FDXFedEx

We note you disclosed that your operating results for 2022 were negatively affected by inflationary cost pressures. Please revise to address the following: • Disclose any known trends or uncertainties that have had or are reasonably likely to have a material impact on your cash flows, liquidity, capital resources, cash requirements, financial position, or results of operations arising from, related to, or caused by

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the inflation; • Expand to identify the principal factors contributing to the inflationary pressures you have experienced and clarify the resulting impact to the company; and • Expand your disclosure to identify specific actions planned or taken, if any, to mitigate inflationary pressures.

We acknowledge the Staff’s comment, and respectfully submit that the 2022 Form 10-K includes relevant disclosures regarding inflation, which are discussed in more detail below.

We further acknowledge that, to the extent inflation continues to have a material impact on our business and results of operations, we will continue to update our related disclosures.

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Additionally, to further facilitate ease of reference for users of our financial disclosures, beginning with our

Quarterly Report on Form 10-Q for the first quarter of fiscal 2023 filed on September 22, 2022 (the “Q1 FY23 Form 10-Q”), we consolidated the disclosures regarding trends affecting our business in a new section at the beginning of “Management’s Discussion and Analysis of Results of Operations and Financial Condition,” and we will continue to include such disclosure in future filings.

First Quarter Fiscal 2023 Disclosure:

Trends Affecting our Business

The following trends significantly impact the indicators discussed above, as well as our business and operating results. See the risk factors identified under Part I, Item 1A. “Risk Factors” in our Annual Report, as updated by our quarterly reports on Form 10-Q, for more information. Additionally, see “Results of Operations –

Consolidated Results – Outlook” and “Results of Operations – Consolidated Results – Liquidity Outlook” below for additional information on efforts we are taking to mitigate adverse trends.

Macroeconomic Conditions

While macroeconomic risks apply to most companies, we are particularly vulnerable. The transportation industry is highly cyclical and especially susceptible to trends in economic activity. Our primary business is to transport goods, so our business levels are directly tied to the purchase and production of goods and the rate of growth of global trade. Our results for the first quarter of 2023 were adversely impacted by global volume softness that accelerated in the final weeks of the quarter due to weakening economic conditions.

COVID-19 pandemic

The coronavirus (“COVID-19”) pandemic has had varying impacts on the demand for our services and our business operations. The COVID-19 pandemic continues to disrupt our business, particularly within areas in Asia as lockdowns have persisted into the first quarter of 2023 and contributed to supply chain disruptions (discussed below).

Inflation

Global inflation is well above normal and historical levels, impacting all areas of our business. We are experiencing a decline in demand for our transportation services as price increases are negatively impacting consumer and business spending. Additionally, we are experiencing higher costs to serve through higher fuel prices, wage rates, purchased transportation costs, and other direct operating expenses such as operational supplies. We expect inflation to continue to negatively impact our results of operations for the remainder of 2023.

Supply Chain

Global supply chain disruptions are continuing to impact the economy, including the availability and cost of labor, as well as the supply of industrial goods. As a result, we are experiencing higher labor rates, purchased transportation costs, as well as delayed capital expenditures due to the availability of vehicles, trailers, and other package handling equipment. These disruptions have resulted in increased direct costs and inefficiencies in our network operations.

Fuel

We must purchase large quantities of fuel to operate our aircraft and vehicles, and the price and availability of fuel is beyond our control and can be highly volatile. The timing and amount of fluctuations in fuel prices and our ability to recover incremental fuel costs through our fuel surcharges can significantly impact our operating results. While fuel expense increased during the first quarter of 2023 compared to the first quarter of 2022 due to higher fuel prices, we were able to offset higher prices through yield management actions.

Geopolitical Conflicts

Given the nature of our business and our global operations, geopolitical conflicts may adversely affect our business and results of operations.

The conflict in Russia and Ukraine that began in February 2022 continues as of the date of this quarterly report. The safety of our team members in Ukraine is our top priority. As we focus on the safety of our team members, we have suspended all services in Ukraine, Russia, and Belarus, which has not had and is not expected to have a direct material impact on our business or results of operations. However, the broader consequences of this conflict are adversely affecting the global economy and fuel prices generally, and may also have the effect of heightening other risks disclosed in our Annual Report.

In addition, we have included disclosure in our Q1 FY23 Form 10-Q on pages 22 and 27 related to mitigating actions taken during the quarter, and that we will continue to implement for the remainder of fiscal 2023, to offset volume declines and cost pressures. These actions include continuing to focus on yield management and revenue quality, managing capacity to lower demand levels, including reducing flight frequencies and temporarily parking aircraft at FedEx Express, and reducing Sunday operations, closing select sort operations and taking other linehaul expense actions at FedEx Ground. We are also executing targeted actions to reduce shared and allocated overhead expenses, including lowering variable incentive compensation, reducing vendor utilization, deferring certain projects, and closing certain FedEx Office and corporate office locations. Also, on page 36 we discuss that we are lowering our expected capital expenditures in response to macroeconomic trends in our business.

References to inflation included in the 2022 Form 10-K are as follows:

Known trends or uncertainties arising from, related to, or caused by inflation, including in Part I, Item 1A.

Risk Factors under “Macroeconomic and Market Risks – We are directly affected by the state of the global economy and geopolitical developments” on page 26; “Operating Risks – We are self-insured for certain costs associated with our operations, and insurance and claims expenses could have a material adverse effect on us” on page 29; and “Human Resource Management Risks – Our failure to attract and retain employee talent or maintain our company culture, as well as increases in labor and purchased transportation costs, could adversely impact our business and results of operations” on page 33; and Part II, Item 7. Management’s Discussion and Analysis of Results of Operations and Financial

Condition under “Results of Operations and Outlook – Consolidated Results – Outlook” on page 53 and “Reportable Segments – FedEx Express Segment – FedEx Express Segment Outlook” on page 57.

For example, on page 26 we discuss how our business levels are directly tied to the purchase and production of goods and the rate of growth of global trade – key macroeconomic measurements influenced by, among other things, inflation and deflation. On pages 29 and 33 we discuss the effect inflation can have on our self-insurance accruals and labor and purchased transportation costs. Additionally, on page 53 we discuss the expected continued impact of slowing economic conditions (largely due to inflation) on our volumes and inflationary pressures on our costs in fiscal 2023. Details regarding the expected impacts of inflation at FedEx Express during fiscal 2023 are included on page 57.

The principal factors contributing to the inflationary pressures we have experienced and the resulting impact to

FedEx, including in Part II, Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition under “Results of Operations and Outlook – Consolidated Results – Overview” on page 47, “ –

Revenue” on page 50, “ – Operating Expenses” on page 51, “ – Fuel” on page 51, “Reportable Segments – FedEx Express Segment – FedEx Express Segment Operating Income” on page 57, “–

FedEx Ground Segment – FedEx Ground Segment Operating Income” on page 59, and “ – FedEx Freight Segment – FedEx Freight Segment Operating Income” on pages 60-61.

For example, on page 51 we discuss generally how the challenging labor market and inflationary pressures contributed to increases in purchased transportation, salaries and employee benefits, and other operating expenses, and how higher fuel surcharges contributed to increased purchased transportation costs, in fiscal 2022.

Details regarding the impact of inflation at FedEx Express, FedEx Ground, and FedEx Freight during fiscal 2022 is included on pages 57 and 59-61.

Specific actions planned or taken to mitigate inflationary pressures, including in Part II, Item 7.

Management’s Discussion and Analysis of Results of Operations and Financial Condition under “Results of Operations and Outlook – Consolidated Results – Overview” on page 46, “ – Revenue” on page 50, “

– Fuel” on page 51, “ –Outlook” on page 53, “Reportable Segments – FedEx Express Segment – FedEx Express Segment Revenue” on page 56, “ – FedEx Express Segment Operating Income” on page 57,

“ – FedEx Express Segment Outlook” on page 57, “ – FedEx Ground Segment – FedEx Ground Segment Revenue” on page 58, “ – FedEx Ground Segment Operating Income” on page 59, “ – FedEx Ground

Segment Outlook” on page 59, “ – FedEx Freight Segment – FedEx Freight Segment Revenue” on page 60, “ – FedEx Freight Segment Operating Income” on pages 60-61, “

– FedEx Freight Segment Outlook” on page 61, and “Financial Condition – Liquidity Outlook” on page 64.

For example, on pages 46, 50, 56, 58, 59, and 60, we discuss yield management actions as well as a mix shift to our higher yielding services due to strategic actions to improve revenue quality, which led to revenue and operating income growth in fiscal 2022 despite the increased costs due to inflationary pressures discussed above. Additional strategic actions intended, in whole or in part, to mitigate inflationary pressures are discussed on pages 53, 57, 59, and 61, including continuing to manage network capacity to demand levels, flexing our network, and making adjustments as needed to align operating costs to volumes, and continuing to execute targeted actions to improve productivity and lower costs both through advanced technology and optimization of operations. Additionally, on page 64 we note that we are continuing to actively manage and optimize our capital allocation due to inflationary pressures and other factors.

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We note you disclosed that labor market challenges contributed to global supply chain disruptions and affected the availability and cost of labor resulting in network inefficiencies, higher purchased transportation costs, and higher wage rates in 2022.

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You also state that disruptions in global supply chains could limit the access of FedEx and your service providers to vehicles and other key capital resources and increase your costs. Please revise to address the following: • Discuss whether supply chain disruptions materially affect your outlook or business goals. Specify whether these challenges have materially impacted your results of operations or capital resources and quantify, to the extent possible, how your sales, profits, and/or liquidity have been impacted; mitigate supply chain pressures; • Revise to discuss known trends or uncertainties resulting from mitigation efforts undertaken, if any; and • Explain whether any mitigation efforts introduce new material risks, related to service quality or reliability.

relevant disclosures regarding supply chain disruptions, which are discussed in more detail below.

We further acknowledge that, to the extent supply chain disruptions continue to have a material impact on our business and results of operations, we will continue to update our related disclosures. Additionally, as noted above we included a new separately captioned section consolidating our disclosure regarding trends affecting our business in our Q1 FY23 Form 10-Q, and we will continue to include such disclosure in future filings.

References to supply chain disruptions included in the 2022

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Form 10-K are as follows:

The effect of supply chain disruptions on our results of operations and outlook, including Part II, Item 7.

Management’s Discussion and Analysis of Results of Operations and Financial Condition under “Results of Operations and Outlook – Consolidated Results – Overview” on page 47, “ – Outlook” on page 53, and

“Financial Condition – Liquidity Outlook” on page 64.

For example, on page 47 we discuss how labor market challenges contributed to global supply chain disruptions and affected the availability and cost of labor resulting in network inefficiencies, higher purchased transportation costs, and higher wage rates during fiscal 2022. On page 53 we note that uncertainty regarding the impact a slowing global economy, geopolitical challenges, and the continuing effect of the COVID-19 pandemic will have on supply chains and other factors make expectations regarding fiscal 2023 inherently less certain. While these factors negatively impacted our business and results of operations during fiscal 2022, we are not able to quantify their direct impact.

Known trends or uncertainties arising from, related to, or caused by supply chain disruptions , including in Part

I, Item 1A. Risk Factors under “Macroeconomic and Market Risks – We are directly affected by the state of the global economy and geopolitical developments” on page 26; “Operating Risks – The continuing impact of the COVID-19 pandemic on our business, results of operations, and financial condition is highly unpredictable” on page 28; “Human Resource Management Risks – Our failure to attract and retain employee talent or maintain our company culture, as well as increases in labor and purchased transportation costs, could adversely impact our business and results of operations” on page 33; “Environmental, Climate, and Weather Risks – Our inability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography could adversely impact our business and results of operations” on page 35; and “Other Legal,

Regulatory, and Miscellaneous Risks” on page 37.

For example, on page 26 we discuss how our business levels are directly tied to the purchase and production of goods and the rate of growth of global trade – key macroeconomic measurements influenced by, among other things, supply chain disruptions. On page 28 we discuss the varying impacts the COVID-19 pandemic has had on the global economy and supply chains and on page 35 we discuss risks related to supply chain disruptions that could result from adverse weather or a localized disaster or disturbance in a key geography. Additionally, on page 37 we discuss the risk that disruptions in global supply chains could potentially limit the access of FedEx and our service providers to vehicles and other key capital resources and increase our costs. However, we did not believe limitation of such access due to supply chain disruptions had materially affected, or would prospectively materially affect, our results of operations at the time we filed the 2022 Form

10-K.

Actions planned or taken to mitigate supply chain pressures, including in Part II, Item 7. Management’s

Discussion and Analysis of Results of Operations and Financial Condition under “Results of Operations and Outlook – Consolidated Results – Outlook” on page 53, “Reportable Segments – FedEx Express Segment –FedEx

Express Segment Outlook” on page 57, “ – FedEx Ground Segment – FedEx Ground Segment Outlook” on page 59, “ – FedEx Freight Segment – FedEx Freight Segment Outlook” on page 61, and “Financial

Condition – Liquidity Outlook” on page 64.

Strategic actions intended, in whole or in part, to mitigate supply chain pressures are discussed on pages 53, 57, 59, and 61, including continuing to manage network capacity to demand levels, flexing our network and making adjustments as needed to align operating costs to volumes, and continuing to execute targeted actions to improve productivity and lower costs both through advanced technology and optimization of operations. Additionally, on page 64 we note that we are continuing to actively manage and optimize our capital allocation due to supply chain constraints and other factors.

We did not believe that these mitigation efforts introduced any new material trends or uncertainties or risks related to service quality or reliability at the time we filed the 2022 Form 10-K.

We acknowledge that

FedEx and its management are responsible for the accuracy and adequacy of FedEx’s disclosures, notwithstanding any review, comments, action, or absence of action by the Staff.

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In your letter to us dated March 11, 2014, you described contacts with Syria and Sudan. We note that your FedEx Small Business Center website provides a list of Syria import and export restrictions. As you are aware, Syria and Sudan are designated by the State Department as state sponsors of terrorism and are subject to U.S. economic sanctions and export controls.

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Please describe to us the nature and extent of past, current, and anticipated contacts with Syria and Sudan since your prior letter, whether through subsidiaries, affiliates, distributors, resellers or other direct or indirect arrangements. We note that Syria YP’s website provides an address in Damascus, Syria for FedEx, and it provides a link to FedEx’s website; and USGoBuy and My Germany’s websites provide information for shipping to Syria and Sudan via FedEx. You should describe any products, services, technology or components you have provided to Syria and Sudan, directly or indirectly, and any agreements, commercial arrangements, or other contacts with the governments of those countries or entities they control.

FedEx Small Business Center Website; Third-Party Websites in Syria, Germany and the United States

As discussed in more detail below, we currently do not provide any transportation services to or from Syria or Sudan, and our website (fedex.com) indicates that we do not provide such services. However, the FedEx Small Business Center website inadvertently provided information regarding import and export restrictions pertaining to Syria.

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In order to avoid any inference – through the provision of such information – that we provide transportation services to or from Syria, we have removed the Syria information page from the FedEx Small Business Center website. We also have removed Syria from the overall country list on the FedEx Small

Business Center website for which country profiles are available.

We are generally aware that freight forwarding and shipping companies sometimes falsely purport to offer FedEx shipping services to Syria and Sudan on their own or other websites. Upon becoming aware of such false references on third-party websites, we work with appropriate parties to promptly remove such references. We contacted the operator of the SyriaYP.com website and requested that any references to FedEx be removed. We also contacted the operators of the myGermany.com and USGoBuy.com websites and requested that any references to FedEx shipping services to Syria or Sudan be removed. As of the date of this letter, references to FedEx have been removed from the SyriaYP.com website and references to FedEx shipping services to Syria or Sudan have been removed from the other two websites.

We will continue to work to remove unauthorized references to FedEx shipping services on third-party websites throughout the world. This is an ongoing endeavor, as unauthorized and false website references to FedEx services are commonplace, especially in foreign jurisdictions. In addition, we have noted on our own website that customers and other stakeholders and interested parties should not rely on information from third-party websites regarding FedEx services that contradicts the service information that we publish.

Contacts with Syria

There has been no change with respect to our contacts with Syria since our March 11, 2014 letter to the Commission. We do not provide, directly or indirectly, any transportation services to or from Syria. FedEx has never had any assets or employees in Syria, any flights to, from or within Syria or any direct operations in Syria. TNT Express, our subsidiary that we acquired on

May 25, 2016 (the “Acquisition Date”), has had no assets or employees in Syria, and has not provided, directly or indirectly, any transportation services to or from Syria, since the Acquisition Date. Until such time that we may legally resume transportation services to and from Syria, we will not provide such services.

Due to U.S. government restrictions, our aircraft currently do not fly through airspace controlled by Syria. Prior to these restrictions becoming effective, our aircraft occasionally flew through Syrian airspace (in accordance with relevant U.S. sanction laws and regulations and U.S. Federal Aviation

Administration directives), as a result of which we made immaterial payments – called overflight fees – to the Syrian government. Such payments were not prohibited by U.S. law or sanctions policy. We made the payments to Hadid International Services, based in Dubai, which in turn paid the Syrian government. We paid overflight fees in fiscal 2014 relating to two flights in fiscal 2013. We also paid one overflight fee in fiscal 2015 relating to a single flight in May 2014 that was required to divert into Syrian airspace due to safety and weather concerns, in compliance with applicable U.S. restrictions and regulations.

If U.S. government restrictions pertaining to Syrian airspace are lifted, our aircraft may resume occasionally flying through airspace controlled by Syria.

To the best of our knowledge, we do not have any other contacts with the Syrian government or entities affiliated with the Syrian government.

Our wholly owned subsidiary FedEx Trade Networks, Inc., through its wholly owned subsidiary FedEx Trade Networks Transport & Brokerage, Inc.

(collectively, “FTN”), continues to offer customs brokerage services for certain goods of Syrian origin being imported into the United States and Canada, as permitted by U.S. law and sanctions policy. FTN provided customs brokerage services in April 2015 for one shipment from Dubai, United Arab Emirates to New York that was said to contain one item of Syrian origin (a wooden sculpture). This shipment qualified as an exempt transaction under the Syrian Sanctions Regulations (31

C.F.R. §§ 542.211(b) and 542.307(a)) and was allowed to proceed. To the best of our knowledge, since our March 11, 2014 letter to the Commission, FTN has not provided customs brokerage services for any other shipments containing items of Syrian origin.

Contacts with Sudan

There has been no change with respect to our contacts with Sudan since our March 11, 2014 letter to the Commission. We do not provide, directly or indirectly, any transportation services to or from Sudan, and we do not plan to provide any such services in the future. FedEx has never had any assets or employees in Sudan, any flights to, from or within Sudan or any direct operations in Sudan.

Our subsidiary TNT Express has had no assets or employees in Sudan, and has not provided, directly or indirectly, any transportation services to or from Sudan, since the Acquisition Date.

Our aircraft may occasionally fly through airspace controlled by Sudan, as a result of which we may pay immaterial overflight fees to the Sudanese government.

Such payments are not prohibited by U.S. law or sanctions policy. As with Syria, we make any such payments through Hadid International Services. As we previously disclosed, our aircraft flew through Sudanese airspace four times between January 2011 and March 2014 for charter flights. Hadid International Services sent us invoices for those four charter flights in June 2016 (for fiscal 2012 overflights) and September 2016 (for fiscal 2014 overflights). Upon receipt of these invoices, we became obligated to pay the applicable overflight fees, and we made such payments in fiscal 2017. Since our March 11, 2014 letter to the Commission, our aircraft have not flown through Sudanese airspace.

To the best of our knowledge, we do not have any other contacts with the Sudanese government or entities affiliated with the Sudanese government.

We have comprehensive export controls and economic sanctions programs designed to ensure compliance with U.S. and other applicable export laws, rules and regulations. As part of our ongoing efforts to monitor the effectiveness of our international trade compliance programs, in January 2017 FTN identified one August 2013 shipment from the United States to Canada for which FTN provided customs brokerage services and which contained items of Sudanese origin. The items – one piece of jewelry valued at $3 and four containers of dry spices valued at $20 – were identified as gifts, and qualified as an authorized transaction under the Sudanese Sanctions Regulations (31 C.F.R. § 538.510).

FTN continues to offer customs brokerage services for certain goods of Sudanese origin being imported into the United States and Canada, as permitted by U.S. law and sanctions policy. To the best of our knowledge, since our March 11, 2014 letter to the Commission, FTN has not provided customs brokerage services for any shipments containing items of Sudanese origin.

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Please discuss the materiality of any contacts with Syria and Sudan you describe in response to the comment above, and whether those contacts constitute a material investment risk for your security holders. You should address materiality in quantitative terms, including the approximate dollar amounts of any associated revenues, assets, and liabilities for the last three fiscal years and the subsequent interim

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period. Also, address materiality in terms of qualitative factors that a reasonable investor would deem important in making an investment decision, including the potential impact of corporate activities upon a company’s reputation and share value. As you know, various state and municipal governments, universities, and other investors have proposed or adopted divestment or similar initiatives regarding investment in companies that do business with U.S.-designated state sponsors of terrorism. You should address the potential impact of the investor sentiment evidenced by such actions directed toward companies that have operations associated with Syria and Sudan.

As discussed above, we currently do not provide transportation services to or from Syria or Sudan. Our only contacts with Syria and Sudan are in connection with the indirect and legal payment of overflight fees (subject, however, to the current restrictions regarding Syria, as discussed above) and our provision of customs brokerage services for shipments that contain goods with an origin in Syria or Sudan.

The following table sets forth the overflight fees paid to Syria and Sudan (which include the services fees of the third-party payment agent) during our past three fiscal years ended May

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31 and for the eight-month period ended January 31, 2017:

FY2017 (8 months)

FY2016

FY2015

FY2014

Syria

$

533

(a)

1,358

(b)

Sudan

15,773

(c)

Payment relates to a single flight that occurred in fiscal 2014 that was required to divert into Syrian airspace due to safety and weather concerns, in compliance with applicable U.S. restrictions and regulations.

Payment relates to flights that occurred in fiscal 2013.

Payment relates to flights that occurred in fiscal 2012 (for which we received invoices in June 2016) and fiscal 2014 (for which we received invoices in September 2016).

The aggregate net revenue for these customs brokerage services and the overflight fee amounts are both inconsequential.

Based upon these quantitative and qualitative factors, and given that we have received few investor inquiries in this area, we do not believe that such contacts have had or will have any impact on investor sentiment or our reputation or share value. We are certainly sensitive to the concerns of our investors, however, and we will continue to monitor investor sentiment and activity in this area, as we routinely do in many other areas.

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Please revise your next earnings release to begin your reconciliations with GAAP results rather than non-GAAP results. See Question 102.10 of the updated Non-GAAP Compliance and Disclosure Interpretations issued on May 17, 2016.

We will revise in future filings the format of our reconciliation tables to begin with GAAP results. Read in the reply ↗

Revise your disclosure of usefulness of non-GAAP measures to investors to provide a more substantive and concise discussion of how each of your non-GAAP measures are useful to investors. Also, consider balancing your claims that the non-GAAP measures are “more meaningful,” “more accurate,” and “better” than comparable GAAP measures by also disclosing the limitations of the measures.

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Please provide us with your proposed changes in your response letter.

Our 8-K includes a discussion of our presented non-GAAP financial measures and why we believe they are useful to investors. However, to the extent applicable in future filings, we will modify our discussion as follows:

The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or

“reported”).

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We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAAP (or “adjusted”) financial measures, including our fourth quarter and adjusted full-year fiscal

2016 and 2015 consolidated operating income and margin, net income and earnings per share, and adjusted fourth quarter and full-year fiscal 2015 FedEx Express segment operating income and margin. These financial measures have been adjusted to exclude the impact of the following transactions (as applicable):

•

The year-end mark-to-market (“MTM”) accounting adjustments (non-cash) for our defined benefit pension and other postretirement plans;

The adjustment (non-cash) in “Corporate, eliminations and other” resulting from the change in recognizing expected return on plan assets for our defined benefit pension and other postretirement plans at the segment level associated with the adoption of MTM accounting in fiscal 2015;

Expenses in connection with the settlement of (and certain expected losses relating to) independent contractor litigation matters involving FedEx Ground, net of recognized insurance recovery;

Expenses in connection with the settlement of a U.S. Customs and Border Protection matter involving FedEx Trade Networks, net of recognized insurance recovery;

Mr. Andrew Mew

Expenses associated with the acquisition, financing and integration of TNT Express B.V. (“TNT Express”) and its operating results from the date of acquisition, net of any tax impact, including the income tax impact of an internal corporate legal entity restructuring to facilitate the integration of FedEx Express and TNT Express that is presented as a separate item herein; and

Aircraft impairment and related charges incurred in the fourth quarter of fiscal 2015.

The

MTM accounting-related adjustments are excluded from our non-GAAP financial measures because these non-cash items are unrelated to our core operating performance.

The litigation-related matters are excluded from our non-GAAP financial measures because they are unrelated to our core operating performance and to assist investors with assessing trends in our underlying businesses.

The TNT Express expense items, as well as the income tax impact of an internal corporate legal entity restructuring to facilitate the integration of FedEx Express and TNT Express, are excluded from our non-GAAP financial measures because these items impacted the year-over-year comparability of our financial statements and are not related to our core operating performance. We excluded TNT Express operating results from the date of acquisition from our non-GAAP financial measures because it was acquired on May 25, 2016 (six days before the end of our fiscal year), and its financial results were immaterial from the date of acquisition and not presented as a separate segment.

The aircraft impairment and related charges are excluded from our non-GAAP financial measures to allow users of our financial statements to assess trends in our underlying businesses.

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 these non-GAAP financial measures in making financial, operating and planning decisions and evaluating the company’s and each business segment’s ongoing performance.

Our non-GAAP 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 these non-GAAP financial measures. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures 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 presented non-GAAP financial measures to the most directly comparable GAAP measures.

We will continue to evaluate the appropriateness of these disclosures and update as appropriate.

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You exclude the impact of the operations of TNT Express from the date of acquisition as well as the tax impact of the corporate restructuring for the TNT acquisition from Adjusted Earnings in the fourth quarter of 2016. Please tell us why you believe excluding the ongoing operating results of TNT is indicative of your ongoing business operations.

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Also, clarify whether you have excluded the tax impact of the corporate restructuring but not the actual impact of the restructuring from the non-GAAP measure Adjusted Earnings. See Questions 100.01 and 102.11 of the updated Non-GAAP Compliance and Disclosure Interpretations issued on May 17, 2016.

We acquired TNT Express on May 25, 2016. Because TNT Express was acquired so late in our fiscal year ended

May 31, 2016 (“fiscal 2016”), its financial results were immaterial and not reported as a separate segment for fiscal 2016.

During fiscal 2016 we incurred significant expenses related to our acquisition of TNT Express, including transaction, financing and integration planning expenses.

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Since these items impacted the year-over-year comparability of our financial statements and were not related to our existing business operations for fiscal 2016, we excluded these expenses from our Adjusted Earnings.

Since we owned TNT Express for only six days during fiscal 2016, and its financial results were immaterial and not presented as a separate segment, we also excluded from our Adjusted Earnings its financial results from the date of acquisition.

Excluding these items related to TNT Express from our Adjusted Earnings allowed users of our financial statements to assess our year-over-year performance in a manner that is consistent with how they have historically viewed our business and how we provided earnings guidance throughout fiscal 2016.

For our fiscal year ending May 31, 2017 (“fiscal 2017”), beginning with our earnings release dated September 20, 2016, we are presenting TNT Express as a separate segment and accordingly, are not excluding its base business results from our fiscal 2017 Adjusted Earnings.

The income tax benefit of $76 million excluded from our Adjusted Earnings resulted from an internal corporate restructuring (i.e., a legal entity realignment) to facilitate the integration of FedEx Express and TNT Express. This item related to a legal entity restructuring only, so there were no restructuring costs associated with this item.

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