String objects count SCJP

Another exam question that makes me confused:

public String makinStrings() {
 String s = “Fred”;
 s = s + “47”;
 s = s.substring(2, 5);
 s = s.toUpperCase();
 return s.toString();
}

the question is: "How many String objects will be created when this method is invoked?"

correct answer is supposed to be 3 but I counted more:

Fred

47

Fred47

ed4

ED4

is 3 really the correct answer? If so - why?