FDX FedEx Corp

On May 3, 2018, FedEx Corporation (the “Company”) entered into a commitment agreement (the “Agreement”), by and among the Company, Metropolitan Life Insurance Company (“MetLife”) and State Street Global Advisors Trust Company (“State Street”), acting solely in its capacity as the independent fiduciary of the FedEx Corporation Employees’ Pension Plan and the FedEx Freight Pension Plan (the “Pension Plans”). State Street Bank and Trust Company serves as trustee to the Pension Plans. Under the Agreement, the Company will purchase a group annuity contract from MetLife and transfer to MetLife the future benefit obligations and annuity administration for certain retirees and beneficiaries under the Pension Plans (“Transferred Participants”).

Upon issuance of the group annuity contract, the pension benefit obligations and annuity administration for approximately 41,000 Transferred Participants will be irrevocably transferred from the Pension Plans to MetLife, which will guarantee the pension benefits of the Transferred Participants. By transferring these obligations to MetLife, the Company will reduce its U.S. pension plan liabilities by approximately $6 billion. The purchase of the group annuity contract will be funded directly by assets of the Pension Plans. As a result of the transaction, the Company expects to recognize a one-time non-cash pension settlement charge, which will be included in the fiscal 2018 year-end mark-to-market pension accounting adjustments that will be reported in the Company’s fiscal 2018 fourth quarter earnings release.

The transaction contemplated by the Agreement is subject to closing conditions that are customary for transactions of this nature, including certain termination clauses. Assuming all of the closing conditions are met, the Company expects the purchase of the irrevocable group annuity contract to be completed on May 10, 2018. At that time, MetLife will become responsible for payment of Transferred Participants’ monthly pension benefits. Transferred Participants will continue to receive their benefits from the Pension Plans’ trustee until August 1, 2018, at which time it is intended that MetLife will assume responsibility for administrative services, including distribution of payments to the Transferred Participants.

The foregoing summary of the Agreement is qualified in its entirety by reference to the text of the Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ending May 31, 2018.

Certain statements in this Current Report on Form 8-K may be considered forward-looking statements, such as statements regarding management’s views with respect to future events relating to and the financial impact of the Agreement. Such forward-looking statements are subject to risks, uncertainties and other factors that 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, the satisfaction or waiver of all closing conditions contained in the Agreement, without unexpected delays or conditions; FedEx’s ability to realize, or realize in the expected time frame, the anticipated benefits from the transaction, or the amount of the expected settlement charge; and other factors that 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.