total Operating Income		977			1,071			(9%	)
Other Income (Expense):
Interest, net		(137	)		(127	)		8%
Other retirement plans income		168			158			6%
Other, net		(12	)		(1	)		NM
Total Other Income		19			30			(37%	)
Income Before Income Taxes		996			1,101			(10%	)
Provision for Income Taxes		251			266			(6%	)
Net Income	$	745		$	835			(11%	)
Diluted Earnings Per Share	$	2.84		$	3.10			(8%	)
Weighted Average Common and Common Equivalent Shares		262			269			(3%	)
Capital Expenditures	$	1,418		$	1,179			20%

1 - Includes the FedEx Logistics and FedEx Office operating segments.

2 - Prior year amounts have been revised to conform to the current year presentation.

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FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

First Quarter Fiscal 2020

(In millions)

	August 31, 2019 (Unaudited)
				May 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	2,389		$	2,319
Receivables, less allowances		9,312			9,116
Spare parts, supplies and fuel, less allowances		574			553
Prepaid expenses and other		742			1,098
Total current assets		13,017			13,086
Property and Equipment, at Cost		61,436			59,511
Less accumulated depreciation and amortization		29,826			29,082
Net property and equipment		31,610			30,429
Other Long-Term Assets
Operating leaseright-of-use assets		13,819			—
Goodwill		6,821			6,884
Other assets		3,185			4,004
Total other long-term assets		23,825			10,888
	$	68,452		$	54,403
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
Current Liabilities
Current portion of long-term debt	$	35		$	964
Accrued salaries and employee benefits		1,522			1,741
Accounts payable		3,179			3,030
Operating lease liabilities		1,896			—
Accrued expenses		3,303			3,278
Total current liabilities		9,935			9,013
Long-Term Debt, Less Current Portion		18,726			16,617
Other Long-Term Liabilities
Deferred income taxes		2,953			2,821
Pension, postretirement healthcare and other benefit obligations		4,132			5,095
Self-insurance accruals		1,924			1,899
Operating lease liabilities		12,137			—
Deferred lease obligations		—			531
Other liabilities		479			670
Total other long-term liabilities		21,625			11,016
Commitments and Contingencies
Common Stockholders’ Investment
Common stock, $0.10 par value, 800 million shares authorized		32			32
Additionalpaid-in capital		3,257			3,231
Retained earnings		25,048			24,648
Accumulated other comprehensive loss		(918	)		(865	)
Treasury stock, at cost		(9,253	)		(9,289	)
Total common stockholders’ investment		18,166			17,757
	$	68,452		$	54,403

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FEDEX CORP. CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

First Quarter Fiscal 2020

(In millions)

(Unaudited)

	Three Months Ended August 31
	2019			2018
Operating Activities:
Net income	$	745		$	835
Noncash charges:
Depreciation and amortization		879			808
Other, net		866			173
Changes in operating assets and liabilities, net		(1,925	)		(1,115	)
Net cash provided by operating activities		565			701
Investing Activities:
Capital expenditures		(1,418	)		(1,179	)
Proceeds from asset dispositions and other		(1	)		78
Net cash used in investing activities		(1,419	)		(1,101	)
Financing Activities:
Proceeds from short-term borrowings, net		—			299
Principal payments on debt		(985	)		(2	)
Proceeds from debt issuances		2,093			—
Proceeds from stock issuances		12			25
Dividends paid		(170	)		(173	)
Purchase of treasury stock		(3	)		(625	)
Other, net		(5	)		4
Net cash provided by (used in) financing activities		942			(472	)
Effect of exchange rate changes on cash		(18	)		(24	)
Net increase (decrease) in cash and cash equivalents		70			(896	)
Cash and cash equivalents at beginning of period		2,319			3,265
Cash and cash equivalents at end of period	$	2,389		$	2,369

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FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS

First Quarter Fiscal 2020

(Dollars in millions)

(Unaudited)

	Three Months Ended August 31
	2019		2018		%
Revenues:
Package Revenue:
U.S. Overnight Box	$	1,866	$	1,886		(1%	)
U.S. Overnight Envelope		479		468		2%
Total U.S. Overnight		2,345		2,354		—
U.S. Deferred		956		952		—
Total U.S. Package Revenue		3,301		3,306		—
International Priority		1,817		1,874		(3%	)
International Economy		855		850		1%
Total International Export Package		2,672		2,724		(2%	)
International Domestic1		1,076		1,131		(5%	)
Total Package Revenue		7,049		7,161		(2%	)
Freight Revenue:
U.S.		695		730		(5%	)
International Priority		464		533		(13%	)
International Economy		516		519		(1%	)
International Airfreight		66		85		(22%	)
Total Freight Revenue		1,741		1,867		(7%	)
Other Revenue		155		194		(20%	)
Total Express Revenue	$	8,945	$	9,222		(3%	)
Operating Expenses:
Salaries and employee benefits		3,372		3,473		(3%	)
Purchased transportation		1,232		1,307		(6%	)
Rentals and landing fees		513		470		9%
Depreciation and amortization		462		436		6%
Fuel		743		845		(12%	)
Maintenance and repairs		517		502		3%
Intercompany charges2		469		518		(9%	)
Other		1,352		1,283		5%
Total Operating Expenses2		8,660		8,834		(2%	)
Operating Income2	$	285	$	388		(27%	)
Operating Margin2		3.2%		4.2%		(1.0 pts	)

1 - International Domestic revenues relate to international intra-country operations.

2 - Prior year amounts have been revised to conform to the current year presentation.

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FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS

First Quarter Fiscal 2020

(Unaudited)

	Three Months Ended
	August 31
PACKAGE STATISTICS	2019		2018		%
Average Daily Package Volume (000s):
U.S. Overnight Box		1,218		1,231		(1%	)
U.S. Overnight Envelope		562		551		2%
Total U.S. Overnight Package		1,780		1,782		—
U.S. Deferred		976		916		7%
Total U.S. Domestic Package		2,756		2,698		2%
International Priority		530		526		1%
International Economy		294		276		7%
Total International Export Package		824		802		3%
International Domestic1		2,352		2,396		(2%	)
Total Average Daily Packages		5,932		5,896		1%
Yield (Revenue Per Package):
U.S. Overnight Box	$	23.94	$	23.57		2%
U.S. Overnight Envelope		13.32		13.09		2%
U.S. Overnight Composite		20.59		20.33		1%
U.S. Deferred		15.29		15.98		(4%	)
U.S. Domestic Composite		18.71		18.85		(1%	)
International Priority		53.52		54.80		(2%	)
International Economy		45.52		47.43		(4%	)
Total International Export Composite		50.67		52.26		(3%	)
International Domestic1		7.15		7.26		(2%	)
Composite Package Yield	$	18.57	$	18.69		(1%	)
FREIGHT STATISTICS
Average Daily Freight Pounds (000s):
U.S.		8,015		8,309		(4%	)
International Priority		4,792		5,260		(9%	)
International Economy		13,717		13,459		2%
International Airfreight		1,555		1,717		(9%	)
Total Avg Daily Freight Pounds		28,079		28,745		(2%	)
Revenue Per Freight Pound:
U.S.	$	1.36	$	1.35		1%
International Priority		1.51		1.56		(3%	)
International Economy		0.59		0.59		—
International Airfreight		0.66		0.76		(13%	)
Composite Freight Yield	$	0.97	$	1.00		(3%	)
Operating Weekdays		64		65		(2%	)

1 - International Domestic revenues relate to international intra-country operations.

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FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

First Quarter Fiscal 2020

(Dollars in millions)

(Unaudited)

	Three Months Ended
	August 31
	2019		2018		%
FINANCIAL HIGHLIGHTS
Revenue	$	5,179	$	4,799		8%
Operating Expenses:
Salaries and employee benefits		871		805		8%
Purchased transportation		2,303		2,062		12%
Rentals		239		191		25%
Depreciation and amortization		193		173		12%
Fuel		3		3		—
Maintenance and repairs		87		77		13%
Intercompany charges1		375		388		(3%	)
Other		464		424		9%
Total Operating Expenses1		4,535		4,123		10%
Operating Income1	$	644	$	676		(5%	)
Operating Margin1		12.4%		14.1%		(1.7 pts	)
OPERATING STATISTICS
Operating Weekdays		64		65		(2%	)
Average Daily Package Volume (000s)		8,834		8,221		7%
Yield (Revenue Per Package)	$	9.13	$	8.96		2%

1 - Prior year amounts have been revised to conform to the current year presentation.

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FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

First Quarter Fiscal 2020

(Dollars in millions)

(Unaudited)

	Three Months Ended August 31
	2019			2018			%
FINANCIAL HIGHLIGHTS
Revenue	$	1,905		$	1,959			(3%	)
Operating Expenses:
Salaries and employee benefits		919			928			(1%	)
Purchased transportation		187			259			(28%	)
Rentals		52			42			24%
Depreciation and amortization		94			78			21%
Fuel		123			137			(10%	)
Maintenance and repairs		65			62			5%
Intercompany charges		126			138			(9%	)
Other		145			139			4%
Total Operating Expenses		1,711			1,783			(4%	)
Operating Income	$	194		$	176			10%
Operating Margin		10.2	%		9.0	%		1.2 pts
OPERATING STATISTICS
Operating Weekdays		64			65			(2%	)
Average Daily Shipments (000s)
Priority		78.5			81.2			(3%	)
Economy		32.8			34.6			(5%	)
Total Average Daily Shipments		111.3			115.8			(4%	)
Weight Per Shipment (lbs)
Priority		1,156			1,218			(5%	)
Economy		960			1,009			(5%	)
Composite Weight Per Shipment		1,098			1,156			(5%	)
Revenue/Shipment
Priority	$	255.45		$	246.77			4%
Economy		295.75			292.33			1%
Composite Revenue/Shipment	$	267.34		$	260.39			3%
Revenue/CWT
Priority	$	22.10		$	20.26			9%
Economy		30.81			28.97			6%
Composite Revenue/CWT	$	24.35		$	22.53			8%

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