roadshow - april 2 2014

1

FedEx CorporationINVESTOR RELATIONS

April 2014

Forward-Looking StatementsCertain statements in this meeting 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, legal challenges or changes related to FedEx Ground’s owner- operators, our ability to execute on our business realignment program, new U.S. domestic or international government regulation, the impact from any terroristactivities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corporation’s and its subsidiaries’ press releases and filings with the SEC.

2

Broad Portfolio of ServicesFY13 Revenues: $44.3 billionTeam Members: More than 300,000Countries and Territories Served: More than 220

61%$27.2 billion

24%$10.6 billion

12%$5.4 billion

4%$1.6 billion

*Express, Ground, Freight and Services show segment revenue. Not included in the chart is ($0.4) billion other & eliminations revenue

The FedEx Portfolio Bundle of ServicesFedEx Express

(FXE) only3.6%

The FedEx portfolio bundle has significant value, generating over94% of U.S. revenue from customers of two or more

FXE+FXG19.7%

FedEx Ground(FXG) only

0.4%

Data as of CY2012

AllOpCo’s73.5%

FXG+FXF0.2%

FXE+FXF0.8%

FedEx Freight(FXF) only

1.8%

operating companies

Managing as a portfolio for the benefit of customers and FedEx

Independent operations enable optimal service quality, reliability and focus

FedEx Long-Term Financial Goals

Achieve 10%+ operating margin

Increase EPS 10%-15% per year

Grow profitable revenue

Improve cash flows

Increase ROIC

Increase returns to shareowners

Path to Reach Financial GoalsE-commerce and global trade growth are increasing demand for our services.FedEx Express is targeting $1.6 billion in annual profit improvement by the end of FY16.FedEx Ground is gaining share with industry-leading margins. FedEx Freight margins are rebounding after the FY11transformation of our LTL operations.FedEx service levels and culture remain strong. Our balance sheet is solid.

ECO

NO

MIC

ECO

NO

MIC

OVE

RVI

EWO

VER

VIEW

GlobalGlobal GDP Growth Forecast

2.8% in CY143.1% in CY15

Brighter SpotsEmerging nations globally: 4.7% in CY14Emerging Asia-Pacific markets: 6.2% in CY14

Uncertainties

Policy environment, geopolitical tensions, energy prices

FedEx Analysis as of March 31, 2014

U.S.U.S. GDP Growth Forecast

2.6% in CY14; 3.0% in CY15U.S. Industrial Production Growth

3.4% in CY14; 3.7% in CY15U.S. Consumer Spending Growth

2.4% in CY14; 2.7% in CY15Positives

E-commerce, housing, financial conditionsUncertainties

Fiscal and monetary policy, energy pricesFedEx Analysis as of March 31, 2014

Year

-Ove

r-Ye

ar %Trade Growth Slower than GDP is Rare

20 World Trade Volume Global Real GDP15

10

5 CY13

0CY92 CY94 CY96 CY98 CY00 CY02 CY04 CY06 CY08 CY10 CY12

-5

-10

-15

Source: CPB Netherlands Bureau for Economic Policy Analysis, Economist Intelligence Unit, FedEx Analysis; based on data available March 2014

World International Air Express, Air Freight, and Ocean Freight Revenue Mix

6%

38%

55% CY

1994

CAGR 14%

CAGR 6%

CAGR 9%

10%

31%

59% CY

2004

CAGR 6%

CAGR 1%

CAGR 6%

12%

25%

63% CY

2012

InternationalAir Express1,5

InternationalAir Freight2,4,5

Dry CargoOcean3,4

% revenue mix of international air express and ocean cargo has been increasing in the period CY 1994-2012International air freight revenue mix has been declining in this period

1 – Excludes U.S. Domestic and International Domestic Express2 – Excludes U.S. Domestic and International Domestic Air Freight (estimates revised upwards incorporating transactional level data from CASS)3 – Containerized ocean cargo only

4 – Air and Ocean cargo revenues exclude customs, duties, taxes, demurrage and detention5 – Definitions: Air Express = DHL + FedEx + UPS + TNT;Air Freight = Freight Forwarders incl. FTN, UPS SCS and DHL GF

Source: Boeing, Global Insight, ACMG, Drewry, Seabury, IATA, & FedEx Analysis

Air Cargo Market and FedExInternational Weight Trends50%

40%

30%

20%

10%

0%

-10%

-20%

-30%Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14

International FreightTonne-Kilometers YoY-IATA

FedEx InternationalExpress Weight YoY

Source: IATA Monthly Air Transport Market Analysis Reports, FedEx Analysis Data shown through Jan 2014

FedEx Express Annual ProfitImprovement Targets$1.6 Billion by FY16

Efficiency of Staff Functions and

Processes

Modernizing ourAir Fleet

U.S. DomesticTransformation

International ProfitImprovement

Targeted Growth andYield Management

SG&A Cost Reductions

Voluntary buyout program departures will be complete by the end of FY14Organizational rationalization and sourcing improvementsEliminate non-essential work and retire redundant systems and processesInnovate, transform and streamline key support functionsAbsolute and permanent reduction in overall cost structure

Efficiency of Staff Functions and Processes

Investments in fleet modernization will lower operating cost globally and make growth more affordable

Represents costs savings from 767 aircraft delivered through FY16Benefits will continue to grow as more of our committed aircraft are delivered and deployedTrip Cost:

B757 Up to 20% improvementB767 Up to 30% improvement

Modernizing our Air Fleet

Trip cost improvements are based on a 750 nautical mile round trip. B757 as compared to A310-200 B767 as compared to MD10-30

Adjusting to New Business Trends

Implementing new technology and processes to improve flight and crew schedulingAdapting our pickup and delivery operations to maximize on-road efficiencyConsolidating facilities and stationsRefining aircraft maintenance processesImplementing process changes that improve fuel efficiency for our aircraft and vehicle fleetsNo impact to service

U.S. DomesticTransformation

International Success PlanGrow FedEx International Priority® and expandFedEx International First®

Transitioning international deferred shipments out of the FedEx Express air network on certain lanesLeverage European expansion for greater densities and lower costsIntegrate and achieve synergies on recent acquisitionsExpand freight forwarding and supply chain capabilities for new verticals like healthcare

International Profit

Improvement

Note: FY13 international revenue = 45% of total for FedEx Express

Right Solutions for RightCustomers at Right Price

Retain the majority of annual rate increasesRevenue Management Committee (RMC) optimizes yield, market share and profitability growthWilling to drop less-profitable accountsIncrease share of small and medium customersLeverage opportunities from FedEx DeliveryManagerSM and FedEx One RateSM

Targeted Growth and

Yield Management

for FedEx Express

FedEx Express Moves More Priority Package and Freight Than Other Integrators (by Weight)

U.S. DomesticOver 23M average daily pounds in FY13

InternationalOver 12M average daily pounds in FY13*

* Excludes International Domestic

Our integrated air/ground express network ensures lowest cost-to-serve time-definite deliveries (FedEx First Overnight®, FedEx Priority Overnight®, FedEx Standard Overnight®, FedEx 2Day®, FedEx Express Saver®, FedEx First Overnight ExpressFreight®, FedEx 1Day ExpressFreight®, FedEx 2Day ExpressFreight®, FedEx 3Day ExpressFreight®)

FedEx Express operates a sizable day network, dual-utilizing the overnight infrastructure for the airport-to-airport transportation of Priority Mail for the U.S. Postal Service and for deferred express shipments

FedEx Express has shifted volume to networks that best match customer needs

Removed about one million roundtrip pounds of capacity a day between APAC and the U.S.Transitioning international deferred shipments out of the FedExExpress air network on certain lanesThat transition is possible due to the integrated air/ground FedEx Express network that allows cost-effective movement of deferred import and export volumesWorking with customers to shift deferred FedEx Express volumes to FedEx Ground when it meets their needs

These actions have allowed FedEx Express to reduce its global jet fleet by 35 aircraft since May 2010

FedEx Ground has Built a BetterGround Business

Superior service, innovation and speed advantage are driving growthThree distinct services are all delivering significant growth: FedEx Ground®, FedEx Home Delivery®, FedEx SmartPost®

Yield management driving profitable growthFlexible business model: FedEx Ground effectively leveragesthe flexibility and entrepreneurialism of independent contractors57 consecutive quarters of year-over-year ground revenue share gains

Ave

rage

Dai

ly V

olum

e(M

illio

ns)

FedEx Ground is Faster to MoreLocations than UPS Ground

vs

Lanes faster than UPS Lanes equal to UPSUPS lanes faster

29.8%67.1%

3.0%

Net FedEx advantage 26.8%

as of September 2013

Ground Industry Daily Volume andFedEx Volume Share

20 50%

15

10 25%

5

0 0% CY98 CY99 CY00 CY01 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13

FedEx Ground/FedEx SmartPost ADV

Total Ground Market ADVFedEx Ground/FedEx SmartPost VolumeMarket Share

Source: FedEx Analysis Note: Figures Exclude USPS Priority Mail Volume

®

U.S. Online Sales Outpace Retail Sales at a YOY Growth Rate of Over 3:125%

20%

15%

10%

5%

0%

-5%

-10%

-15%

e-commerce Sales Retail Sales GDP at Current $

Source: BEA, Census Bureau, FedEx Analysis; based on data available March 2014

FedEx SmartPost is a componentof the portfolio of residential services in the B2C market

1–2 days transit timeTime-definiteMBGDeclared value up to $50K

1–5 days transit timeDay-definiteMBGDeclared value up to $50KHeavier-weight

2–8 days transit timeFinal delivery by the USPSNo MBGNo declared valueLighter-weight

($ B

illio

ns)

LTL is Vital to Supply Chain, Industry Continues to Rebound

35

30

$24.825$26.1

$27.6

$30.5

$33.0$34.4 $34.4 $34.1

$25.6

$27.9

$31.1$32.2

$33.7

20

15CY01 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13

Source: FedEx Analysis

LTL Industry Market Share Revenue(Includes Fuel Surcharge)

30%

25%

20%

15%

10%

5%

YRCW FedEx Con-wayUPS FreightODFL ABFS Saia

0%CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13

Source: FedEx Analysis, CY2013

FedEx Freight:Focused on Improved Profits

VolumeQuality volume, right shipment in the right laneSmall, medium-sized businesses

YieldAppropriate rate increases Timely contract renewals Differentiation basis of service, value

Network Design

FedEx Freight:Bold Actions to Improve Performance

Changed paradigm in FY11 to speed and price utilizing an efficient, differentiated network to support two servicesPriority: Fastest published times of any nationwide LTL Canada: Fastest published times of any LTL serviceconnecting the U.S and major Canadian markets87% of total shipments are from customers that use bothPriority and EconomyContinued successful rail implementation, now 17% of total linehaul miles

Operating Margin10.0%

9.0%8.0%7.0%6.0%5.0%4.0%3.0%2.0%1.0%

9.3%

7.8%

5.5% 5.8%6.5%

7.7% 7.3%

FY07 FY08 FY09 FY10 FY11 FY12 FY13

FY08, FY09, FY11, FY12 and FY13 exclude impairment and other charges

Earnings Per Share$7.00

$6.00

$5.00

$4.00

$3.00

$2.00

$1.00

$0.00

$6.48$5.83

$3.76 $3.76

$4.90

$6.59 $6.23



Free Cash Flows($Millions)

$1,000

$500

$0

$568$370 $357

$622$786 $885

-$500 ($567)

-$1,000FY07 FY08 FY09 FY10 FY11 FY12 FY13

Free cash flow is defined as net cash provided by operating activities, plus net cash used in investing activities

Capital Expenditures(% of Revenues)10.0%

8.0%

6.0%

8.2% 7.8%6.9%

8.1%8.7%

9.4%

7.6%

4.0%

2.0%

0.0%FY07 FY08 FY09 FY10 FY11 FY12 FY13

Return on Invested Capital12%

11%ROIC WACC

11.9%

10%

9%

8%

7%

6%

%

6.7%

8.0%

7.2%

7.5%

6.8%

7.9%

7.9%

9.2%

8.5% 8.3%8.0%

%



FedEx Corporation YTD Results

Q3 Year To Date FY14 YTD FY13 YTD Change

Revenue $33.7 B $32.9 B 3%

Operating Income $2.3 B $2.0 B 10%

Operating Margin 6.7% 6.2% 50bp

Diluted EPS (GAAP) $4.34 $3.97* 9%

* Q3 FY13 YTD EPS includes business realignment program costs of $64 million ($40 million, net of tax, or $0.13 per diluted share).

Explanatory Note on Non-GAAP Financial Information

Certain financial information discussed at this meeting and presented in the written materials is considered non-GAAP financial information, such as free cash flow and financial measures that exclude the impact of certain nonrecurring events. The following slides present a reconciliation of our presented non-GAAP measures to the most directly comparable GAAP measures.Additional information about FedEx’s historical financial results is available on our website (investors.fedex.com).Free cash flow is defined as net cash provided by operating activities, plus net cash used in investing activities.

Operating Margin Reconciliation

FY08 FY09 FY11 FY12 FY13

Operating margin (using adj. Op Profit)

7.8% 5.5% 6.5% 7.7% 7.3%

Impairment and other charges

(2.3%) (3.4%) (0.4%) (0.2%) (1.5%)

Operating margin (GAAP) 5.5% 2.1% 6.1% 7.5% 5.8%

FY08 is adjusted to exclude one-time, non cash goodwill impairment charge at FedEx Office ($891 million pretax) FY09 is adjusted to exclude impairment charges associated with goodwill and aircraft ($1.2 billion pretax)FY11 is adjusted to exclude FedEx Freight combination costs ($133 million pretax) and a legal reserve ($66 million pretax) FY12 is adjusted to exclude aircraft impairment ($134 million pretax) and legal reserve reversal ($66 million pretax)FY13 is adjusted to exclude business realignment program costs ($560 million pretax) and aircraft impairment charges ($100 million pretax)

EPS Reconciliation

FY08 FY09 FY11 FY12 FY13

Non GAAP EPS $5.83 $3.76 $4.90 $6.59 $6.23

Impairment and other charges

(2.23) (3.45) (0.33) (0.18) (1.32)

Earnings per share (GAAP) $3.60 $0.31 $4.57 $6.41 $4.91


Free Cash Flow Reconciliation($ in Millions)

FY07 FY08 FY09 FY10 FY11 FY12 FY13Cash provided by operating activities $3,557 $3,465 $2,753 $3,138 $4,041 $4,835 $4,688

Cash used in investing activities ($4,124) ($2,897) ($2,383) ($2,781) ($3,419) ($4,049) ($3,803)

Free Cash Flow ($567) $568 $370 $357 $622 $786 $885Cash from (used in)financing activities $193 ($617) $400 ($692) ($287) ($244) 1,184

Effect of exchange rate changes on cash

$ 6 $1 9 ($17) ($5) $4 1 ($27) $5

Net (decrease) increase in cash and cash equivalents

($368) ($30) $753 ($340) $376 $515 $2,074

ROIC Reconciliation

FY08 FY09 FY11 FY12 FY13ROIC (with adjustments) 8.0% 7.5% 9.2% 11.9% 7.8%Impact of impairment &other chargesROIC (based on GAAPresults)

(2.4%) (3.9%) (0.4%) (0.3%) (1.2%)

5.6% 3.6% 8.8% 11.6% 6.6%

We use a traditional ROIC calculation with adjustments for off-balance-sheet leases: remove implied interest expense from earnings; add present value of lease commitments to invested capital. Cash tax is estimated based on reported current tax provision


roadshow - april 2 2014

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