We are required to present condensed consolidating financial information in order for the subsidiary guarantors of our public debt to continue to be exempt from reporting under the Securities Exchange Act of 1934, as amended.

The guarantor subsidiaries, which are 100% owned by FedEx, guarantee $17.5 billion of our public debt. The guarantees are full and unconditional and joint and several. Our guarantor subsidiaries were not determined using geographic, service line or other similar criteria, and as a result, the “Guarantor Subsidiaries” and “Non-guarantor Subsidiaries” columns each include portions of our domestic and international operations. Accordingly, this basis of presentation is not intended to present our financial condition, results of operations or cash flows for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting.

Condensed consolidating financial statements for our guarantor subsidiaries and non-guarantor subsidiaries are presented in the following tables (in millions):

	Parent		Guarantor Subsidiaries			Non- guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	826	$	158		$	1,381	$	(46	)	$	2,319
Receivables, less allowances		56		5,603			3,684		(227	)		9,116
Spare parts, supplies, fuel, prepaid expenses and other, less allowances		366		953			332		—			1,651
Total current assets		1,248		6,714			5,397		(273	)		13,086
PROPERTY AND EQUIPMENT, AT COST		25		55,341			4,145		—			59,511
Less accumulated depreciation and amortization		17		27,066			1,999		—			29,082
Net property and equipment		8		28,275			2,146		—			30,429
INTERCOMPANY RECEIVABLE		2,877		(405	)		—		(2,472	)		—
GOODWILL		—		1,589			5,295		—			6,884
INVESTMENT IN SUBSIDIARIES		33,725		5,449			—		(39,174	)		—
OTHER ASSETS		995		1,811			1,789		(591	)		4,004
	$	38,853	$	43,433		$	14,627	$	(42,510	)	$	54,403
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	959	$	2		$	3	$	—		$	964
Accrued salaries and employee benefits		143		1,100			498		—			1,741
Accounts payable		16		1,469			1,808		(263	)		3,030
Accrued expenses		521		1,853			914		(10	)		3,278
Total current liabilities		1,639		4,424			3,223		(273	)		9,013
LONG-TERM DEBT, LESS CURRENT PORTION		16,322		287			8		—			16,617
INTERCOMPANY PAYABLE		—		—			2,472		(2,472	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		2,832			580		(591	)		2,821
Other liabilities		3,135		3,965			1,095		—			8,195
Total other long-term liabilities		3,135		6,797			1,675		(591	)		11,016
COMMON STOCKHOLDERS’ INVESTMENT		17,757		31,925			7,249		(39,174	)		17,757
	$	38,853	$	43,433		$	14,627	$	(42,510	)	$	54,403

CONDENSED CONSOLIDATING BALANCE SHEETS

May 31, 2018

	Parent		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,485	$	257	$	1,538	$	(15	)	$	3,265
Receivables, less allowances		3		4,970		3,586		(78	)		8,481
Spare parts, supplies, fuel, prepaid expenses and other, less allowances		425		878		292		—			1,595
Total current assets		1,913		6,105		5,416		(93	)		13,341
PROPERTY AND EQUIPMENT, AT COST		21		51,232		3,868		—			55,121
Less accumulated depreciation and amortization		17		25,111		1,839		—			26,967
Net property and equipment		4		26,121		2,029		—			28,154
INTERCOMPANY RECEIVABLE		1,487		924		—		(2,411	)		—
GOODWILL		—		1,709		5,264		—			6,973
INVESTMENT IN SUBSIDIARIES		33,370		4,082		—		(37,452	)		—
OTHER ASSETS		75		1,854		1,829		104			3,862
	$	36,849	$	40,795	$	14,538	$	(39,852	)	$	52,330
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	1,332	$	1	$	9	$	—		$	1,342
Accrued salaries and employee benefits		65		1,506		606		—			2,177
Accounts payable		16		1,332		1,719		(90	)		2,977
Accrued expenses		460		1,778		896		(3	)		3,131
Total current liabilities		1,873		4,617		3,230		(93	)		9,627
LONG-TERM DEBT, LESS CURRENT PORTION		14,942		288		13		—			15,243
INTERCOMPANY PAYABLE		—		—		2,411		(2,411	)		—
OTHER LONG-TERM LIABILITIES
Deferred income taxes		—		2,626		137		104			2,867
Other liabilities		619		3,432		1,126		—			5,177
Total other long-term liabilities		619		6,058		1,263		104			8,044
COMMON STOCKHOLDERS’ INVESTMENT		19,415		29,832		7,621		(37,452	)		19,416
	$	36,849	$	40,795	$	14,538	$	(39,852	)	$	52,330

	Parent			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	50,431		$	19,643		$	(381	)	$	69,693
OPERATING EXPENSES:
Salaries and employee benefits		138			19,055			5,583			—			24,776
Purchased transportation		—			10,344			6,494			(184	)		16,654
Rentals and landing fees		6			2,582			779			(7	)		3,360
Depreciation and amortization		1			2,877			475			—			3,353
Fuel		—			3,587			302			—			3,889
Maintenance and repairs		1			2,475			360			(2	)		2,834
Business realignment costs		320			—			—			—			320
Intercompany charges, net		(765	)		(861	)		1,626			—			—
Other		299			6,674			3,256			(188	)		10,041
		—			46,733			18,875			(381	)		65,227
OPERATING INCOME		—			3,698			768			—			4,466
OTHER (EXPENSE) INCOME:
Equity in earnings of subsidiaries		540			174			—			(714	)		—
Interest, net		(586	)		54			3			—			(529	)
Other retirement plans expense		—			(2,675	)		(576	)		—			(3,251	)
Intercompany charges, net		606			(442	)		(164	)		—			—
Other, net		(20	)		53			(64	)		—			(31	)
INCOME (LOSS) BEFORE INCOME TAXES		540			862			(33	)		(714	)		655
Provision for income taxes		—			77			38			—			115
NET INCOME (LOSS)	$	540		$	785		$	(71	)	$	(714	)	$	540
COMPREHENSIVE INCOME (LOSS)	$	453		$	838		$	(324	)	$	(714	)	$	253

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Year Ended May 31, 2018

	Parent			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	48,601		$	17,256		$	(407	)	$	65,450
OPERATING EXPENSES:
Salaries and employee benefits		149			18,380			5,266			—			23,795
Purchased transportation		—			9,134			6,191			(224	)		15,101
Rentals and landing fees		5			2,587			776			(7	)		3,361
Depreciation and amortization		1			2,644			450			—			3,095
Fuel		—			3,077			297			—			3,374
Maintenance and repairs		1			2,294			327			—			2,622
Goodwill and other asset impairment charges		—			—			380			—			380
Intercompany charges, net		(437	)		(125	)		562			—			—
Other		281			6,227			3,118			(176	)		9,450
		—			44,218			17,367			(407	)		61,178
OPERATING INCOME (LOSS)		—			4,383			(111	)		—			4,272
OTHER (EXPENSE) INCOME:
Equity in earnings of subsidiaries		4,572			62			—			(4,634	)		—
Interest, net		(541	)		46			(15	)		—			(510	)
Other retirements plans income		—			547			51			—			598
Intercompany charges, net		544			(296	)		(248	)		—			—
Other, net		(3	)		(120	)		116			—			(7	)
INCOME (LOSS) BEFORE INCOME TAXES		4,572			4,622			(207	)		(4,634	)		4,353
Provision for income taxes (benefit)		—			309			(528	)		—			(219	)
NET INCOME (LOSS)	$	4,572		$	4,313		$	321		$	(4,634	)	$	4,572
COMPREHENSIVE INCOME (LOSS)	$	4,489		$	4,263		$	291		$	(4,634	)	$	4,409

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Year Ended May 31, 2017

	Parent			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
REVENUES	$	—		$	44,823		$	15,798		$	(302	)	$	60,319
OPERATING EXPENSES:
Salaries and employee benefits		123			17,137			4,729			—			21,989
Purchased transportation		—			8,260			5,495			(125	)		13,630
Rentals and landing fees		5			2,517			724			(6	)		3,240
Depreciation and amortization		1			2,538			456			—			2,995
Fuel		—			2,476			297			—			2,773
Maintenance and repairs		1			2,086			287			—			2,374
Intercompany charges, net		(434	)		179			255			—			—
Other		304			5,734			2,885			(171	)		8,752
		—			40,927			15,128			(302	)		55,753
OPERATING INCOME		—			3,896			670			—			4,566
OTHER (EXPENSE) INCOME:
Equity in earnings of subsidiaries		2,997			68			—			(3,065	)		—
Interest, net		(507	)		27			1			—			(479	)
Other retirements plans (expense) income		—			516			(45	)		—			471
Intercompany charges, net		508			(299	)		(209	)		—			—
Other, net		(1	)		(134	)		156			—			21
INCOME (LOSS) BEFORE INCOME TAXES		2,997			4,074			573			(3,065	)		4,579
Provision for income taxes		—			1,439			143			—			1,582
NET INCOME (LOSS)	$	2,997		$	2,635		$	430		$	(3,065	)	$	2,997
COMPREHENSIVE INCOME (LOSS)	$	2,922		$	2,580		$	314		$	(3,065	)	$	2,751

	Parent			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	66		$	4,885		$	693		$	(31	)	$	5,613
INVESTING ACTIVITIES
Capital expenditures		(6	)		(4,920	)		(564	)		—			(5,490	)
Business acquisitions, net of cash acquired		—			(9	)		(57	)		—			(66	)
Proceeds from asset dispositions and other		(45	)		101			27			—			83
CASH USED IN INVESTING ACTIVITIES		(51	)		(4,828	)		(594	)		—			(5,473	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		193			(259	)		66			—			—
Payment on loan between subsidiaries		51			—			(51	)		—			—
Intercompany dividends		—			106			(106	)		—			—
Principal payments on debt		(1,310	)		(117	)		(9	)		—			(1,436	)
Proceeds from debt issuances		2,463			—			—			—			2,463
Proceeds from stock issuances		101			—			—			—			101
Dividends paid		(683	)		—			—			—			(683	)
Purchase of treasury stock		(1,480	)		—			—			—			(1,480	)
Other, net		(9	)		127			(122	)		—			(4	)
CASH USED IN FINANCING ACTIVITIES		(674	)		(143	)		(222	)		—			(1,039	)
Effect of exchange rate changes on cash		—			(13	)		(34	)		—			(47	)
Net decrease in cash and cash equivalents		(659	)		(99	)		(157	)		(31	)		(946	)
Cash and cash equivalents at beginning of period		1,485			257			1,538			(15	)		3,265
Cash and cash equivalents at end of period	$	826		$	158		$	1,381		$	(46	)	$	2,319

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Year Ended May 31, 2018

	Parent			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	(2,837	)	$	6,767		$	712		$	32		$	4,674
INVESTING ACTIVITIES
Capital expenditures		(1	)		(5,299	)		(363	)		—			(5,663	)
Business acquisitions, net of cash acquired		—			(44	)		(135	)		—			(179	)
Proceeds from sale of business		—			—			123			—			123
Proceeds from asset dispositions and other		(6	)		33			15			—			42
CASH USED IN INVESTING ACTIVITIES		(7	)		(5,310	)		(360	)		—			(5,677	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		1,529			(1,612	)	83				—			—
Payment on loan between subsidiaries		663			—			(663	)		—			—
Intercompany dividends		—			98			(98	)		—			—
Principal payments on debt		—			(22	)		(16	)		—			(38	)
Proceeds from debt issuance		1,480			—			—			—			1,480
Proceeds from stock issuances		327			—			—			—			327
Dividends paid		(535	)		—			—			—			(535	)
Purchase of treasury stock		(1,017	)		—			—			—			(1,017	)
Other, net		3			7			—			—			10
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		2,450			(1,529	)		(694	)		—			227
Effect of exchange rate changes on cash		(5	)		4			73			—			72
Net increase (decrease) in cash and cash equivalents		(399	)		(68	)		(269	)		32			(704	)
Cash and cash equivalents at beginning of period		1,884			325			1,807			(47	)		3,969
Cash and cash equivalents at end of period	$	1,485		$	257		$	1,538		$	(15	)	$	3,265

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Year Ended May 31, 2017

	Parent			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	(1,155	)	$	5,254		$	835		$	(4	)	$	4,930
INVESTING ACTIVITIES
Capital expenditures		—			(4,694	)		(422	)		—			(5,116	)
Proceeds from asset dispositions and other		34			25			76			—			135
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		34			(4,669	)		(346	)		—			(4,981	)
FINANCING ACTIVITIES
Net transfers from (to) Parent		421			(518	)		97			—			—
Payment on loan between subsidiaries		41			(15	)		(26	)		—			—
Intercompany dividends		—			1			(1	)		—			—
Principal payments on debt		—			(55	)		(27	)		—			(82	)
Proceeds from debt issuances		1,190			—			—			—			1,190
Proceeds from stock issuances		337			—			—			—			337
Dividends paid		(426	)		—			—			—			(426	)
Purchase of treasury stock		(509	)		—			—			—			(509	)
Other, net		(12	)		(13	)		43			—			18
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		1,042			(600	)		86			—			528
Effect of exchange rate changes on cash		(11	)		14			(45	)		—			(42	)
Net increase (decrease) in cash and cash equivalents		(90	)		(1	)		530			(4	)		435
Cash and cash equivalents at beginning of period		1,974			326			1,277			(43	)		3,534
Cash and cash equivalents at end of period	$	1,884		$	325		$	1,807		$	(47	)	$	3,969