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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q

(Mark One)


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~February 28~~August 31, 2025


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO__________

Commission File Number: 1-15829

FedEx Corporation (Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)


Delaware			62-1721435
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

942 South Shady Grove Road, Memphis, Tennessee			38120
(Address of principal executive offices)			(ZIP Code)

Registrant’s telephone number, including area code: (901) 818-7500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

~~Trading Symbol~~

~~Name of each exchange on which registered~~

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.10 per share

~~FDX~~

~~New York Stock Exchange~~

FDX

New York Stock Exchange

0.450% Notes due 2025

FDX 25A

New York Stock Exchange

1.625% Notes due 2027

FDX 27

New York Stock Exchange

1.625% Notes due 2027

FDX 27

New York Stock Exchange

0.450% Notes due 2029

FDX 29A

New York Stock Exchange

0.450% Notes due 2029

FDX 29A

New York Stock Exchange

1.300% Notes due 2031

FDX 31

New York Stock Exchange

1.300% Notes due 2031

FDX 31

New York Stock Exchange

3.500% Notes due 2032

FDX 32

New York Stock Exchange

0.950% Notes due 2033

~~FDX 33~~

~~New York Stock Exchange~~

FDX 33

New York Stock Exchange

4.125% Notes due 2037

FDX 37

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock		~~Outstanding Shares at March 18, 2025~~				Outstanding Shares at September 16, 2025
Common Stock, par value $0.10 per share		~~239,598,919~~				235,955,461

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FEDEX CORPORATION

INDEX

	~~PAGE~~	PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance SheetsFebruary 28, 2025 and May 31, 2024	3
Condensed Consolidated Balance SheetsAugust 31, 2025 and May 31, 2025		3
Condensed Consolidated Statements of IncomeThree and Nine Months Ended February 28, 2025 and February 29, 2024	5
Condensed Consolidated Statements of IncomeThree Months Ended August 31, 2025 and August 31, 2024		5
Condensed Consolidated Statements of Comprehensive IncomeThree and Nine Months Ended February 28, 2025 and February 29, 2024	6
Condensed Consolidated Statements of Comprehensive IncomeThree Months Ended August 31, 2025 and August 31, 2024		6
Condensed Consolidated Statements of Cash FlowsNine Months Ended February 28, 2025 and February 29, 2024	7
Condensed Consolidated Statements of Cash FlowsThree Months Ended August 31, 2025 and August 31, 2024		7
Condensed Consolidated Statements of Changes In Common Stockholders’ InvestmentThree and Nine Months Ended February 28, 2025 and February 29, 2024	8
Condensed Consolidated Statements of Changes In Common Stockholders’ InvestmentThree Months Ended August 31, 2025 and August 31, 2024		8
Notes to Condensed Consolidated Financial Statements	9	9
Report of Independent Registered Public Accounting Firm	20	21
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition	21	22
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	41	43
ITEM 4. Controls and Procedures	42	43
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	42	43
ITEM 1A. Risk Factors	42	43
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	45	44
ITEM 5. Other Information	45	44
ITEM 6. Exhibits	46	45
Signature	49	46

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FEDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

	February 28, 2025(Unaudited)		May 31,2024
			August 31, 2025 (unaudited)		May 31,2025
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	~~5,135~~	$	6,~~501~~166	$	5,502
Receivables, less allowances of $725 and $775		10,230		10,087
Receivables, less allowances of $822 and $773			11,516		11,368
Spare parts, supplies, and fuel, less allowances of $301 and $288		617		614
Spare parts, supplies, and fuel, less allowances of $315 and $308			604		602
Prepaid expenses and other		~~1,232~~	1,058	~~1,005~~	914
Total current assets		~~17,214~~	19,344	~~18,207~~	18,386
PROPERTY AND EQUIPMENT, AT COST		~~86,565~~	88,126	~~84,391~~	87,622
Less accumulated depreciation and amortization		~~45,601~~	46,742	~~42,900~~	45,980
Net property and equipment		~~40,964~~	41,384	~~41,491~~	41,642
OTHER LONG-TERM ASSETS
Operating lease right-of-use assets, net		~~16,468~~	16,368	~~17,115~~	16,453
Goodwill		~~6,332~~	6,672	~~6,423~~	6,603
Other assets		~~4,065~~	4,648	~~3,771~~	4,543
Total other long-term assets		~~26,865~~	27,688	~~27,309~~	27,599
	$	~~85,043~~	$	8788,~~007~~416	$	87,627

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FEDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE DATA)

	February 28, 2025(Unaudited)			May 31,2024
		August 31, 2025 (unaudited)					May 31,2025
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	~~611~~$	883	$	68		$	1,428
Accrued salaries and employee benefits		2,~~601~~333			~~2,673~~		2,731
Accounts payable		34,~~604~~223			~~3,189~~		3,692
Operating lease liabilities		2,~~524~~591			~~2,463~~		2,565
Accrued expenses		45,~~556~~494			~~4,962~~		4,995
Total current liabilities		1315,~~896~~524			~~13,355~~		15,411
LONG-TERM DEBT, LESS CURRENT PORTION		1920,~~530~~291			~~20,135~~		19,151
OTHER LONG-TERM LIABILITIES
Deferred income taxes		4,~~308~~050			~~4,482~~		4,205
Pension, postretirement healthcare, and other benefit obligations		1,~~664~~690			~~2,010~~		1,698
Self-insurance accruals		34,~~914~~132			~~3,701~~		4,033
Operating lease liabilities		14,~~366~~141			~~15,053~~		14,272
Other liabilities		~~657~~817			~~689~~		783
Total other long-term liabilities		24,~~909~~830			~~25,935~~		24,991
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS’ INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of February 28, 2025 and May 31, 2024		32			32
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of August 31, 2025 and May 31, 2025		32					32
Additional paid-in capital		4,~~245~~327			~~3,988~~		4,290
Retained earnings		3941,~~754~~538			~~38,649~~		41,402
Accumulated other comprehensive loss		(1,~~499~~371)	)		~~(1,359~~	)	(1,362)
Treasury stock, at cost; 78 million shares as of February 28, 2025 and 72 million shares as of May 31, 2024		(15,824	)		(13,728	)
Treasury stock, at cost; 82 million shares as of August 31, 2025 and 80 million shares as of May 31, 2025		(16,755)					(16,288)
Total common stockholders’ investment		2627,~~708~~771			~~27,582~~		28,074
	$	~~85,043~~$	88,416	$	~~87,007~~		$	87,627

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

	~~Three Months Ended~~			Three Months Ended			~~Nine Months Ended~~
	February 28, 2025			February 29, 2024			February 28, 2025				February 29, 2024
				August 31, 2025					August 31, 2024
REVENUE	$	~~22,160~~		$	2122,~~738~~244		$	~~65,706~~	$	21,579	$	~~65,584~~
OPERATING EXPENSES:
Salaries and employee benefits		~~7,879~~		8,062	~~7,693~~			~~23,543~~	7,785			~~23,311~~
Purchased transportation		~~5,634~~		5,488	~~5,345~~			~~16,409~~	5,275			~~15,776~~
Rentals and landing fees		~~1,178~~		1,192	~~1,145~~			~~3,507~~	1,161			~~3,434~~
Depreciation and amortization		~~1,066~~		1,092	~~1,072~~			~~3,207~~	1,078			~~3,183~~
Fuel		~~889~~		873	~~1,140~~			~~2,911~~	1,075			~~3,569~~
Maintenance and repairs		~~783~~		843	~~804~~			~~2,443~~	829			~~2,482~~
Business optimization costs		179			114			633				364
Separation and other costs				45					—
Other		3,260			3,182			9,629				9,461
Business optimization costs				67					128
		20,868			20,495			62,282				61,580
Other				3,396					3,168
OPERATING INCOME		1,292			1,243			3,424				4,004
				21,058					20,499
OTHER (EXPENSE) INCOME:
OPERATING INCOME				1,186					1,080
Interest, net		(116	)		(91	)		(302	)			(279	)
OTHER (EXPENSE) INCOME:
Other retirement plans, net		50			40			149				120
Interest, net				(119)					(84)
Other, net		(45	)		(9	)		(53	)			(37	)
Other retirement plans, net				60					49
		(111	)		(60	)		(206	)			(196	)
Other, net				7					11
INCOME BEFORE INCOME TAXES		1,181			1,183			3,218				3,808
				(52)					(24)
PROVISION FOR INCOME TAXES		272			304			774				951
INCOME BEFORE INCOME TAXES				1,134					1,056
NET INCOME	$	909		$	879		$	2,444			$	2,857
PROVISION FOR INCOME TAXES				310					262
EARNINGS PER COMMON SHARE:
NET INCOME				$	824				$	794
Basic	$	3.79		$	3.55		$	10.09			$	11.43
EARNINGS PER COMMON SHARE:
Diluted	$	3.76		$	3.51		$	9.99			$	11.31
Basic				$	3.48				$	3.24
DIVIDENDS DECLARED PER COMMON SHARE	$	1.38		$	1.26		$	5.52			$	3.78
Diluted				$	3.46				$	3.21
DIVIDENDS DECLARED PER COMMON SHARE				$	2.90				$	2.76

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN MILLIONS)

	~~Three Months Ended~~						Three Months Ended	~~Nine Months Ended~~
	February 28, 2025			February 29, 2024				February 28, 2025			February 29, 2024
												August 31,2025		August 31,2024
NET INCOME	$	~~909~~		$	~~879~~			$	~~2,444~~		$	~~2,857~~$	824	$	794
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax benefit/(expense) of $2 and $0 in 2025 and $2 and $3 in 2024		17			(39	)			(135	)		(39	)
Foreign currency translation adjustments, net of tax benefit/(expense) of $4 in 2025 and ($4) in 2024												(7)		29
Prior service credit arising during period, net of tax (expense) of $0 and ($11) in 2024		—			—				—			36
Amortization of prior service credit, net of tax benefit of $1 in 2025 and $1 in 2024												(2)		(2)
Amortization of prior service credit, net of tax benefit of $1 and $2 in 2025 and $0 and $0 in 2024		(1	)		(2	)			(5	)		(5	)
												(9)		27
		16			(41	)			(140	)		(8	)
COMPREHENSIVE INCOME												$	815	$	821
COMPREHENSIVE INCOME	$	925		$	838			$	2,304		$	2,849

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN MILLIONS)

	Nine Months Ended
				Three Months Ended
	February 28, 2025			February 29, 2024
				August 31, 2025			August 31, 2024
Operating Activities:
Net income	$	~~2,444~~		$	~~2,857~~824		$	794
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		~~3,207~~		1,092	~~3,183~~		1,078
Provision for uncollectible accounts		~~382~~		219	~~323~~		129
Other noncash items including leases and deferred income taxes		~~2,353~~		718	~~2,141~~		817
Stock-based compensation		~~116~~		56	~~130~~		48
Business optimization costs, net of payments		114			(50	)
Separation and other costs, net of payments				27			—
Changes in assets and liabilities:
Business optimization costs, net of payments				(110)			(69)
Receivables		(692	)		(110	)
Changes in assets and liabilities:
Other assets		(68	)		(119	)
Receivables				(336)			(305)
Accounts payable and other liabilities		(3,383	)		(2,711	)
Other assets				(160)			(223)
Other, net		44			(30	)
Accounts payable and other liabilities				(571)			(1,105)
Cash provided by operating activities		4,517			5,614
Other, net				(43)			23
Investing Activities:
Cash provided by operating activities				1,716			1,187
Capital expenditures		(2,582	)		(3,974	)
Investing Activities:
Purchase of investments		(197	)		(110	)
Capital expenditures				(623)			(767)
Proceeds from sale of investments		77			24
Purchase of investments				(34)			(61)
Proceeds from asset dispositions and other		42			94
Proceeds from sale of investments				30			13
Cash used in investing activities		(2,660	)		(3,966	)
Proceeds from asset dispositions and other investing activities, net				8			13
Financing Activities:
Cash used in investing activities				(619)			(802)
Principal payments on debt		(89	)		(143	)
Financing Activities:
Proceeds from stock issuances		472			265
Proceeds from debt issuances				997			—
Dividends paid		(1,008	)		(949	)
Principal payments on debt				(625)			(34)
Purchases of common stock		(2,517	)		(2,000	)
Proceeds from stock issuances				18			404
Other		(30	)		(7	)
Dividends paid				(345)			(339)
Cash used in financing activities		(3,172	)		(2,834	)
Purchases of common stock				(500)			(1,000)
Effect of exchange rate changes on cash		(51	)		(26	)
Other				(5)			—
Net decrease in cash and cash equivalents		(1,366	)		(1,212	)
Cash used in financing activities				(460)			(969)
Cash and cash equivalents at beginning of period		6,501			6,856
Effect of exchange rate changes on cash				27			26
Cash and cash equivalents at end of period	$	5,135		$	5,644
Net increase (decrease) in cash and cash equivalents				664			(558)
Cash and cash equivalents at beginning of period				5,502			6,501
Cash and cash equivalents at end of period				$	6,166		$	5,943

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ INVESTMENT

(UNAUDITED)

(IN MILLIONS, EXCEPT SHARE DATA)

	~~Three Months Ended~~						Three Months Ended	~~Nine Months Ended~~
	February 28, 2025			February 29, 2024				February 28, 2025			February 29, 2024
												August 31,2025		August 31,2024
Common Stock
Beginning Balance	$	32		$	32			$	32		$	32$	32	$	32
Ending Balance		32			32				32			32		32
Additional Paid-in Capital
Beginning Balance		~~4,165~~			~~3,849~~				~~3,988~~			34,~~769~~290		3,988
Purchases of common stock		—			4				~~(21~~	)		~~(30~~—	)	(9)
Issuance of treasury stock for acquisition		42			—				42			—
Employee incentive plans and other												37		155
Employee incentive plans and other		38			45				236			159
Ending Balance												4,327		4,134
Ending Balance		4,245			3,898				4,245			3,898
Retained Earnings
Retained Earnings
Beginning Balance												41,402		38,649
Beginning Balance		39,175			36,605				38,649			35,259
Net Income												824		794
Net Income		909			879				2,444			2,857
Cash dividends declared ($2.90 and $2.76 per share)												(688)		(676)
Cash dividends declared ($1.38, $1.26, $5.52, and $3.78 per share)		(330	)		(310	)			(1,339	)		(942	)
Ending Balance												41,538		38,767
Ending Balance		39,754			37,174				39,754			37,174
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Beginning Balance												(1,362)		(1,359)
Beginning Balance		(1,515	)		(1,294	)			(1,359	)		(1,327	)
Other comprehensive (loss)/income, net of tax benefit/(expense) of $5 and ($3)												(9)		27
Other comprehensive (loss)/income, net of tax benefit/(expense) of $3, $2, $2, and ($8)		16			(41	)			(140	)		(8	)
Ending Balance												(1,371)		(1,332)
Ending Balance		(1,499	)		(1,335	)			(1,499	)		(1,335	)
Treasury Stock
Treasury Stock
Beginning Balance												(16,288)		(13,728)
Beginning Balance		(15,397	)		(12,426	)			(13,728	)		(11,645	)
Purchases of common stock (2.2 and 3.4 million shares)												(504)		(994)
Purchases of common stock (1.8, 4.1, 8.9, and 8.0 million shares)		(500	)		(1,011	)			(2,495	)		(1,985	)
Employee incentive plans and other (0.3 and 2.2 million shares)												37		297
Issuance of treasury stock for acquisition		48			—				48			—
Ending Balance												(16,755)		(14,425)
Employee incentive plans and other (0.2, 0.3, 2.6, and 1.8 million shares)		25			43				351			236
Total Common Stockholders’ Investment Balance												$	27,771	$	27,176
Ending Balance		(15,824	)		(13,394	)			(15,824	)		(13,394	)
Total Common Stockholders’ Investment Balance	$	26,708		$	26,375			$	26,708		$	26,375

The accompanying notes are an integral part of these condensed consolidated financial statements.

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FEDEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1: ~~Description~~DESCRIPTION ofOF ~~Business~~BUSINESS ~~Segments~~SEGMENTS ~~and~~AND ~~Summary~~SUMMARY ofOF ~~Significant~~SIGNIFICANT ~~Accounting~~ACCOUNTING ~~Policies~~POLICIES

DESCRIPTION OF BUSINESS SEGMENTS. FedEx Corporation (“FedEx”) provides a broad portfolio of transportation, e-commerce, and business services, offering integrated business solutions utilizing our flexible, efficient, and intelligent global network. Our primary operating companies are Federal Express Corporation (“Federal Express”), the world’s largest express transportation company and a leading North American provider of small-package ground delivery services, and FedEx Freight, Inc. (“FedEx Freight”), a leading North American provider of less-than-truckload (“LTL”) freight transportation services.

InFollowing ~~connection with~~ our one FedEx consolidation ~~plan~~, ~~on June 1, 2024, FedEx Ground Package System, Inc. (“FedEx Ground”) and FedEx Corporate Services, Inc. were merged into~~ Federal Express, ~~becoming~~operates a ~~single company operating a~~ unified, fully integrated air-ground express network under the respected FedEx brand. FedEx Freight ~~continues~~provides ~~to provide~~ LTL freight transportation services as a separate subsidiary. ~~Beginning in the first quarter of 2025,~~ Federal Express and FedEx Freight represent our major service lines and constitute our reportable segments. Additionally, the results of FedEx Custom Critical, Inc. (“FedEx Custom Critical”) are included in the FedEx Freight segment instead of the Federal Express segment in 2025. Prior-year amounts were revised to reflect this presentation.

WeSUMMARY ~~evaluated~~OF ~~our~~SIGNIFICANT ~~reporting~~ACCOUNTING ~~units~~POLICIES. ~~with~~These ~~significant~~interim ~~recorded~~financial ~~goodwill~~statements ~~during~~of ~~the~~FedEx ~~fourth~~have ~~quarter~~been ofprepared ~~2024,~~in ~~and~~accordance ~~the~~with ~~estimated~~accounting ~~fair~~principles ~~value~~generally ofaccepted ~~each~~in ~~reporting~~the ~~unit~~United ~~exceeded~~States ~~its~~and ~~carrying~~Securities ~~value~~and asExchange ofCommission ~~the~~(“SEC”) ~~end~~instructions offor ~~2024~~interim ~~immediately~~financial ~~before~~information, ~~our~~and ~~one~~should ~~FedEx~~be ~~consolidation.~~read Wein ~~reevaluated~~conjunction ~~the~~with ~~conclusion~~our ofAnnual ~~our~~Report ~~2024~~on ~~goodwill~~Form ~~impairment~~10-K ~~tests~~for asthe offiscal ~~June~~year 1ended May 31, ~~2024~~2025 ~~immediately~~(“Annual ~~after~~Report”). ~~our~~Significant ~~one~~accounting ~~FedEx~~policies ~~consolidation~~ and ~~concluded~~other ~~that~~disclosures ~~the~~normally ~~estimated~~provided ~~fair~~have ~~values~~been ofomitted ~~our~~since ~~reporting~~such ~~units~~items ~~with~~are ~~significant~~disclosed ~~goodwill~~in ~~continued~~our toAnnual ~~exceed their respective carrying values~~Report.

In ~~December~~the ~~2024~~opinion of management, wethe ~~announced~~accompanying ~~that~~unaudited ~~FedEx’s~~condensed ~~Board~~consolidated offinancial ~~Directors~~statements ~~decided~~reflect all adjustments (including normal recurring adjustments) necessary to ~~pursue~~present afairly ~~full~~our ~~separation~~financial position as of ~~FedEx~~August 31, ~~Freight~~2025, ~~through~~and the ~~capital~~results ~~markets~~of our operations, ~~creating~~cash aflows, ~~new~~and ~~publicly~~changes ~~traded~~in ~~company.~~common ~~The~~stockholders’ ~~transaction~~investment for the three-month periods ended August 31, ~~which~~2025 ~~would~~and be2024. ~~implemented~~Operating ~~through~~results for the ~~spin~~three-~~off~~month ofperiod ~~shares~~ended August 31, 2025 are not necessarily indicative of the ~~new~~results ~~company~~that tomay ~~FedEx~~be ~~stockholders~~expected for the year ending May 31, is2026. ~~expected~~Except as otherwise specified, references to beyears ~~tax-free~~indicate ~~for~~our ~~U.S.~~fiscal ~~federal~~year ~~income~~ending ~~tax~~May 31, ~~purposes~~2026 ~~for~~or ~~FedEx~~ended ~~stockholders~~May 31 of the year referenced, and iscomparisons ~~expected~~are to bethe ~~completed~~corresponding byperiod ~~June~~of ~~2026~~the prior year.

~~SUMMARY~~The OFidentification ~~SIGNIFICANT ACCOUNTING POLICIES. These interim financial statements~~ of ~~FedEx~~costs ~~have~~as ~~been~~business ~~prepared~~optimization ~~in accordance with accounting principles generally accepted in the United States~~ and ~~Securities~~separation and ~~Exchange~~other ~~Commission~~costs ~~(“SEC”)~~is ~~instructions~~subject ~~for~~to ~~interim financial information, and should be read in conjunction with~~ our ~~Annual~~disclosure ~~Report~~controls ~~on Form 10-K for the fiscal year ended May 31, 2024 (“Annual Report”). Significant accounting policies~~ and ~~other disclosures normally provided have been omitted since such items are disclosed in our Annual Report~~procedures.

InCONTRACT ~~the~~ASSETS ~~opinion~~AND ofLIABILITIES. ~~management,~~Contract ~~the~~assets ~~accompanying~~include ~~unaudited~~billed ~~condensed~~and ~~consolidated~~unbilled ~~financial~~amounts ~~statements~~resulting ~~reflect~~from ~~all~~in-transit ~~adjustments~~shipments, ~~(including~~as ~~normal~~we ~~recurring~~have ~~adjustments)~~an ~~necessary~~unconditional right to ~~present~~payment ~~fairly~~only ~~our~~once ~~financial~~all ~~position~~performance asobligations ofhave ~~February~~been ~~28,~~completed ~~2025~~(e.g., ~~and~~packages ~~the~~have ~~results~~been ofdelivered). ~~our~~Contract ~~operations~~assets ~~for~~are ~~the~~generally ~~three-~~classified ~~and~~as ~~nine-month periods ended February 28~~current, ~~2025~~ and ~~February 29, 2024, cash flows for~~ the ~~nine-month~~full ~~periods~~balance ~~ended~~is ~~February~~converted ~~28,~~each ~~2025~~quarter ~~and~~based ~~February~~on ~~29,~~the ~~2024,~~short-term ~~and~~nature ~~changes~~of ~~in common stockholders’ investment for~~ the ~~three-~~transactions. ~~and~~Our ~~nine-month~~contract ~~periods~~liabilities ~~ended~~consist ~~February~~of ~~28,~~advance ~~2025~~payments and ~~February~~billings ~~29,~~in ~~2024.~~excess ~~Operating~~of ~~results~~revenue. ~~for~~The ~~the~~full ~~three-~~balance ~~and~~of ~~nine-month~~deferred ~~periods~~revenue ~~ended~~is ~~February~~converted ~~28,~~each ~~2025~~quarter ~~are~~based ~~not~~on ~~necessarily indicative of~~ the ~~results~~short-term ~~that~~nature ~~may~~of ~~be expected for~~ the ~~year ending May 31, 2025~~transactions.

InGross ~~January~~contract assets related to in-transit shipments totaled $645 million and $673 million at August 31, 2025 and May 31, ~~the~~2025, ~~Board~~respectively. ofContract ~~Directors~~assets ~~approved~~net aof ~~change~~deferred inunearned ~~FedEx’s~~revenue ~~fiscal~~were ~~year~~$536 ~~end~~million ~~from~~and ~~May~~$526 million at August 31, to2025 ~~December~~and May 31, 2025, respectively. ~~The~~Contract ~~fiscal~~assets ~~year~~are ~~change~~included ~~will~~within be“Receivables” ~~effective~~in ~~June~~the 1,accompanying ~~2026.~~unaudited ~~Except~~condensed asconsolidated ~~otherwise~~balance ~~specified,~~sheets. ~~references~~Contract liabilities related to ~~years~~advance ~~indicate~~payments ~~our~~from ~~fiscal~~customers ~~year~~were ~~ending~~$20 ~~May~~million and $23 million at August 31, 2025 orand ~~ended~~ May 31, of2025, ~~the~~respectively. ~~year~~Contract ~~referenced~~liabilities ~~and~~are ~~comparisons~~included ~~are~~within to“Accrued expenses” in the ~~corresponding~~accompanying ~~period~~unaudited ofcondensed ~~the~~consolidated ~~prior~~balance ~~year~~sheets.

~~Contract~~DISAGGREGATION ~~Assets~~OF ~~and Liabilities~~REVENUE. ~~Contract~~See ~~assets~~Note ~~include~~7 ~~billed~~for ~~and~~disclosure ~~unbilled~~of ~~amounts~~disaggregated ~~resulting~~revenue ~~from~~for ~~in-transit~~the ~~shipments,~~periods asended ~~we have an unconditional right to payment only once all performance obligations have been completed (e.g.~~August 31, ~~packages~~2025 ~~have~~and ~~been delivered)~~2024. ~~Contract~~This ~~assets~~presentation ~~are generally classified as current, and the full balance~~ is ~~converted~~consistent ~~each~~with ~~quarter~~how ~~based~~we onorganize ~~the~~our ~~short-term~~segments ~~nature~~internally offor ~~the~~making ~~transactions.~~operating ~~Our~~decisions ~~contract liabilities consist of advance payments~~ and ~~billings~~measuring ~~in excess of revenue~~performance. ~~The full balance of deferred revenue is converted each quarter based on the short-term nature of the transactions.~~

~~Gross~~EMPLOYEES ~~contract~~UNDER ~~assets~~COLLECTIVE ~~related~~BARGAINING toARRANGEMENTS. ~~in-transit~~Our ~~shipments~~pilots, ~~totaled~~who ~~$670~~are ~~million~~a ~~and~~small ~~$672~~number ~~million~~of atour ~~February~~total 28employees, ~~2025~~are ~~and~~represented ~~May~~by 31the Air Line Pilots Association, ~~2024~~International (“ALPA”) and are employed under a collective bargaining agreement that took effect on November 2, ~~respectively~~2015. ~~Contract~~The ~~assets~~agreement ~~net~~became ofamendable ~~deferred~~in ~~unearned~~November ~~revenue~~2021. ~~were~~Bargaining ~~$493~~for ~~million~~a ~~and~~successor ~~$463~~agreement ~~million~~began atin ~~February~~May 282021, ~~2025~~ and ~~May~~in ~~31,~~November ~~2024~~2022 the National Mediation Board (“NMB”), ~~respectively~~which is the U.S. ~~Contract~~governmental ~~assets~~agency ~~are~~that ~~included~~oversees ~~within~~labor ~~“Receivables”~~agreements infor entities covered by the ~~accompanying~~Railway ~~unaudited~~Labor ~~condensed~~Act ~~consolidated~~of ~~balance~~1926, ~~sheets~~as amended, began actively mediating the negotiations. ~~Contract~~In ~~liabilities~~July ~~related~~2023, the pilots failed to ~~advance~~ratify ~~payments~~the ~~from~~tentative ~~customers~~successor ~~were~~agreement ~~$23~~that ~~million~~was ~~and~~approved ~~$23~~by ~~million~~ALPA’s atFedEx ~~February~~Master ~~28,~~Executive ~~2025~~Council ~~and~~the ~~May~~prior ~~31,~~month. In April 2024, ~~respectively~~the NMB rejected ALPA’s request for a proffer of arbitration. ~~Contract~~Bargaining ~~liabilities~~for ~~are~~a ~~included~~successor ~~within~~agreement ~~“Accrued~~continues. ~~expenses”~~The inconduct of mediated negotiations has no effect on our operations. Once a new agreement is ratified, we may amend our pension plan offered to the ~~accompanying~~pilots, ~~unaudited~~which ~~condensed~~would ~~consolidated~~result ~~balance~~in ~~sheets~~a remeasurement of our pension benefit obligation. A small number of our other employees are members of unions.

STOCK-BASED 9COMPENSATION. We have three types of equity-based compensation: stock options, restricted stock, and, for outside directors, restricted stock units. The key terms of our equity-based compensation plans and financial disclosures about these

~~Disaggregation of Revenue. The following table provides revenue by service type (in millions) for the three~~- ~~and nine~~9-~~month periods ended February 28, 2025 and February 29, 2024. This presentation is consistent with how we organize our segments internally for making operating decisions and measuring performance.~~

	Three Months Ended				Nine Months Ended
	2025		2024		2025		2024
REVENUE BY SERVICE TYPE
Federal Express segment:
Package:
U.S. priority	$	2,646	$	2,595	$	7,800	$	7,873
U.S. deferred		1,386		1,316		3,736		3,710
U.S. ground		8,986		8,363		25,298		24,805
Total U.S. domestic package revenue		13,018		12,274		36,834		36,388
International priority		2,097		2,317		6,534		7,034
International economy		1,465		1,107		4,413		3,407
Total international export package revenue		3,562		3,424		10,947		10,441
International domestic(1)		1,078		1,139		3,380		3,492
Total package revenue		17,658		16,837		51,161		50,321
Freight:
U.S.		286		641		1,238		1,795
International priority		551		520		1,717		1,641
International economy		470		438		1,462		1,380
Total freight revenue		1,307		1,599		4,417		4,816
Other		216		236		749		734
Total Federal Express segment		19,181		18,672		56,327		55,871
FedEx Freight segment		2,089		2,205		6,595		7,042
Other and eliminations(2)		890		861		2,784		2,671
	$	22,160	$	21,738	$	65,706	$	65,584

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~~International~~programs ~~domestic~~are ~~revenue~~set ~~relates~~forth toin our ~~international~~Annual ~~intra~~Report. Our stock-~~country~~based ~~operations~~compensation expense was $56 million and $48 million for the three-month periods ended August 31, 2025 and August 31, 2024, respectively. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report.

~~Includes~~BUSINESS ~~the~~OPTIMIZATION ~~FedEx~~COSTS. ~~Dataworks~~Our business optimization costs relate to transformation initiatives aimed to improve long-term profitability, ~~Inc.~~drive ~~(“FedEx~~efficiency ~~Dataworks”)~~within and between our transportation segments, ~~FedEx~~lower ~~Office~~our overhead and ~~Print~~support ~~Services~~costs, ~~Inc~~and transform our digital capabilities. (Costs included in the “~~FedEx~~Business ~~Office~~optimization costs”) caption of the accompanying unaudited condensed consolidated statements of income relate to our Network 2.0 program, ~~and~~the ~~FedEx~~Europe ~~Logistics~~workforce reduction plan, ~~Inc.~~and ~~(“FedEx~~other ~~Logistics”)~~DRIVE ~~operating~~initiatives ~~segments~~commenced in prior years.

~~EMPLOYEES~~We ~~UNDER~~incurred ~~COLLECTIVE~~business ~~BARGAINING~~optimization ~~ARRANGEMENTS.~~costs ~~The~~of ~~pilots~~$67 ofmillion ~~Federal~~($52 ~~Express~~million, ~~who~~net ~~are a small number~~ of ~~its total employees~~tax, ~~are~~or ~~represented~~$0.22 byper ~~the~~diluted ~~Air Line Pilots Association, International (“ALPA”~~share) ~~and are employed under a collective bargaining agreement that took effect on November 2, 2015. The agreement became amendable~~ in ~~November~~the ~~2021.~~three-month ~~Bargaining~~period ~~for~~ended ~~a successor agreement began in May 2021~~August 31, 2025 and in$128 ~~November~~million ~~2022 the National Mediation Board~~ (~~“NMB”)~~$98 million, ~~which~~net ~~is the U.S. governmental agency that oversees labor agreements for entities covered by the Railway Labor Act~~ of ~~1926~~tax, asor ~~amended, began actively mediating the negotiations~~$0.39 Inper ~~July~~diluted ~~2023,~~share) ~~Federal~~in ~~Express’s pilots failed to ratify~~ the ~~tentative successor agreement that was approved by ALPA’s FedEx Master Executive Council the prior~~ three-month. ~~Bargaining~~period ~~for~~ended aAugust 31, ~~successor agreement continues~~2024. InThese ~~April~~costs ~~2024,~~were ~~the~~primarily ~~NMB~~related ~~rejected~~to ~~ALPA’s~~professional ~~request~~services ~~for~~and aseverance ~~proffer of arbitration,~~ and ~~the~~are ~~parties~~included ~~remain~~ in ~~mediated~~Corporate, ~~negotiations. The conduct of mediated negotiations has no effect on our operations. A small number of our~~ other, ~~employees~~and ~~are~~eliminations ~~members~~and ofFederal ~~unions~~Express.

~~STOCK-BASED~~Network ~~COMPENSATION~~2. We have three types of equity-based compensation: stock options, restricted stock, and, for outside directors, restricted stock units. The key terms of our equity-based compensation plans and financial disclosures about these programs are set forth in our Annual Report. Our stock-based compensation expense was $31 million for the three-month period ended February 28, 2025 and $116 million for the nine-month period ended February 28, 2025. Our stock-based compensation expense was $34 million for the three-month period ended February 29, 2024 and $130 million for the nine-month period ended February 29, 2024. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report.0

~~BUSINESS~~Network ~~OPTIMIZATION COSTS~~2.0 Inis ~~the~~our ~~second~~multi-year ~~quarter~~effort ~~of 2023, we announced DRIVE, a comprehensive program~~ to improve ~~long-term~~the ~~profitability. This program includes a business optimization plan to drive~~ efficiency ~~within~~with ~~and~~which ~~among~~FedEx ~~our~~picks ~~transportation~~up, ~~segments~~transports, ~~lower~~and ~~our~~delivers ~~overhead~~packages ~~and~~in ~~support~~the ~~costs,~~U.S. and ~~transform~~Canada. ~~our~~Through ~~digital~~Network ~~capabilities~~2.0, Wewe ~~have~~continue ~~commenced our plan~~ to consolidate our sortation facilities and equipment, reduce pickup-and-delivery routes, and optimize our enterprise linehaul network by moving beyond discrete collaboration to an end-to-end optimized network. ~~through~~We have implemented Network 2.0, ~~the~~optimization ~~multi-year~~in ~~effort~~approximately to360 ~~improve~~locations in the ~~efficiency~~U.S ~~with~~and ~~which~~Canada weas ~~pick~~of upAugust 31, ~~transport,~~2025. Service providers will handle the pickup and ~~deliver~~delivery of Federal Express packages in some locations while employee couriers will handle others. We completed Canada’s implementation of Network 2.0 in the fourth quarter of 2025 and expect to complete the U.S. ~~and~~implementation ~~Canada~~by the end of calendar 2027.

-Europe 10workforce -reduction plan

WeOur ~~have~~workforce ~~implemented~~reduction ~~Network~~plan ~~2.0~~in ~~optimization~~Europe into ~~more~~reduce ~~than~~structural ~~200~~costs ~~locations~~announced in ~~the~~June ~~U.S.~~2024 continues and ~~Canada.~~is ~~Contracted~~expected ~~service~~to ~~providers~~impact ~~will~~approximately ~~handle~~1,400 ~~the~~employees ~~pickup~~across back-office and ~~delivery~~commercial functions. The execution of ~~Federal~~the ~~Express~~plan ~~packages~~is subject to a consultation process that is expected to occur over an 18-month period in ~~some~~accordance ~~locations~~with ~~while~~local ~~employee~~country ~~couriers~~processes ~~will~~and ~~handle~~regulations. ~~others~~We expect savings from the plan to be approximately $150 million on an annualized basis beginning in calendar 2026.

InWe ~~June~~expect ~~2024,~~the ~~Federal~~pre-tax ~~Express~~cost ~~announced~~of athe ~~workforce~~severance ~~reduction~~benefits ~~plan~~and inlegal ~~Europe~~and asprofessional ~~part~~fees ~~of its ongoing measures~~ to ~~reduce~~be ~~structural~~provided ~~costs.~~under ~~The plan will impact approximately 1,500 employees in Europe across back-office~~ and ~~commercial~~related ~~functions.~~to ~~The execution of~~ the plan isto ~~subject~~be toapproximately a$250 ~~consultation~~million. ~~process~~These ~~that~~charges isare expected to ~~occur~~be ~~over~~incurred anthrough ~~18-month~~fiscal ~~period~~2026 inand ~~accordance~~will ~~with~~be ~~local~~classified ~~country~~as ~~processes~~business ~~and~~optimization ~~regulations~~expenses. In the ~~nine~~three-month period ended ~~February 28~~August 31, 2025, we incurred $~~220~~3 million of costs related to this plan. WeThe ~~expect~~timing ~~the~~and ~~pre-tax~~amount ~~cost~~ of ~~the~~our ~~severance~~business ~~benefits~~optimization ~~and~~expenses ~~legal~~ and ~~professional~~the ~~fees to be provided under and~~ related tocost ~~the~~savings ~~plan to range~~ from ~~$250~~the ~~million~~workforce toreduction ~~$300~~plan ~~million~~may inchange ~~cash~~as ~~expenditures.~~we ~~These~~revise ~~charges are expected to be incurred through fiscal year 2026~~ and ~~will~~implement beour ~~classified as business optimization expenses~~plans.

WeSEPARATION ~~incurred~~AND ~~costs~~OTHER ~~associated with our business optimization activities, including the workforce reduction plan in Europe, of $179 million ($137 million, net of tax, or $0~~COSTS.56 per diluted share) in the three-month period ended February 28, 2025 and $633 million ($484 million, net of tax, or $1.98 per diluted share) in the nine-month period ended February 28, 2025. These costs were primarily related to severance and professional services and are included in Federal Express and Corporate, other, and eliminations. We recognized $114 million ($87 million, net of tax, or $0.35 per diluted share) in the three-month period ended February 29, 2024 and $364 million ($278 million, net of tax, or $1.10 per diluted share) in the nine-month period ended February 29, 2024. These costs were primarily related to professional services and severance and are included in Corporate, other, and eliminations and Federal Express.

~~FEDEX FREIGHT SPIN-OFF COSTS. We incurred costs related to the planned spin-off of~~ FedEx Freight of $23 million ($17 million, net of tax, or $0.07 per diluted share) in the third quarter of 2025. These costs consist of $18 million related to the debt exchange offer and consent solicitation transactions discussed in Note 4 below which is included in interest, net and $5 million of professional fees which is included in other. We did not incur any FedEx Freight spin-off costs in the first half of 2025 or in the three or nine months of 2024.separation

We incurred costs related to the planned spin-off of FedEx Freight of $43 million ($33 million, net of tax, or $0.14 per diluted share) in the three-month period ended August 31, 2025. These costs consist of $41 million primarily related to professional services included in the “Separation and other costs” caption of the accompanying unaudited condensed consolidated statements of income, and $2 million included in the “Other, net” caption of the accompanying unaudited condensed consolidated statements of income. These costs are included in Corporate, other, and eliminations; FedEx Freight; and Federal Express. We did not incur any FedEx Freight spin-off costs in the first quarter of 2025.

Fiscal year change

In January 2025, the Board of Directors approved a change in FedEx’s fiscal year end from May 31 to December 31. The planned fiscal year change is expected to be effective June 1, 2026. We incurred costs related to the fiscal year change of $4 million ($3 million, net of tax, or $0.01 per diluted share) in the three-month period ended August 31, 2025. These costs were primarily related to professional services included in the “Separation and other costs” caption of the accompanying unaudited condensed consolidated statements of income and are included in Federal Express. We did not incur any costs related to the fiscal year change in the first quarter of 2025.

-10-

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DERIVATIVE FINANCIAL INSTRUMENTS. We enter into derivative financial instruments to reduce the effects of volatility in foreign currency exchange exposure on operating results and cash flows. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of cash receipts and cash payments principally related to our investments. We use debt denominated in foreign currency and fixed-to-fixed cross-currency swaps to hedge our exposure to changes in foreign exchange rates on certain of our foreign investments.

As of ~~February 28~~August 31, 2025, we had €~~153~~845 million of debt designated as a net investment hedge to reduce the volatility of the U.S. dollar value of a portion of our net investment in a euro-denominated consolidated subsidiary.

As of ~~February 28~~August 31, 2025, we had four cross-currency swaps outstanding, and the fair value of the swaps classified as assets and liabilities was $1812 million and $13119 million, respectively. As of May 31, ~~2024~~2025, the fair value of the swaps classified as assets and liabilities was $813 million and $14108 million, respectively. We record all derivatives on the balance sheet at fair value within either “Prepaid expenses and other” or “Other liabilities” in the accompanying unaudited condensed consolidated balance sheets. For debt and foreign currency derivatives designated as net investment hedges, the gain or loss on the derivative is reported in “Accumulated other comprehensive loss” (“AOCL”) as part of the cumulative translation adjustment. The estimated fair values were determined using pricing models that rely on market-based inputs such as foreign currency exchange rates and yield curves, and are classified as Level 2 within the fair value hierarchy. This classification is defined as a fair value determined using market-based inputs other than quoted prices that are observable for the derivative financial instruments, either directly or indirectly.

As of ~~February 28~~August 31, 2025, our net investment hedges remain effective.

SUPPLIER FINANCE PROGRAM. We offer voluntary Supply Chain Finance (“SCF”) programs through financial institutions to certain of our suppliers. We agree to commercial terms with our suppliers, including prices, quantities, and payment terms, and they issue invoices to us based on the agreed-upon contractual terms. If our suppliers choose to participate in the SCF programs, they determine which invoices, if any, to sell to the financial institutions to receive an early discounted payment, while we settle the net payment amount with the financial institutions on the payment due dates. We guarantee these payments with the financial institutions.

Amounts due to our suppliers that participate in the SCF programs are included in “Accounts payable” in the accompanying unaudited condensed consolidated balance sheets. We have been informed by the participating financial institutions that as of ~~February 28~~August 31, 2025 and May 31, ~~2024~~2025, suppliers have been approved to sell to them $87116 million and $9471 million, respectively, of our outstanding payment obligations. A rollforward of obligations confirmed and paid during the three-month periods ended August 31 is presented below (in millions):

- 11 -


	2025		2024
Confirmed obligations outstanding at beginning of period	$	71	$	94
Invoices confirmed during the period	186		164
Confirmed invoices paid during the period	(143)		(185)
Currency translation adjustments	2		2
Confirmed obligations outstanding at end of period	$	116	$	75

obligations. A rollforward of obligations confirmed and paid during the nine-month period ended February 28, 2025 is presented below (in millions):

Confirmed obligations outstanding at beginning of period	$	94
Invoices confirmed during the period		457
Confirmed invoices paid during the period		(460	)
Currency translation adjustments		(4	)
Confirmed obligations outstanding at end of period	$	87

RECENT ACCOUNTING GUIDANCE. New accounting rules and disclosure requirements can significantly affect our reported results and the comparability of our financial statements. We believe the following new accounting guidance is relevant to the readers of our financial statements.

Accounting Standards Not Yet Adopted

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), and in December 2022 subsequently issued ASU 2022-06, to temporarily ease the potential burden in accounting for reference rate reform. The standards provide optional expedients and exceptions for applying accounting principles generally accepted in the United States to existing contracts, hedging relationships, and other transactions affected by reference rate reform. The standards apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate to be discontinued because of reference rate reform. The standards were effective upon issuance and can generally be applied through December 31, 2024. While there has been no material effect to our financial condition,

results of operations, or cash flows from reference rate reform as of February 28, 2025, we continue to monitor our contracts and transactions for potential application of these ASUs.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The update will be effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

In March 2024, the SEC adopted final rules requiring public entities to provide certain climate-related information in their registration statements and annual reports. As part of the disclosures, entities will be required to quantify certain effects of severe weather events and other natural conditions in a note to their audited financial statements. The rules were originally scheduled to be effective for annual periods beginning in calendar 2025. In April 2024, the SEC voluntarily stayed implementation of the final rules pending certain legal challenges and in February 2025 requested that the court not schedule the matter for argument in order to allow time for the SEC to determine appropriate next steps. We are assessing the effect of the new rules on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about specific expense categories at interim and annual reporting periods. The update will be effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

INVESTMENTS IN EQUITY AND DEBT SECURITIES. Investments in equity securities with a readily determinable fair value are carried at fair value and are classified as Level 1 investments in the fair value hierarchy. Level 1 investments are valued at the closing price or last trade reported on the major market on which the individual securities are traded. For equity securities without readily determinable fair values that qualify for the net asset value (“NAV”) practical expedient, we have elected to apply the NAV practical expedient to estimate fair value. Changes in fair value are recognized in “Other (expense) income” in the accompanying unaudited condensed consolidated statements of income.

We apply the measurement alternative to all other investments in equity securities without a readily determinable fair value. Under the measurement alternative these equity securities are accounted for at cost, with adjustments for observable changes in prices and impairments recognized in “Other (expense) income” on our accompanying unaudited condensed consolidated statements of income.

-We 12perform -an assessment each reporting period to evaluate whether these equity securities are impaired. Our assessment includes a review of recent operating results and trends and other publicly available data. If an investment is impaired, we write it down to its estimated fair value.

WeEquity ~~perform a qualitative assessment each reporting period to evaluate whether these equity~~ securities ~~are~~totaled ~~impaired.~~$535 ~~Our~~million ~~assessment~~and ~~includes~~$506 amillion ~~review~~at ofAugust 31, ~~recent~~2025 ~~operating results~~ and ~~trends~~May 31, ~~and~~2025, ~~other publicly available data~~respectively. IfEquity ansecurities ~~investment~~are isrecorded ~~impaired,~~within we“Other ~~write~~assets” itin ~~down~~the toaccompanying ~~its~~unaudited ~~estimated~~condensed ~~fair~~consolidated ~~value.~~balance sheets.

~~Equity~~Debt securities, ~~totaled~~which ~~$447~~are ~~million~~considered ~~and~~short-term ~~$360~~investments, ~~million~~are atclassified ~~February~~as ~~28,~~“available-for-sale” ~~2025~~ and ~~May~~are ~~31,~~carried ~~2024,~~at ~~respectively~~fair value. ~~Equity~~Debt securities are ~~recorded~~Level 2 within ~~“Other~~the ~~assets”~~fair invalue ~~the~~hierarchy. ~~accompanying~~Realized ~~unaudited~~gains ~~condensed~~and ~~consolidated~~losses ~~balance~~on ~~sheets.~~available-for-sale debt securities are included in net

~~Debt securities, which are considered short~~-~~term investments, are classified as “available~~11-for-sale” and are carried at fair value. Debt securities are Level 2 within the fair value hierarchy. Realized gains and losses on available-for-sale debt securities are included in net income, while unrealized gains and losses, net of tax, are included in AOCL in the accompanying unaudited condensed consolidated balance sheets.

~~Debt~~Table ~~securities~~of totaled $72 million and $77 million at February 28, 2025 and May 31, 2024, respectively. Debt securities are recorded within “Prepaid expenses and other” in the accompanying unaudited condensed consolidated balance sheets.Contents

~~TREASURY SHARES. In December 2021~~income, ~~our~~while ~~Board~~unrealized ofgains ~~Directors~~and ~~authorized a stock repurchase program of up to $5.0 billion of FedEx common stock. In March 2024~~losses, ~~our~~net ~~Board~~ of ~~Directors authorized a new stock repurchase program for additional repurchases of up to $5.0 billion of FedEx common stock. As of May 31~~tax, ~~2024,~~are ~~$64~~included ~~million~~in ~~remained~~AOCL ~~available~~in tothe beaccompanying ~~used~~unaudited ~~for~~condensed ~~repurchases~~consolidated ~~under~~balance ~~the 2021 program~~sheets.

~~During~~Debt ~~the~~securities ~~three-month~~totaled ~~period~~$71 ~~ended February 28, 2025, 1.8~~ million ~~shares~~and ~~were repurchased through open market transactions at an average price of~~ $~~276.26~~70 ~~per share for a total of $497~~ million. ~~During~~at ~~the~~August 31, ~~nine-month~~2025 ~~period~~and ~~ended February 28~~May 31, 2025, ~~we repurchased 8~~respectively.9 ~~million~~Debt ~~shares~~securities ofare ~~FedEx~~recorded ~~common~~within ~~stock~~“Prepaid ~~through~~expenses ~~accelerated~~and ~~share repurchase (“ASR~~other”) ~~and~~in ~~open~~the ~~market~~accompanying ~~transactions~~unaudited atcondensed anconsolidated ~~average~~balance ~~price of $281~~sheets.~~74 per share for a total of $2.5 billion. As of February 28, 2025, $2.6 billion remained available to use for repurchases under the 2024 stock repurchase program.~~

~~The~~TREASURY ~~final~~SHARES. ~~number~~In ofMarch ~~shares~~2024, ~~delivered~~our ~~upon~~Board ~~settlement~~ of ~~the~~Directors ~~ASR~~authorized ~~agreements was determined based on~~ a ~~discount~~stock torepurchase ~~the~~program ~~volume-weighted~~for ~~average~~repurchases ~~price~~ of ~~our~~up ~~stock~~to ~~during~~$5.0 ~~the~~billion ~~term~~ of ~~the~~FedEx ~~transaction. The repurchased shares were accounted for as a reduction to~~ common ~~stockholders’~~stock. ~~investment~~During in the ~~accompanying~~three-month ~~unaudited~~period ~~condensed~~ended ~~consolidated~~August 31, ~~balance~~2025, ~~sheet~~2.2 ~~and~~million ~~resulted~~shares inwere arepurchased ~~reduction~~through ofopen ~~the~~market ~~outstanding~~transactions ~~shares~~under ~~used~~this toprogram ~~calculate~~at ~~the~~an ~~weighted-~~average ~~common~~price ~~shares~~of ~~outstanding~~$232.25 ~~for~~per ~~basic~~share ~~and~~for ~~diluted~~a ~~earnings~~total ~~per~~of ~~share~~$500 million.

During the ~~nine~~three-month period ended ~~February 29~~August 31, 2024, 83.04 million shares were repurchased under our previous Board-authorized 2021 and 2024 repurchase programs through accelerated share repurchase (“ASR”) agreements with two banks at an average price of $~~250~~295.9599 per share for a total of $21.0 billion. The final number of shares delivered upon settlement of the ASR agreements was determined based on a discount to the volume-weighted average price of our stock during the term of the transaction. The repurchased shares were accounted for as a reduction to common stockholders’ investment in the accompanying unaudited condensed consolidated balance sheet and resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share.

~~Shares~~As of August 31, 2025, $1.6 billion remained available to use for repurchases under ~~the~~our 2024 stock repurchase program. Shares may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx common stock, and general market conditions. No time limits were set for the completion of the program; however, we may decide to suspend or discontinue the program at any time.

DIVIDENDS DECLARED PER COMMON SHARE. On ~~February 14~~August 7, 2025, our Board of Directors declared a quarterly cash dividend of $1.3845 per share of common stock. The dividend will be paid on ~~April~~ October 1, 2025 to stockholders of record as of the close of business on ~~March~~September 8, 102025. On June 9, 2025, our Board of Directors declared a quarterly cash dividend of $1.45 per share of common stock. The dividend was paid on July 8, 2025 to stockholders of record as of the close of business on June 23, 2025. Each quarterly dividend payment is subject to review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis. There are no material restrictions on our ability to declare dividends, nor are there any material restrictions on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans, or advances.

~~NOTE~~RECENT 2:ACCOUNTING ~~Credit~~GUIDANCE. ~~Losses~~New accounting rules and disclosure requirements can significantly affect our reported results and the comparability of our financial statements. We believe the following new accounting guidance is relevant to the readers of our financial statements.

New Accounting Standards and Accounting Standards Not Yet Adopted

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the application of the current expected credit loss model for current accounts receivable and current contract assets under Accounting Standards Codification 606. The update is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, effective for our 2026 annual financial statements. The new requirements will primarily affect the annual financial statement disclosures, with enhanced detail regarding the amount of cash taxes paid and the reconciliation of our effective tax rate.

NOTE 2: CREDIT LOSSES

We are exposed to credit losses primarily through our trade receivables. We assess ability to pay for certain customers by conducting a credit review, which considers the customer’s established credit rating and our assessment of creditworthiness. We determine the allowance for credit losses on accounts receivable using a combination of specific reserves for accounts that are deemed to exhibit credit loss indicators and general reserves that are determined using loss rates based on historical write-offs by geography and recent forecast information, including underlying economic expectations. We update our estimate of credit loss reserves quarterly.

~~Credit losses were $132 million for the three~~-~~month period ended February 28, 2025 and $382 million for the nine~~12-month period ended February 28, 2025. Credit losses were $106 million for the three-month period ended February 29, 2024 and $323 million for the nine-month period ended February 29, 2024. Our allowance for credit losses was $415 million at February 28, 2025 and $436 million at May 31, 2024.

-Table 13of -Contents

~~NOTE~~Credit 3:losses ~~Accumulated~~were ~~Other~~$219 ~~Comprehensive~~million ~~Loss~~for the three-month period ended August 31, 2025 and $129 million for the three-month period ended August 31, 2024. Our allowance for credit losses was $492 million at August 31, 2025 and $438 million at May 31, 2025.

~~The~~NOTE ~~following~~3: ~~table~~ACCUMULATED ~~provides~~OTHER ~~changes~~COMPREHENSIVE in AOCL, net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended February 28, 2025 and February 29, 2024 (in millions; amounts in parentheses indicate debits to AOCL):LOSS

	Three Months Ended						Nine Months Ended
	2025			2024			2025			2024
Foreign currency translation loss:
Balance at beginning of period	$	(1,574	)	$	(1,362	)	$	(1,422	)	$	(1,362	)
Translation adjustments		17			(39	)		(135	)		(39	)
Balance at end of period		(1,557	)		(1,401	)		(1,557	)		(1,401	)
Retirement plans adjustments:
Balance at beginning of period		59			68			63			35
Prior service credit arising during period		—			—			—			36
Reclassifications from AOCL		(1	)		(2	)		(5	)		(5	)
Balance at end of period		58			66			58			66
AOCL at end of period	$	(1,499	)	$	(1,335	)	$	(1,499	)	$	(1,335	)

The following table provides changes in AOCL, net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended August 31, 2025 and August 31, 2024 (in millions; amounts in parentheses indicate debits to AOCL):

NOTE 4: Financing Arrangements


	Three Months Ended
		2025		2024
Foreign currency translation loss:
Balance at beginning of period		$	(1,420)	$	(1,422)
Translation adjustments		(7)		29
Balance at end of period		(1,427)		(1,393)
Retirement plans adjustments:
Balance at beginning of period		58		63

Reclassifications from AOCL		(2)		(2)
Balance at end of period		56		61
AOCL at end of period		$	(1,371)	$	(1,332)

NOTE 4: FINANCING ARRANGEMENTS

We have a shelf registration statement filed with the SEC that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock and allows pass-through trusts formed by Federal Express to sell, in one or more future offerings, pass-through certificates.

~~Federal Express has issued $970 million of Pass~~Long-~~Through~~Term Certificates, Series 2020-1AA (the “Certificates”) with a fixed interest rate of 1.875% due in February 2034 utilizing pass-through trusts. The Certificates are secured by 19 Boeing aircraft with a net book value of $1.6 billion at February 28, 2025. The payment obligations of Federal Express in respect of the Certificates are fully and unconditionally guaranteed by FedEx.Debt

WeOn ~~have~~July a30, ~~$1.75~~2025, ~~billion~~we ~~three-year~~issued ~~credit~~€850 million ~~agreement~~of ~~(the~~senior ~~“Three-Year~~unsecured ~~Credit~~debt ~~Agreement”)~~under ~~and~~our acurrent ~~$1.75~~shelf ~~billion~~registration ~~five-year~~statement, ~~credit~~comprised ~~agreement~~of ~~(the~~€500 million ~~“Five-Year~~of ~~Credit Agreement” and together with the Three-Year Credit Agreement, the “Credit Agreements”)~~3.50% ~~The Three~~fixed-~~Year~~rate ~~Credit~~notes ~~Agreement~~due ~~and the Five-Year Credit Agreement expire~~ in ~~March~~July ~~2027~~2032 and ~~March 2029, respectively, and each has a $125~~ €350 million ~~letter~~ of ~~credit sublimit~~4.125% ~~The~~fixed-rate ~~Credit~~notes ~~Agreements~~due ~~are~~in ~~available~~July to2037. ~~finance~~We ~~our~~used ~~operations~~a ~~and~~portion ~~other cash flow needs. As~~ of ~~February~~the ~~28,~~net ~~2025,~~proceeds noto ~~amounts~~repay ~~were outstanding under~~ the ~~Credit~~€500 million ~~Agreements,~~aggregate noprincipal ~~commercial~~amount ~~paper was~~ outstanding, ~~and we had $250 million~~ of ~~the~~our ~~letter~~0.45% ofnotes ~~credit~~due ~~sublimit~~at ~~unused~~maturity ~~under~~in ~~the~~August ~~Credit Agreements~~2025. ~~Outstanding~~The ~~commercial~~remaining ~~paper~~net ~~reduces~~proceeds ~~the~~may ~~amount~~be ~~available~~used tofor ~~borrow~~general ~~under~~corporate ~~the Credit Agreements~~purposes.

~~The~~Long-term ~~Credit~~debt, ~~Agreements~~including ~~contain~~current amaturities ~~financial~~and ~~covenant~~exclusive ~~requiring~~of usfinance toleases, ~~maintain~~had acarrying ~~ratio~~values of ~~debt~~$20.4 tobillion ~~consolidated~~at ~~earnings~~August 31, ~~(excluding~~2025 ~~noncash~~and ~~retirement~~$19.9 ~~plans~~billion ~~mark-to-market~~at ~~adjustments~~May 31, ~~noncash pension service costs~~2025, ~~noncash~~with ~~asset~~estimated ~~impairment~~fair ~~charges,~~values ~~business~~of ~~optimization~~$18.2 ~~and~~billion ~~restructuring~~at ~~expenses~~August 31, ~~and~~2025 ~~pro forma cost savings~~ and ~~synergies~~$17.2 ~~associated~~billion ~~with~~at ~~an acquisition) before interest~~May 31, ~~taxes,~~2025. ~~depreciation,~~The ~~and~~annualized ~~amortization~~weighted-average ~~(“adjusted~~interest ~~EBITDA”)~~rate ofon ~~not~~long-term ~~more~~debt ~~than~~was 3.56% toat ~~1.0~~August 31, ~~calculated~~2025. asThe ofestimated ~~the~~fair ~~last~~values ~~day~~were ofdetermined ~~each~~based ~~fiscal quarter~~ on aquoted ~~rolling~~market ~~four-quarters~~prices ~~basis.~~and ~~The~~the ~~ratio~~current ofrates ~~our~~offered for debt towith ~~adjusted~~similar ~~EBITDA~~terms ~~was~~and 1maturities.8 atThe ~~February~~fair ~~28,~~value ~~2025.~~of ~~Additional~~our ~~information~~long-term ondebt ~~the~~is ~~financial~~classified ~~covenant~~as ~~can~~Level be2 ~~found~~within inthe ~~our~~fair ~~Annual~~value ~~Report~~hierarchy.

~~The~~Federal ~~financial~~Express ~~covenant~~has ~~discussed~~issued ~~above~~$970 million isof ~~the~~Pass-Through ~~only significant restrictive covenant in the Credit Agreements. The Credit Agreements contain other customary covenants that do not~~Certificates, ~~individually~~Series or2020-1AA in (the ~~aggregate,~~“Certificates”) ~~materially~~with ~~restrict~~a ~~the~~fixed ~~conduct~~interest rate of ~~our business~~1.875% Wedue ~~are~~ in ~~compliance~~February ~~with~~2034 ~~the~~utilizing ~~financial~~pass-through ~~covenant~~trusts. ~~and~~The ~~all~~Certificates ~~other~~are ~~covenants~~secured inby ~~the~~19 ~~Credit~~Boeing ~~Agreements~~aircraft ~~and~~with doa ~~not~~net ~~expect~~book ~~the~~value ~~covenants~~of to$1.6 ~~affect~~billion ~~our~~at ~~operations~~August 31, ~~including our liquidity or expected funding needs~~2025. IfThe wepayment ~~failed~~obligations toof ~~comply~~Federal ~~with~~Express ~~the~~in ~~financial~~respect ~~covenant~~of ~~or any other covenants in~~ the ~~Credit~~Certificates ~~Agreements,~~are ~~our~~fully ~~access~~and tounconditionally ~~financing~~guaranteed ~~could become limited. Our commercial paper program is backed~~ by ~~unused commitments under the Credit Agreements, and borrowings under the program reduce the amount available under the Credit Agreements~~FedEx.

~~Long-term~~Credit debt, including current maturities and exclusive of finance leases, had carrying values of $19.6 billion at February 28, 2025 and $19.8 billion at May 31, 2024, compared with estimated fair values of $17.5 billion at February 28, 2025 and $17.5 billion at May 31, 2024. The annualized weighted-average interest rate on long-term debt was 3.5% at February 28, 2025. The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of our long-term debt is classified as Level 2 within the fair value hierarchy.Agreements

~~DEBT~~We ~~EXCHANGE~~have ~~OFFERS~~a ~~AND~~$1.75 ~~CONSENT~~billion ~~SOLICITATIONS~~three-year credit agreement (the “Three-Year Credit Agreement”) and a $1.75 Inbillion ~~January~~five-year ~~2025,~~credit inagreement ~~connection~~(the “Five-Year Credit Agreement” and together with the ~~planned~~Three-Year ~~separation~~Credit ofAgreement, ~~FedEx~~the ~~Freight~~“Credit Agreements”). The Three-Year Credit Agreement and the Five-Year Credit Agreement expire in March 2027 and March 2029, werespectively, ~~commenced~~and ~~offers~~each has a $125 million letter of credit sublimit. The Credit Agreements are available to ~~exchange~~finance ~~any~~our operations and ~~all~~other ofcash ~~$16~~flow needs.2 ~~billion~~As of ~~FedEx’s~~August 31, 2025, no amounts were outstanding ~~senior~~under ~~notes~~the ~~(22~~Credit ~~series~~Agreements, inno ~~total)~~commercial ~~for~~paper ~~new~~was ~~notes~~outstanding, toand bewe ~~issued~~had by$250 ~~FedEx~~million of the letter of credit sublimit unused under the Credit Agreements. ~~Concurrently~~Our ~~with~~commercial paper program is backed by unused commitments under the ~~exchange~~Credit ~~offers~~Agreements, weand ~~also~~borrowings ~~solicited~~under ~~consents~~the ~~from~~program ~~eligible~~reduce ~~holders~~the ofamount ~~such~~available under the Credit Agreements.

The Credit Agreements contain a financial covenant requiring us to maintain a ratio of debt to consolidated earnings (excluding noncash retirement plans mark-to-market 14adjustments, noncash pension service costs, noncash asset impairment charges, business optimization and restructuring expenses, and pro forma cost savings and synergies associated with an acquisition) before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) of not more than 3.5 to 1.0, calculated as of the last day of each fiscal quarter on a rolling four-quarters basis. The ratio of our debt to adjusted EBITDA was 1.9 at August 31, 2025. Additional information on the financial covenant can be found in our Annual Report.

notes to adopt certain proposed amendments to each of the indentures governing such notes to provide for the automatic and unconditional release and discharge of the guarantee of FedEx Freight with respect to that series of notes at the time FedEx Freight ceases to be a subsidiary of FedEx in connection with the planned separation (the “Proposed Amendments”).-13-

WeTable ~~completed the exchange offers and consent solicitations in February 2025. An aggregate~~ of $10.7 billion principal amount of U.S. dollar-denominated notes and €940 million principal amount of euro-denominated notes were validly tendered and not properly withdrawn, and the requisite consents were received to adopt the Proposed Amendments with respect to an aggregate of $15.9 billion principal amount of our outstanding senior notes (21 of the 22 series in scope). The new notes issued in connection with the exchange offer have the same interest rate, interest payment dates, maturity date, and optional redemption provisions as the corresponding series of existing notes; provided that (a) the methodology for calculating any make-whole redemption price for the USD-denominated notes will reflect the SIFMA model provisions and (b) FedEx will be permitted to deliver notices of redemption that are subject to one or more conditions precedent with respect to the notes.Contents

~~NOTE~~The 5:financial ~~ACQUISITIONS~~covenant discussed above is the only significant restrictive covenant in the Credit Agreements. The Credit Agreements contain other customary covenants that do not, individually or in the aggregate, materially restrict the conduct of our business. We are in compliance with the financial covenant and all other covenants in the Credit Agreements and do not expect the covenants to affect our operations, including our liquidity or expected funding needs. If we failed to comply with the financial covenant or any other covenants in the Credit Agreements, our access to financing could become limited.

OnNOTE ~~February~~5: 4,COMPUTATION ~~2025,~~OF weEARNINGS ~~acquired~~PER RouteSmart Technologies, Inc. (“RouteSmart”), a global leader in route planning and optimization solutions, for $113 million in FedEx common shares from treasury stock and cash from operations. The majority of the purchase price was allocated to intangible assets and goodwill. The financial results of RouteSmart are included in the FedEx Dataworks operating segment under “Corporate, other and eliminations” from the date of acquisition and were not material to our results of operations or financial condition; therefore, pro forma financial information has not been provided.SHARE

~~NOTE~~The 6:calculation ~~Computation~~ of ~~Earnings~~basic ~~Per~~and ~~Share~~diluted earnings per common share for the three-month periods ended August 31 was as follows (in millions, except per share amounts):

The calculation of basic and diluted earnings per common share for the periods ended February 28, 2025 and February 29, 2024 was as follows (in millions, except per share amounts):



	2025		2024
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	823	$	793
Weighted-average common shares	236		244
Basic earnings per common share	$	3.48	$	3.24

Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	823	$	793
Weighted-average common shares	236		244
Dilutive effect of share-based awards	2		3
Weighted-average diluted shares	238		247
Diluted earnings per common share	$	3.46	$	3.21

Anti-dilutive options excluded from diluted earnings per common share	7.1		4.3

	Three Months Ended				Nine Months Ended
	2025		2024		2025		2024
Basic earnings per common share:
Net earnings allocable to common shares(1)	$	908	$	878	$	2,441	$	2,853
Weighted-average common shares		240		247		242		249
Basic earnings per common share	$	3.79	$	3.55	$	10.09	$	11.43
Diluted earnings per common share:
Net earnings allocable to common shares(1)	$	908	$	878	$	2,441	$	2,853
Weighted-average common shares		240		247		242		249
Dilutive effect of share-based awards		2		3		2		3
Weighted-average diluted shares		242		250		244		252
Diluted earnings per common share	$	3.76	$	3.51	$	9.99	$	11.31
Anti-dilutive options excluded from diluted earnings per common share		4.1		6.3		4.1		6.3

(1)Net earnings available to participating securities were $1 million for both of the three-month periods ended August 31, 2025 and 2024.

~~Net~~NOTE ~~earnings~~6: ~~available~~RETIREMENT to participating securities were $1 million and $1 million for the three-month periods ended February 28, 2025 and February 29, 2024, respectively, and $3 million and $4 million for the nine-month periods ended February 28, 2025 and February 29, 2024, respectively.PLANS

NOTE 7: Retirement Plans

We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans, and postretirement healthcare plans. Key terms of our retirement plans are provided in our Annual Report.

Our retirement plans costs for the three-month periods ended ~~February~~August ~~28,~~31 ~~2025 and February 29, 2024~~ were as follows (in millions):

	Three Months Ended				Nine Months Ended
									2025		2024
	2025		2024		2025		2024
Defined benefit pension plans									$	47	$	70
Defined benefit pension plans	$	69	$	92	$	209	$	274
Defined contribution plans									306		287
Defined contribution plans		278		240		853		722
Postretirement healthcare plans									22		22
Postretirement healthcare plans		22		20		65		64
									$	375	$	379
	$	369	$	352	$	1,127	$	1,060

-Net 15periodic benefit cost of the pension and postretirement healthcare plans for the three-month periods ended August 31 included the following components (in millions):

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended February 28, 2025 and February 29, 2024 included the following components (in millions):



	U.S. Pension Plans				International Pension Plans				Postretirement Healthcare Plans
	2025		2024		2025		2024		2025		2024
Service cost	$	112	$	125	$	10	$	9	$	7	$	7
Other retirement plans expense (income):
Interest cost	378		361		13		12		16		16
Expected return on plan assets	(457)		(430)		(7)		(5)		—		—
Amortization of prior service credit and other	(2)		(2)		—		—		(1)		(1)
	(81)		(71)		6		7		15		15
Net periodic benefit cost	$	31	$	54	$	16	$	16	$	22	$	22

	Three Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2025			2024			2025			2024			2025			2024
Service cost	$	125		$	136		$	9		$	9		$	6		$	7
Other retirement plans expense (income):
Interest cost		361			341			10			10			17			15
Expected return on plan assets		(430	)		(400	)		(4	)		(2	)		—			—
Amortization of prior service credit and other		(2	)		(2	)		—			—			(1	)		(2	)
		(71	)		(61	)		6			8			16			13
Net periodic benefit cost	$	54		$	75		$	15		$	17		$	22		$	20

-14-

	Nine Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2025			2024			2025			2024			2025			2024
Service cost	$	374		$	408		$	29		$	29		$	19		$	21
Other retirement plans expense (income):
Interest cost		1,085			1,022			32			32			49			45
Expected return on plan assets		(1,290	)		(1,199	)		(16	)		(13	)		—			—
Amortization of prior service credit and other		(6	)		(5	)		1			—			(3	)		(2	)
		(211	)		(182	)		17			19			46			43
Net periodic benefit cost	$	163		$	226		$	46		$	48		$	65		$	64

Table of Contents

For ~~2025~~2026, no pension contributions are required for our tax-qualified U.S. domestic pension plan (“U.S. Pension Plan”) as it is fully funded under the Employee Retirement Income Security Act. We made voluntary contributions of $~~800~~200 million to our U.S. Pension Plan during the ~~nine~~three-month period ended ~~February 28~~August 31, 2025.

NOTE 87: ~~Business~~BUSINESS ~~Segment~~SEGMENTS ~~Information~~AND DISAGGREGATED REVENUE

We provide a broad portfolio of transportation, e-commerce, and business services, offering integrated business solutions utilizing our flexible, efficient, and intelligent global network. Our primary operating companies are Federal Express, ~~the world’s largest express transportation company~~ and ~~a leading North American provider of small-package ground delivery services, and~~ FedEx Freight, ~~a leading North American provider of LTL freight transportation services. These companies~~ represent our major service lines and constitute our reportable segments. Our reportable segments include the following businesses:

Federal Express Segment Federal Express (express transportation, small-package ground delivery, and freight transportation) FedEx Freight Segment FedEx Freight (LTL freight transportation)FedEx Custom Critical, Inc. (time-critical transportation)

References to our transportation segments include, collectively, the Federal Express segment and the FedEx Freight segment.

Our Chief Executive Officer is our chief operating decision maker (“CODM”). The CODM is responsible for the company’s operating strategy, growth, and profitability and reviews financial information for our two reportable segments. The CODM uses operating income as the primary measure of segment performance because it reflects the underlying business performance and provides the CODM with a basis for making resource allocation decisions. Operating income is defined as income before other income (expense), interest expense and income tax expense. Our CODM also utilizes operating income in the annual budget and monthly forecasting processes and considers forecast-to-actual variances on a monthly basis, when making resource allocation decisions. Our CODM regularly reviews significant expense details, which include salaries and employee benefits, purchased transportation, rentals and landing fees, depreciation and amortization, fuel, maintenance and repairs, separation and other costs, business optimization costs, and other operating expenses. These expense categories are included within operating expenses in the accompanying unaudited condensed consolidated statements of income and are used by the CODM in assessing performance and allocating resources.

The Federal Express segment operates combined sales, marketing, administrative, and information-technology functions in shared service operations for U.S. customers of our major business units and certain back-office support to FedEx Freight and our other operating segments which allows us to obtain synergies from the combination of these functions. We allocate the net operating costs of these services to reflect the full cost of operating our businesses in the results of those segments. We review and evaluate the performance of FedEx Freight and our other operating segments based on operating income inclusive of these allocations.

Operating expenses for our FedEx Freight segment include allocations of these services from the Federal Express segment. These allocations also include charges and credits for administrative services provided between operating companies. The allocations of net operating costs are based on metrics such as relative revenue or estimated services provided. We believe these allocations approximate the net cost of providing these functions. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our businesses.

- 16 -

Corporate, Other, and Eliminations

Corporate and other includes corporate headquarters costs for executive officers and certain legal and finance functions, certain other costs and credits not attributed to our core business, and certain costs associated with developing integrated business solutions through our FedEx Dataworks, Inc. (“FedEx Dataworks”) operating segment. FedEx Dataworks is focused on creating solutions to transform the digital and physical experiences of our customers and team members.

Also included in Corporate and other ~~are~~is the FedEx Office and Print Services, Inc. (“FedEx Office”) operating segment, which provides an array of document and business services and retail access to our customers for our package transportation businesses, and the FedEx Logistics, Inc. (“FedEx Logistics”) operating segment, which provides integrated supply chain management solutions, specialty transportation, customs brokerage, and global ocean and air freight forwarding.

The results of Corporate, other, and eliminations are not allocated to the other business segments.

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment in order to optimize our resources. Billings for such services are based on negotiated rates and are reflected as revenue of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenue and expenses are eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are not material.

The following table provides a reconciliation of reportable segment revenue and operating income (loss) to our unaudited condensed consolidated financial statement totals for the periods ended February 28, 2025 and February 29, 2024 (in millions):-15-

	Three Months Ended						Nine Months Ended
	2025			2024			2025			2024
Revenue:
Federal Express segment	$	19,181		$	18,672		$	56,327		$	55,871
FedEx Freight segment		2,089			2,205			6,595			7,042
Other and eliminations		890			861			2,784			2,671
	$	22,160		$	21,738		$	65,706		$	65,584
Operating income (loss):
Federal Express segment	$	1,294		$	1,173		$	3,299		$	3,514
FedEx Freight segment		261			341			1,012			1,314
Corporate, other, and eliminations		(263	)		(271	)		(887	)		(824	)
	$	1,292		$	1,243		$	3,424		$	4,004

Table of Contents

The following table ~~provides~~presents ~~a reconciliation of reportable~~ segment ~~assets~~information tofor ~~our~~the ~~unaudited~~three-month ~~condensed~~period ~~consolidated~~end ~~financial~~August 31, ~~statement~~2025 ~~totals as of the periods presented~~ (in millions):

	February 28, 2025(Unaudited)			May 31,2024
		FederalExpressSegment				FedExFreightSegment		Corporate, other, and eliminations		ConsolidatedTotal
Total assets:
Revenue		$	19,116			$	2,257	$	871	$	22,244
Federal Express segment	$	72,252		$	73,259
Operating expenses:
FedEx Freight segment		12,479			11,615
Salaries and employee benefits		6,516				975		571		8,062
Corporate, other, and eliminations		312			2,133
Purchased transportation		5,073				201		214		5,488
	$	85,043		$	87,007
Rentals and landing fees		1,013				74		105		1,192
Depreciation and amortization		954				110		28		1,092
Fuel		760				113		—		873
Maintenance and repairs		737				81		25		843
Separation and other costs		5				9		31		45
Business optimization costs		21				—		46		67
Intercompany allocations (charges)		(233)				162		71		—
Other		3,132				172		92		3,396
Total operating expenses		17,978				1,897		1,183		21,058
Operating income		$	1,138			$	360	$	(312)	1,186
Other (expense) income:
Interest, net										(119)
Other retirement plans, net										60
Other, net(1)										7
Total other (expense) income										(52)
Income before income taxes										1,134
Provision for income taxes										310
Net income										$	824

-(1)Includes 17costs related to the planned spin-off of FedEx Freight of $2 million included in “Corporate, other, and eliminations.”

~~NOTE 9: Commitments~~ -16-

AsTable of ~~February 28, 2025, our purchase commitments under various contracts for the remainder of 2025 and annually thereafter were as follows (in millions):~~Contents

	Aircraft and Aircraft Related		Other(1)		Total
2025 (remainder)	$	429	$	192	$	621
2026		925		800		1,725
2027		278		560		838
2028		587		395		982
2029		393		323		716
Thereafter		1,258		100		1,358
Total	$	3,870	$	2,370	$	6,240

The following table presents segment information for the three-month period ended August 31, 2024 (in millions):

(1) Primarily software and advertising.


	Federal Express Segment		FedEx Freight Segment		Corporate, other, and eliminations		Consolidated Total
Revenue	$	18,305	$	2,329	$	945	$	21,579
Operating expenses:
Salaries and employee benefits	6,201		984		600		7,785
Purchased transportation	4,801		203		271		5,275
Rentals and landing fees	986		71		104		1,161
Depreciation and amortization	935		110		33		1,078
Fuel	954		121		—		1,075
Maintenance and repairs	719		82		28		829
Business optimization costs	43		—		85		128
Intercompany allocations (charges)	(187)		148		39		—
Other	2,900		171		97		3,168
Total operating expenses	17,352		1,890		1,257		20,499
Operating income	$	953	$	439	$	(312)	1,080
Other (expense) income:
Interest, net							(84)
Other retirement plans, net							49
Other, net							11
Total other (expense) income							(24)
Income before income taxes							1,056
Provision for income taxes							262
Net income							$	794

The following table provides a reconciliation of segment assets to our unaudited condensed consolidated financial statement totals as of the periods presented (in millions):


	Federal Express Segment		FedEx Freight Segment		Corporate, other, and eliminations		Consolidated Total
Segment assets
August 31, 2025 (Unaudited)	$	75,045	$	13,274	$	97	$	88,416
May 31, 2025	74,154		12,899		574		87,627

The following table provides a reconciliation of reportable segment capital expenditures to consolidated totals for the three-month periods ended August 31, 2025 and 2024 (in millions).


	Federal Express Segment		FedEx Freight Segment		Corporate, other, and eliminations		Consolidated Total
August 31, 2025	$	568	$	32	$	23	$	623
August 31, 2024	703		35		29		767

-17-

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The following table presents revenue by service type for the three months ended August 31, 2025 and 2024 (in millions):


	Three Months Ended
	August 31, 2025		August 31, 2024
REVENUE BY SERVICE TYPE
Federal Express segment:
Package:
U.S. priority	$	2,767	$	2,591
U.S. deferred	1,273		1,151
U.S. ground	8,654		8,056
Total U.S. domestic package revenue	12,694		11,798
International priority	2,258		2,206
International economy	1,354		1,360
Total international export package revenue	3,612		3,566
International domestic(1)	1,135		1,112
Total package revenue	17,441		16,476
Freight:
U.S.	303		569
International priority	595		526
International economy	528		463
Total freight revenue	1,426		1,558
Other	249		271
Total Federal Express Segment	19,116		18,305
FedEx Freight Segment	2,257		2,329
Other and eliminations(2)	871		945
	$	22,244	$	21,579

(1)International domestic revenue relates to our intra-country operations.

(2)Includes the FedEx Logistics, FedEx Office, and FedEx Dataworks operating segments.

The following table presents geographic revenue information for the three months ended August 31, 2025 and 2024 (in millions):


	August 31, 2025		August 31, 2024
GEOGRAPHICAL INFORMATION(1)
Revenue:
U.S.	$	15,975	$	15,496
International:
Federal Express segment	5,967		5,737
FedEx Freight segment	62		65
Other	240		281
Total international revenue	6,269		6,083
	$	22,244	$	21,579

(1)International revenue includes shipments that either originate in or are destined to locations outside the United States, which could include U.S. payors.

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Table of Contents

The following table presents geographic noncurrent asset information as of August 31, 2025 and May 31, 2025 (in millions):


GEOGRAPHICAL INFORMATION(1)	August 31, 2025 (unaudited)		May 31, 2025
Noncurrent assets:
U.S.	$	56,703	$	57,040
International	12,369		12,201
	$	69,072	$	69,241

(1)Noncurrent assets include property and equipment, operating lease right-of-use assets, goodwill, and other long-term assets. Our flight equipment is registered in the U.S. and is included as U.S. assets; however, many of our aircraft operate internationally.

NOTE 8: COMMITMENTS

As of August 31, 2025, our purchase commitments under various contracts for the remainder of 2026 and annually thereafter were as follows (in millions):


	Aircraft and Aircraft Related		Other(1)		Total
2026 (remainder)	$	808	$	626	$	1,434
2027	1,119		712		1,831
2028	993		545		1,538
2029	413		461		874
2030	205		35		240
Thereafter	1,073		90		1,163
Total	$	4,611	$	2,469	$	7,080

(1) Primarily information technology and advertising contracts.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

As of ~~February 28~~August 31, 2025, we had $~~594~~528 million in deposits and progress payments on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of ~~our~~the accompanying unaudited condensed consolidated balance sheets. Aircraft and aircraft-related contracts are subject to price escalations. The following table is a summary of the key aircraft we are committed to purchase as of ~~February 28~~August 31, 2025, with the year of expected delivery:

	~~Cessna SkyCourier 408~~		~~ATR~~Cessna ~~72-600F~~SkyCourier 408		~~B767F~~		ATR 72-600F	~~B777F~~		~~Total~~B767F		B777F	Total
2025 (remainder)		5		1		2			2		10
2026 (remainder)			15				3			6		—	24
2026		18		6		7			—		31
2027			4				4			—		5	13
2027		—		—		—			—		—
2028			—				4			—		5	9
2028		—		4		—			2		6
2029			—				4			—		—	4
2029		—		4		—			—		4
2030			—				2			—		—	2
Thereafter		—	—	2		—	—		—	—	2	—	—
Total		23	19	17		9	17		4	6	53	10	52

~~A summary of future minimum lease payments under noncancelable operating and finance leases with an initial or remaining term in excess of one year as of February 28, 2025 is as follows (in millions):~~-19-

	Aircraftand RelatedEquipment			Facilitiesand Other			TotalOperatingLeases			Finance Leases			Total Leases
2025 (remainder)	$	32		$	603		$	635		$	13		$	648
2026		125			3,065			3,190			57			3,247
2027		124			2,684			2,808			56			2,864
2028		124			2,338			2,462			56			2,518
2029		117			1,959			2,076			53			2,129
Thereafter		138			9,179			9,317			655			9,972
Total lease payments		660			19,828			20,488			890			21,378
Less imputed interest		(73	)		(3,525	)		(3,598	)		(328	)		(3,926	)
Present value of lease liability	$	587		$	16,303		$	16,890		$	562		$	17,452

Table of Contents

A summary of future minimum lease payments under noncancelable operating and finance leases with an initial or remaining term in excess of one year as of August 31, 2025 is as follows (in millions):


	Aircraft and Related Equipment		Facilities and Other		Total Operating Leases		Finance Leases		Total Leases
2026 (remainder)	$	95	$	2,237	$	2,332	$	85	$	2,417
2027	124		2,917		3,041		116		3,157
2028	124		2,539		2,663		115		2,778
2029	117		2,143		2,260		112		2,372
2030	47		1,795		1,842		95		1,937
Thereafter	91		7,995		8,086		619		8,705
Total lease payments	598		19,626		20,224		1,142		21,366
Less imputed interest	(62)		(3,430)		(3,492)		(347)		(3,839)
Present value of lease liability	$	536	$	16,196	$	16,732	$	795	$	17,527

While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations.

As of ~~February 28~~August 31, 2025, FedEx has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases are generally for build-to-suit facilities and have undiscounted future payments of approximately $1 billion that will commence when FedEx gains beneficial access to the leased asset. Commencement dates are expected to be from calendar years 2025 to 2026.

-NOTE 189: -CONTINGENCIES

~~approximately~~Litigation $0Matters.9 ~~billion~~FedEx and its subsidiaries are subject to various legal proceedings and claims, including lawsuits alleging that ~~will~~Federal ~~commence~~Express ~~when~~should ~~FedEx~~be ~~gains~~treated ~~beneficial~~as ~~access~~the employer or joint employer of drivers employed by service providers engaged by Federal Express, lawsuits containing various class-action allegations of wage-and-hour violations in which plaintiffs claim, among other things, that they were forced to work “off the ~~leased~~clock,” ~~asset.~~were ~~Commencement~~not ~~dates~~paid overtime, or were not provided work breaks or other benefits, and lawsuits alleging that FedEx and its subsidiaries are ~~expected~~responsible for third-party losses related to bevehicle ~~from~~accidents ~~2025~~that could exceed our insurance coverage for such losses. In the opinion of management, the aggregate liability, if any, with respect to ~~2027~~these actions will not have a material adverse effect on our financial position, results of operations, or cash flows.

In March 2025, Federal Express exercised options to purchase eight B777F aircraft, three of which are expected to be delivered in calendar year 2026 and five of which are expected to be delivered in calendar year 2027.

NOTE 10: Contingencies

Service Provider Lawsuits. Federal Express, as successor to FedEx Ground, is defending against lawsuits in which it is alleged that Federal Express should be treated as an employer or joint employer of drivers employed by service providers engaged by Federal Express. These cases are in varying stages of litigation, and we are not currently able to estimate an amount or range of potential loss in all of these matters. However, we do not expect to incur, individually or in the aggregate, a material loss in these matters. Nevertheless, adverse determinations in these matters could, among other things, entitle service providers’ drivers to certain payments, including wages and penalties, from the service providers and Federal Express and result in employment and withholding tax and benefit liability for Federal Express. We continue to believe that Federal Express is not an employer or joint employer of the drivers of these independent businesses.

FedEx Ground Negligence Lawsuit. In December 2022, FedEx Ground was named as a defendant in a lawsuit filed in Texas state court related to the alleged kidnapping and first-degree murder of a minor by a driver employed by a service provider engaged by FedEx Ground. The complaint alleged compensatory and punitive damages against FedEx Ground for negligence and gross negligence, hiring and retention, as well as negligent entrustment. The service provider and driver were also named as defendants in the lawsuit. In February 2025, we reached an agreement to settle the lawsuit for an amount below the previously established immaterial accrual. The accrual now reflects the amount of the settlement.

Other Matters. FedEx and its subsidiaries are subject to other legal proceedings that arise in the ordinary course of business, including certain lawsuits containing various class-action allegations of wage-and-hour violations in which plaintiffs claim, among other things, that they were forced to work “off the clock,” were not paid overtime, or were not provided work breaks or other benefits, as well as other lawsuits containing allegations that FedEx and its subsidiaries are responsible for third-party losses related to vehicle accidents that could exceed our insurance coverage for such losses. In the opinion of management, the aggregate liability, if any, with respect to these other actions will not have a material adverse effect on our financial position, results of operations, or cash flows.

Environmental Matters. SEC regulations require us to disclose certain information about proceedings arising under federal, state, or local environmental provisions involving a governmental authority as a party if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to the SEC regulations, FedEx uses a threshold of $1 million or more for purposes of determining whether disclosure of any such proceedings is required. Applying this threshold, there are no environmental matters required to be disclosed for this period.

NOTE 1110: ~~Supplemental~~SUPPLEMENTAL ~~Cash~~CASH ~~Flow~~FLOW ~~Information~~INFORMATION

Cash paid for interest expense and income taxes for the ~~nine~~three-month periods ended ~~February~~August ~~28,~~31 ~~2025 and February 29, 2024~~ was as follows (in millions):

	~~2025~~			~~2024~~2025			2024
Cash payments for:
Interest (net of capitalized interest)	$	~~582~~		$	~~538~~195		$	158
Income taxes	$	~~1,223~~		$	~~1,265~~112		$	75
Income tax refunds received		~~(26~~	)	(27)	~~(97~~	)	(12)
Cash tax payments/(refunds), net	$	~~1,197~~		$	~~1,168~~85		$	63

Noncash investing and financing activities for the ~~nine~~three-month periods ended ~~February~~August ~~28,~~31 ~~2025 and February 29, 2024~~ was as follows (in millions):

	~~2025~~		~~2024~~2025		2024
Assets obtained in exchange for finance lease obligations	$	~~167~~	$	10120	$	—
Shares of common stock issued from treasury stock for acquisition	$	90	$	—

- 19 20-

Table of Contents

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

FedEx Corporation

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of FedEx Corporation (the Company) as of ~~February 28~~August 31, 2025, the related condensed consolidated statements of income, comprehensive income, ~~and~~ changes in common stockholders’ investment ~~for the three- and nine-month periods ended February 28~~, ~~2025~~ and ~~February 29, 2024, the condensed consolidated statements of~~ cash flows for the ~~nine~~three-month periods ended ~~February 28~~August 31, 2025 and ~~February 29,~~ 2024, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of May 31, ~~2024~~2025, the related consolidated statements of income, comprehensive income, ~~cash flows, and~~ changes in common stockholders’ investment, and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated July 1521, ~~2024~~2025, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of May 31, ~~2024~~2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


/s/ Ernst & Young LLP

Memphis, Tennessee

~~March 20~~September 18, 2025

- 20 21-

~~Item~~Table ~~2. Management’s Discussion and Analysis~~ of ~~Results of Operations and Financial Condition~~Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

GENERAL

The following Management’s Discussion and Analysis of Results of Operations and Financial Condition (“MD&A”) describes the principal factors affecting the results of operations, liquidity, capital resources, and critical accounting estimates of FedEx Corporation (“FedEx”). This discussion should be read in conjunction with the accompanying quarterly unaudited condensed consolidated financial statements and our Annual Report on Form 10-K for the year ended May 31, ~~2024~~2025 (“Annual Report”). Our Annual Report includes additional information about our significant accounting policies, practices, and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties associated with our financial condition and operating results.

We provide a broad portfolio of transportation, e-commerce, and business services, offering integrated business solutions utilizing our flexible, efficient, and intelligent global network. Our primary operating companies are Federal Express Corporation (“Federal Express”), the world’s largest express transportation company and a leading North American provider of small-package ground delivery services, and FedEx Freight, Inc. (“FedEx Freight”), a leading North American provider of less-than-truckload (“LTL”) freight transportation services. See “Reportable Segments” for further discussion. Additional information on our businesses can be found in our Annual Report.

InFollowing ~~connection with~~ our one FedEx consolidation ~~plan~~, ~~on June 1, 2024, FedEx Ground Package System, Inc. (“FedEx Ground”) and FedEx Corporate Services, Inc. (“FedEx Services”) were merged into~~ Federal Express, ~~becoming~~operates a ~~single company operating a~~ unified, fully integrated air-ground express network under the respected FedEx brand. FedEx Freight ~~continues~~provides ~~to provide~~ LTL freight transportation services as a separate subsidiary. ~~Beginning in the first quarter of 2025,~~ Federal Express and FedEx Freight represent our major service lines and constitute our reportable segments. Additionally, the results of FedEx Custom Critical, Inc. (“FedEx Custom Critical”) are included in the FedEx Freight segment instead of the Federal Express segment in 2025. Prior-year amounts were revised to reflect this presentation.

In December 2024, we announced that FedEx’s Board of Directors decided to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company. The transaction, which ~~would~~will be implemented through the spin-off of shares of the new company to FedEx stockholders, is expected to be tax-free for U.S. federal income tax purposes for FedEx stockholders and be completed by June 2026. See Part II, Item 1A. “Risk Factors – The planned spin-off of FedEx Freight may not be completed on the terms or timeline currently contemplated, if at all, and there is no guarantee that the spin-off, if completed, will achieve the intended financial and strategic benefits.”

In January 2025, the Board of Directors approved a change in FedEx’s fiscal year end from May 31 to December 31. The planned fiscal year change ~~will~~is expected to be effective June 1, 2026.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, ~~2025~~2026 or ended May 31 of the year referenced, and comparisons are to the corresponding period of the prior year. References to our transportation segments include, collectively, the Federal Express segment and the FedEx Freight segment.

The key indicators necessary to understand our operating results include:

•the overall customer demand for our various services based on macroeconomic factors and the global economy;

•the volumes of transportation services provided through our networks, primarily measured by our average daily volume and shipment weight and size;

•the mix of services purchased by our customers;

•the prices we obtain for our services, primarily measured by yield (revenue per package or pound, or revenue per shipment, or hundredweight for LTL freight shipments);

•our ability to manage our cost structure (capital expenditures and operating expenses) to match shifting volume levels; and

•the timing and amount of fluctuations in fuel prices and our ability to recover incremental fuel costs through our fuel surcharges.

- 21 -

Trends Affecting Our Business

The following trends significantly affect 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 – Business Optimization Costs and – Outlook” and “Financial Condition – 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 global trade growth. The decline in U.S. imports of consumer goods that started in late 2022, along with slowed global industrial production, has contributed to weakened business conditions for the transportation industry. Consequently, this environment has led to lower shipments at FedEx Freight, negatively affecting our results in the third quarter and nine months of 2025. Additionally, the U.S. presidential administration is in the process of significantly increasing the rates and broadening the scope of tariffs imposed on goods imported into the U.S. In response, several foreign governments have imposed new tariffs on certain goods imported from the U.S., and additional retaliatory measures against U.S. goods are expected. These or additional changes in U.S. or international trade policy, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions for the transportation industry.

-22-

Table of Contents

started in late 2022, along with slowed global industrial production, has contributed to weakened business conditions for the transportation industry. Consequently, this environment has led to lower shipments at FedEx Freight, negatively affecting our results in the first quarter of 2026.

Additionally, since the third quarter of 2025 there have been significant changes within the global trade environment, such as the August 2025 removal of the de minimis exemption for goods imported into the U.S. from countries other than China. The uncertain and evolving global trade environment has contributed to lower international export package volumes, negatively affecting our results in the first quarter of 2026. Continued uncertainty and volatility in the global trade environment could lead to further weakened business conditions for the transportation industry.

Inflation and Interest Rates

During the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026, global inflation ~~decelerated~~moderated year-over-year but ~~continues~~continued to be ~~above historical levels~~elevated. Additionally, global interest rates remained ~~elevated~~steady in an effort to curb inflation. We are experiencing pressure on demand for our transportation services, particularly our priority services, as ~~elevated~~stagnant inflation and interest rates ~~are~~continue to negatively ~~affecting~~affect consumer and business spending. We expect inflation and ~~high~~elevated interest rates to continue to negatively affect our results of operations for the remainder of ~~2025~~2026. The changes in trade policy discussed above under “Macroeconomic Conditions” could also exacerbate global inflation.

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 affect our operating results either positively or negatively in the short-term. During the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026, lower fuel prices negatively affected yields ~~through~~due to lower fuel surcharges atand ~~FedEx~~led ~~Freight~~to ~~and~~ reduced fuel expense at both of our transportation segments.

Geopolitical Conflicts

Given the nature of our business and global operations, geopolitical conflicts may adversely affect our business and results of operations. While we do not expect ongoing geopolitical conflicts between Russia and Ukraine and in the Middle East, or escalations thereof, to have a direct material effect on our business or results of operations, the broader consequences are adversely affecting the global economy and may also have the effect of heightening other risks disclosed inunder ~~our~~Part ~~Annual~~I, ~~Report~~Item 1A. “Risk Factors.”

RESULTS OF OPERATIONS

Many of our operating expenses are directly affected by revenue and volume levels, and we expect these operating expenses to fluctuate on a year-over-year basis consistent with changes in revenue and volumes. Therefore, the discussion of operating expense captions focuses on the key drivers and trends affecting expenses other than those factors strictly related to changes in revenue and volumes. The line item “Other” includes costs associated with outside service contracts (such as information technology services, temporary labor, ~~facilities services~~security, and ~~security~~facilities services), insurance, professional fees, and ~~operational~~credit ~~supplies~~losses.

- 22 23-

Table of Contents

CONSOLIDATED RESULTS

The following tables compare summary operating results and changes in revenue and operating income (loss) (dollars in millions, except per share amounts) for the periods ended ~~February 28~~August 31, 2025 and ~~February 29,~~ 2024:

	~~Three Months Ended~~	Three Months Ended							~~Percent~~				~~Nine Months Ended~~Percent						~~Percent~~
	~~2025~~	2025			~~2024~~			2024	~~Change~~				~~2025~~Change			~~2024~~			~~Change~~
Revenue	$	~~22,160~~$	22,244		$	~~21,738~~		$	21,579	2			$3	~~65,706~~		$	~~65,584~~			—
Operating income (loss):
Federal Express segment		1,~~294~~138				~~1,173~~		953		10			19	~~3,299~~			~~3,514~~			(6	)
FedEx Freight segment		~~261~~360				~~341~~		439		~~(23~~	)		(18)	~~1,012~~			~~1,314~~			~~(23~~	)
Corporate, other, and eliminations		(~~263~~312)	)			~~(271~~	)	(312)		3			—	~~(887~~	)		~~(824~~	)		(8	)
Consolidated operating income		1,~~292~~186				~~1,243~~		1,080		4			10	~~3,424~~			~~4,004~~			~~(14~~	)
Operating margin:
Federal Express segment		6.70	%	%		~~6.3~~	%	5.2		40%		bp	80	~~5.9~~	%bp		~~6.3~~	%		~~(40~~	)	bp
FedEx Freight segment		1216.50	%	%		~~15.5~~	%	18.8		~~(300~~%	)	bp	(280)	~~15.3~~	%bp		~~18.7~~	%		~~(340~~	)	bp
Consolidated operating margin		5.83	%	%		~~5.7~~	%	5.0		10%		bp	30	~~5.2~~	%bp		~~6.1~~	%		~~(90~~	)	bp
Consolidated net income	$	~~909~~$	824		$	~~879~~		$	794	3			$4	~~2,444~~		$	~~2,857~~			~~(14~~	)
Diluted earnings per share	$	~~3.76~~$	3.46		$	~~3.51~~		$	3.21	7			$8	~~9.99~~		$	~~11.31~~			~~(12~~	)

	~~Year-over-Year Changes~~						Year-over-Year Changes
	~~Revenue~~						Revenue	~~Operating Income (Loss)~~						Operating Income (Loss)
	Three MonthsEnded			Nine Months Ended				Three MonthsEnded			Nine Months Ended
Federal Express segment							$	811						$	185
Federal Express segment	$	509		$	456			$	121		$	(215	)
FedEx Freight segment							(72)							(79)
FedEx Freight segment		(116	)		(447	)			(80	)		(302	)
Corporate, other, and eliminations							(74)							—
Corporate, other, and eliminations		29			113				8			(63	)
							$	665						$	106
	$	422		$	122			$	49		$	(580	)

Overview

Operating income increased 410% in the ~~third~~first quarter ~~and~~of ~~decreased~~2026 ~~14%~~primarily indue ~~the~~to ~~nine~~improved ~~months~~yields ~~of 2025. Operating income~~ for ~~the~~our ~~third~~U.S. ~~quarter~~domestic and ~~nine~~international ~~months~~priority ofpackage ~~2025~~services, ~~was~~structural ~~positively~~cost ~~affected~~reductions byfrom ~~continued~~business ~~savings~~optimization ~~related~~initiatives, toincluding from DRIVE, ~~increased~~initiatives ~~transportation~~commenced ~~segment~~in ~~base~~prior ~~yields~~years, and higher ~~demand for~~ U.S. ~~ground~~domestic ~~and~~package ~~international~~demand ~~export~~at ~~package~~Federal ~~services~~Express. ~~Our~~Operating ~~DRIVE~~income ~~initiatives~~ for the ~~nine~~first ~~months~~quarter of ~~2025~~2026 ~~included~~was ~~the~~negatively ~~continued~~affected ~~transformation~~by ofincreased ~~our~~operating ~~structural network~~expenses, ~~improving~~decreased ~~the~~yields ~~efficiency~~for of our ~~information~~international ~~technology~~economy ~~and~~package ~~back-office functions~~services, ~~optimizing~~lower ~~operations~~international inpackage ~~Europe,~~export ~~and~~volume ~~increasing~~reflecting ~~linehaul~~the ~~efficiencies.~~negative ~~Operating~~impacts ~~income~~from ~~for~~ the ~~third~~volatile ~~quarter~~global ~~and~~trade ~~nine months of 2025 was negatively affected by increased purchased transportation and wage rates~~environment, the expiration of our contract with the U.S. Postal Service (“USPS”), ~~higher~~on ~~business~~September ~~optimization~~29, ~~costs~~2024, and lower ~~fuel~~revenue ~~surcharges~~ at FedEx Freight. ~~The~~primarily ~~results~~due ~~for~~to ~~the~~macroeconomic ~~nine months of 2025 were also negatively affected by one fewer operating day~~conditions.

Operating income includes ~~expenses~~business optimization costs of $~~179~~67 million ($~~137~~52 million, net of tax, or $0.5622 per diluted share) in the ~~third~~first quarter ~~and $633 million ($484 million, net~~ of ~~tax,~~2026 orrelated ~~$1.98~~to ~~per~~initiatives ~~diluted~~to ~~share)~~reduce instructural ~~the~~and ~~nine~~overhead ~~months~~costs ofand ~~2025 associated with our business optimization strategy~~ to drive efficiency ~~and~~through ~~lower~~Network ~~our~~2.0. ~~overhead~~We ~~and~~incurred ~~support~~business optimization costs. Weof ~~recognized~~ $~~114~~128 million ($8798 million, net of tax, or $0.3539 per diluted share) ~~of expenses~~ in the ~~third~~first quarter ~~and $364 million ($278 million, net~~ of ~~tax,~~2025 orrelated ~~$1.10~~to ~~per~~our ~~diluted~~transformation ~~share) in the nine months of 2024 under this program~~initiatives. See the “Business Optimization Costs” section of this MD&A for more information.

~~Operating~~We ~~income~~incurred ~~includes~~costs ~~net~~related ~~expenses~~to the planned spin-off of FedEx Freight of $3843 million ($2933 million, net of tax, or $0.1214 per diluted share) in the ~~third~~first quarter of ~~2025~~2026. ~~for~~These ~~international~~costs ~~regulatory~~consist of $41 million primarily related to professional services included in the “Separation and ~~legacy~~other costs” caption of the accompanying unaudited condensed consolidated statements of income, and $2 million included in the “Other, net” caption of the accompanying unaudited condensed consolidated statements of income. These costs are included in Corporate, other, and eliminations; FedEx ~~Ground~~Freight; ~~legal~~and ~~matters~~Federal Express. We did not incur any FedEx Freight spin-off costs in the first quarter of 2025.

We ~~incurred~~repurchased ~~costs~~$500 ~~related~~million toof our common stock in the ~~planned~~first ~~spin-off~~quarter of ~~FedEx~~2026 ~~Freight~~through ofopen ~~$23~~market ~~million~~transactions. ~~($17~~Share ~~million,~~repurchases ~~net~~had ofa ~~tax,~~benefit orof $0.0702 per diluted share) infor the ~~third~~first quarter of ~~2025~~2026. ~~These~~As ~~costs~~of ~~consist~~August 31, of2025, $181.6 ~~million~~billion ~~related~~remained available to ~~the~~be ~~debt~~used ~~exchange~~for ~~offer~~repurchases ~~and~~under ~~consent~~the ~~solicitation~~2024 ~~transactions~~stock ~~discussed~~repurchase inprogram. See Note 41 of the accompanying unaudited condensed consolidated financial statements, ~~which~~“Financial isCondition ~~included~~– inLiquidity ~~interest, net~~ and $5– ~~million~~Liquidity ofOutlook” ~~professional~~below, ~~fees~~and ~~which~~Part isII, ~~included~~Item ~~in other~~2. We“Unregistered ~~did~~Sales ~~not~~of ~~incur~~Equity ~~any~~Securities ~~FedEx~~and ~~Freight~~Use ~~spin-off~~of ~~costs~~Proceeds” ~~in the first half~~ of ~~2025~~this orForm in10-Q ~~the~~for ~~three~~additional ~~or nine months of 2024~~information.

~~We repurchased an aggregate of $497 million of our common stock through open market transactions during the third quarter of 2025. During the nine~~-month period ended February 28, 2025, we repurchased 8.9 million shares of FedEx common stock through accelerated share repurchase (“ASR”) and open market transactions at an average price of $281.74 per share for a total of $2.5 billion. Share repurchases had a benefit of $0.12 per diluted share for the third quarter and $0.21 per diluted share for the nine months of 2025. As of February 28, 2025, $2.6 billion remained available to be used for repurchases under the 2024 stock repurchase program. 24-

-Table 23of -Contents

~~See~~The ~~Note~~following 1graphs offor ~~the~~Federal ~~accompanying~~Express ~~unaudited condensed consolidated financial statements, “Financial Condition – Liquidity~~ and –FedEx ~~Liquidity~~Freight ~~Outlook”~~show ~~below,~~selected ~~and~~volume ~~Part~~trends ~~II,~~(in ~~Item~~thousands) 2.calculated ~~“Unregistered~~on ~~Sales~~a of5-day-per-week ~~Equity~~basis ~~Securities~~over ~~and~~the ~~Use~~five ofmost ~~Proceeds”~~recent ~~of this Form 10-Q for additional information.~~quarters:

~~Prior~~(1)International ~~year~~domestic ~~statistical~~average ~~information~~daily ~~has~~package ~~been~~volume ~~revised~~relates to ~~conform~~our tointernational ~~the~~intra-country ~~current year presentation~~operations. ~~The~~International ~~following~~export ~~graphs~~average ~~for~~daily ~~Federal~~package ~~Express and FedEx Freight show selected~~ volume ~~trends~~relates ~~(in~~to ~~thousands)~~our ~~calculated~~international onpriority aand ~~5-day-per-week~~economy ~~basis~~services. ~~over the five most recent quarters:~~

(2)International ~~domestic~~ average daily ~~package~~freight ~~volume~~pounds ~~relates~~relate to our international ~~intra-country operations. International export average daily package volume relates to our international~~ priority and economy services.

~~International average daily freight pounds relate to our international priority and economy services.~~ -25-

-Table 24of -Contents

~~Prior year statistical information has been revised to conform to the current year presentation.~~ The following graphs for Federal Express and FedEx Freight show selected yield trends over the five most recent quarters:

(1)International export revenue per package relates to our international priority and economy services. International domestic revenue per package relates to our international intra-country operations.

(2)International freight revenue per pound relates to our international priority and economy services.

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Table of Contents

Revenue

Revenue increased 23% in the ~~third~~first quarter ~~and was flat in the nine months~~ of ~~2025~~2026 primarily due to base yield ~~improvement~~improvements, ~~at both of our transportation segments and~~ higher volume ~~at Federal Express~~, ~~offset by lower volume~~ and ~~fuel~~favorable ~~surcharges at FedEx Freight and unfavorable currency~~ exchange rates. ~~The~~at ~~increases~~Federal inExpress, ~~revenue~~partially ~~during~~offset by the ~~nine~~expiration ~~months~~ of ~~2025~~our ~~were~~contract ~~also~~with ~~offset~~the byUSPS, ~~one~~lower ~~fewer~~fuel ~~operating~~surcharges, ~~day~~and atlower ~~both~~shipments ~~of our transportation segments~~ and ~~reduced~~base ~~demand~~yields ~~surcharges~~ at ~~Federal~~FedEx ~~Express~~Freight.

Federal Express segment revenue increased 34% in the ~~third~~first quarter ~~and 1% in the nine months~~ of ~~2025~~2026 primarily due to ~~increased~~improved ~~deferred~~base ~~and~~yields, increased U.S. ~~ground~~domestic and international economy package ~~volume~~volumes, and ~~improved~~favorable ~~base~~exchange ~~yields~~rates, partially offset by ~~lower priority package volume,~~ the expiration of our contract with the USPS ~~on September 29~~, ~~2024,~~lower ~~and~~international ~~unfavorable~~priority ~~currency~~package ~~exchange~~volume ~~rates.~~including ~~Federal Express revenue for~~ the ~~nine~~negative ~~months~~impacts offrom ~~2025~~global ~~was~~trade ~~also~~policies, ~~negatively affected by one fewer operating day~~ and ~~reduced~~lower ~~demand~~fuel surcharges. FedEx Freight revenue decreased 53% in the ~~third~~first quarter ~~and 6% in the nine months~~ of ~~2025~~2026 primarily due to ~~lower~~due ~~shipments,~~to ~~fuel~~lower ~~surcharges,~~volume and ~~weight~~lower ~~per shipment, partially offset by~~ base ~~yield improvement~~yields. ~~FedEx Freight revenue for the nine months of 2025 was also negatively affected by one fewer operating day.~~ Revenue at Corporate, other, and eliminations ~~increased~~decreased in the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026 primarily due to ~~higher~~lower yields and ~~volume~~demand at FedEx Logistics, Inc. (“FedEx Logistics”).

Operating Expenses

The following table compares operating expenses expressed as dollar amounts (in millions) and as a percent of revenue for the periods ended ~~February 28~~August 31, 2025 and ~~February 29~~August 31, 2024:

	~~Three Months Ended~~		Three Months Ended		~~Percent~~				~~Nine Months Ended~~		Percent		~~Percent~~
	~~2025~~		~~2024~~2025		~~Change~~		2024		~~2025~~		~~2024~~Change		~~Change~~
Operating expenses:
Salaries and employee benefits	$	~~7,879~~	$	78,~~693~~062		2	$	7,785	$	~~23,543~~	$4	~~23,311~~		1
Purchased transportation		~~5,634~~	5,488	~~5,345~~		5	5,275			~~16,409~~	4	~~15,776~~		4
Rentals and landing fees		~~1,178~~	1,192	~~1,145~~		3	1,161			~~3,507~~	3	~~3,434~~		2
Depreciation and amortization		~~1,066~~	1,092	~~1,072~~		(1	)1,078			~~3,207~~	1	~~3,183~~		1
Fuel		~~889~~	873	~~1,140~~		~~(22~~	)1,075			~~2,911~~	(19)	~~3,569~~		~~(18~~	)
Maintenance and repairs		~~783~~	843	~~804~~		(3	)829			~~2,443~~	2	~~2,482~~		(2	)
Business optimization costs		179		114		57				633		364		74
Separation and other costs			45				—				NM
Other		3,260		3,182		2				9,629		9,461		2
Business optimization costs			67				128				(48)
Total operating expenses		20,868		20,495		2				62,282		61,580		1
Other			3,396				3,168				7
Operating income	$	1,292	$	1,243		4			$	3,424	$	4,004		(14	)
Total operating expenses			21,058				20,499				3
Operating income			$	1,186			$	1,080			10

	~~Percent of Revenue~~			Percent of Revenue
	~~Three Months Ended~~			Three Months Ended				~~Nine Months Ended~~
	~~2025~~			~~2024~~2025				~~2025~~		2024		~~2024~~
Operating expenses:
Salaries and employee benefits		~~35.6~~	%	36.2	~~35.4~~	%	%		~~35.8~~	36.1	%	%	~~35.5~~	%
Purchased transportation		~~25.4~~		24.7	~~24.6~~				~~25.0~~	24.4			~~24.1~~
Rentals and landing fees		~~5.3~~		5.4	~~5.3~~				~~5.3~~	5.4			~~5.2~~
Depreciation and amortization		~~4.8~~		4.9	~~4.9~~				~~4.9~~	5.0			~~4.9~~
Fuel		~~4.0~~		3.9	~~5.3~~				~~4.4~~	5.0			~~5.4~~
Maintenance and repairs		~~3.6~~		3.8	~~3.7~~				~~3.7~~	3.8			~~3.8~~
Business optimization costs		0.8			0.5				1.0				0.6
Separation and other costs				0.2						—
Other		14.7			14.6				14.7				14.4
Business optimization costs				0.3						0.6
Total operating expenses		94.2			94.3				94.8				93.9
Other				15.3						14.7
Operating margin		5.8	%		5.7		%		5.2		%		6.1	%
Total operating expenses				94.7						95.0
Operating margin				5.3		%				5.0		%

Operating income increased 410% in the ~~third~~first quarter ~~and~~of ~~decreased~~2026 ~~14%~~primarily indue ~~the~~to ~~nine~~improved ~~months~~yields ~~of 2025. Operating income~~ for ~~the~~our ~~third~~U.S. ~~quarter~~domestic and ~~nine~~international ~~months~~priority ofpackage ~~2025~~services, ~~was~~structural ~~positively~~cost ~~affected~~reductions byfrom ~~continued~~business ~~savings~~optimization ~~related~~initiatives, toincluding from DRIVE, ~~increased~~initiatives ~~transportation~~commenced ~~segment~~in ~~base~~prior ~~yields~~years, and ~~higher~~increased ~~demand for~~ U.S. ~~ground~~domestic ~~and~~package ~~international~~demand ~~export~~for ~~package~~Federal ~~services~~Express. Operating income for the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026 was negatively affected by increased ~~purchased~~operating ~~transportation and wage rates~~expenses, ~~the~~decreased ~~expiration~~yields offor our ~~contract~~international ~~with~~economy ~~the~~package ~~USPS~~services, ~~higher~~lower ~~business~~international ~~optimization~~package ~~costs,~~volume ~~and~~including ~~lower~~the ~~fuel~~negative ~~surcharges~~impacts atfrom ~~FedEx~~global ~~Freight.~~trade ~~The~~policies, ~~results~~the ~~for~~expiration ~~the~~of ~~nine~~our ~~months~~contract ofwith ~~2025~~the ~~were~~USPS, ~~also~~and ~~negatively~~lower ~~affected~~revenue byat ~~one~~FedEx ~~fewer~~Freight ~~operating~~primarily ~~day~~due to macroeconomic conditions.

Purchased transportation expense increased 5% in the third quarter and 4% in the nine months of 2025 primarily due to higher rates as well as an increase in commercial linehaul to support international economy volume growth and network changes, partially offset by savings from our DRIVE initiatives, lower fuel prices, and favorable currency exchange rates. Purchased transportation also increased -27-

-Table 26of -Contents

~~in the third quarter of 2025 due to higher U.S. ground volume.~~ Salaries and employee benefits expense increased 24% in the ~~third~~first quarter ~~and 1% in the nine months~~ of ~~2025~~2026 primarily due to an increase in wage rates, ~~increased~~unfavorable ~~staffing~~exchange ~~to align with higher volume~~rates, and anhigher ~~increase~~employee ~~in retirement~~ benefits ~~due to changes in our deferred contribution plan that increased the number of eligible employees at Federal Express~~, partially offset by ~~savings~~lower ~~from~~variable ~~our DRIVE initiatives and favorable currency exchange rates. Variable~~ incentive compensation. ~~had~~Purchased atransportation ~~negative~~expense ~~effect~~increased on4% ~~salaries~~in ~~and employee benefits expense for~~ the ~~third~~first quarter ~~and~~of a2026 ~~positive~~primarily ~~effect~~due ~~for~~to ~~the~~higher ~~nine~~rates ~~months~~and ~~of 2025~~volume. Other operating expenses increased 27% in ~~both~~ the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026 primarily due to anhigher ~~increase~~professional infees, credit losses, and self-insurance accruals. Fuel expense decreased 2219% in the ~~third~~first quarter ~~and~~of ~~18%~~2026 indue ~~the~~to ~~nine~~lower ~~months~~fuel ofprices ~~2025~~and ~~primarily~~the ~~due~~expiration toof aour ~~decrease~~contract inwith ~~fuel~~the ~~prices and usage~~USPS.

Business Optimization Costs

InOur ~~the~~business ~~second~~optimization ~~quarter~~costs ofrelated ~~2023,~~to wetransformation ~~announced~~initiatives ~~DRIVE,~~aimed ~~a comprehensive program~~ to improve long-term profitability., ~~This program includes a business optimization plan to~~ drive efficiency within and ~~among~~between our transportation segments, lower our overhead and support costs, and transform our digital capabilities. WeCosts ~~have~~included ~~commenced~~in ~~our~~the ~~plan~~“Business tooptimization ~~consolidate~~costs” ~~our~~caption ~~sortation~~of ~~facilities~~the ~~and~~accompanying ~~equipment,~~unaudited ~~reduce~~condensed ~~pickup-and-delivery~~consolidated ~~routes,~~statements ~~and~~of ~~optimize~~income ~~our~~relate ~~enterprise linehaul network by moving beyond discrete collaboration~~ to anour ~~end-to-end optimized network through~~ Network 2.0 program, the ~~multi-year~~Europe ~~effort~~workforce toreduction ~~improve the efficiency with which FedEx picks up~~plan, ~~transports,~~ and ~~delivers~~other ~~packages~~DRIVE ininitiatives ~~the~~commenced ~~U.S.~~in ~~and~~prior ~~Canada~~years.

We ~~have~~incurred ~~implemented~~business ~~Network~~optimization 2.costs of $67 million ($52 million, net of tax, or $0.22 ~~optimization~~per diluted share) in ~~more~~the ~~than~~first ~~200~~quarter ~~locations~~of 2026, and $128 million ($98 million, net of tax, or $0.39 per diluted share) in the ~~U.S.~~first ~~and~~quarter ~~Canada~~of 2025. ~~Contracted~~These ~~service~~costs ~~providers~~were ~~will~~primarily ~~handle~~related ~~the~~to ~~pickup~~professional services and ~~delivery~~severance ofand ~~Federal~~are ~~Express~~included ~~packages~~ in ~~some~~Corporate, ~~locations~~other, ~~while~~and ~~employee~~eliminations ~~couriers~~and ~~will~~Federal ~~handle others~~Express.

InNetwork ~~June 2024, Federal Express announced a workforce reduction plan in Europe as part of its ongoing measures to reduce structural costs~~2. The plan will impact approximately 1,500 employees in Europe across back-office and commercial functions. The execution of the plan is subject to a consultation process that is expected to occur over an 18-month period in accordance with local country processes and regulations. We expect savings from the plan to be between $125 million and $175 million on an annualized basis beginning in 2027.0

WeNetwork ~~incurred~~2.0 ~~business~~is ~~optimization~~our ~~costs,~~multi-year ~~including~~effort ~~the~~to ~~workforce~~improve ~~reduction~~the ~~plan~~efficiency inwith ~~Europe,~~which ofFedEx ~~$179~~picks ~~million ($137 million~~up, ~~net of tax~~transports, orand ~~$0.56~~delivers ~~per~~packages ~~diluted share)~~ in the ~~third~~U.S. ~~quarter~~ and ~~$633~~Canada. ~~million~~Through ~~($484~~Network ~~million~~2.0, ~~net~~we ofcontinue ~~tax,~~to orconsolidate ~~$1.98~~our ~~per~~sortation ~~diluted~~facilities ~~share)~~and inequipment, ~~the~~reduce ~~nine~~pickup-and-delivery ~~months~~routes, ofand ~~2025.~~optimize ~~These~~our ~~costs~~enterprise ~~were~~linehaul ~~primarily~~network ~~related~~by tomoving ~~professional~~beyond ~~services~~discrete ~~and~~collaboration ~~severance~~to ~~and~~an ~~are~~end-to-end ~~included~~optimized innetwork. ~~Federal~~We ~~Express~~have ~~and~~implemented ~~Corporate,~~Network ~~other, and eliminations~~2.0 Weoptimization ~~incurred~~in ~~business~~approximately ~~optimization~~360 ~~costs~~locations ofin ~~$114~~the ~~million~~U.S ~~($87~~and ~~million,~~Canada ~~net~~as of ~~tax~~August 31, ~~or $0~~2025.35 ~~per~~Service ~~diluted~~providers ~~share)~~will inhandle the ~~third~~pickup ~~quarter~~ and ~~$364~~delivery ~~million~~of ~~($278~~Federal ~~million,~~Express ~~net~~packages ofin ~~tax,~~some orlocations ~~$1.10~~while ~~per~~employee ~~diluted~~couriers ~~share)~~will inhandle ~~the~~others. ~~nine~~We ~~months~~completed ofCanada’s ~~2024.~~implementation ~~These~~of ~~costs~~Network ~~were~~2.0 ~~primarily~~in ~~related~~the tofourth ~~professional~~quarter ~~services~~of 2025 and ~~severance~~expect ~~and~~to ~~are~~complete ~~included~~the inU.S. ~~Corporate,~~implementation ~~other,~~by ~~and~~the ~~eliminations~~end ~~and~~of ~~Federal~~calendar ~~Express~~2027.

~~We expect the pre-tax cost of the severance benefits and legal and professional fees to be provided under and related to our workforce reduction plan in~~ Europe to range from $250 million to $300 million in cash expenditures through 2026. In the nine months of 2025, we incurred $220 million of costs related to this plan. We expect the aggregate pre-tax cost of our business optimization activities to be approximately $1.7 billion through 2025. The timing and amount of our business optimization expenses and the related cost savings from the workforce reduction plan ~~may change as we revise and implement our plans. The identification of costs as business optimization-related expenditures is subject to our disclosure controls and procedures.~~

~~FedEx~~Our ~~Freight~~workforce ~~Spin~~reduction plan in Europe to reduce structural costs continues and is expected to impact approximately 1,400 employees across back-~~Off~~office ~~Costs~~and commercial functions. The execution of the plan is subject to a consultation process that is expected to occur over an 18-month period in accordance with local country processes and regulations. We expect savings from the plan to be approximately $150 million on an annualized basis beginning in calendar 2026.

We ~~incurred~~expect ~~costs related to~~ the ~~planned spin~~pre-~~off~~tax cost of ~~FedEx~~the ~~Freight~~severance ofbenefits ~~$23~~and ~~million~~legal ~~($17~~and ~~million,~~professional ~~net~~fees ofto ~~tax,~~be orprovided ~~$0.07~~under ~~per~~and ~~diluted~~related ~~share)~~to in the ~~third~~plan ~~quarter~~to ofbe ~~2025.~~approximately ~~These~~$250 ~~costs~~million ~~are included~~ in ~~Corporate,~~cash ~~other,~~expenditures. ~~and~~These ~~eliminations~~charges ~~and~~are ~~consist~~expected ofto ~~$18~~be ~~million~~incurred ~~related~~through tofiscal ~~the~~year ~~debt~~2026 ~~exchange offer~~ and ~~consent~~will ~~solicitation~~be ~~transactions~~classified ~~discussed~~as inbusiness ~~Note~~optimization 4expenses. ofIn the ~~accompanying~~first ~~unaudited~~quarter ~~condensed~~of ~~consolidated financial statements which is included in interest~~2026, ~~net~~we ~~and~~incurred $53 million of ~~professional~~costs ~~fees~~related ~~which~~to isthis ~~included in other~~plan. WeThe ~~did~~timing ~~not~~and ~~incur~~amount ~~any~~of ~~FedEx~~our ~~Freight~~business ~~spin-off~~optimization ~~costs~~expenses inand the ~~first~~related ~~half~~cost ofsavings ~~2025~~from orthe inworkforce ~~the~~reduction ~~three~~plan ormay ~~nine~~change ~~months~~as ofwe ~~2024~~revise and implement our plans.

Separation and Other Costs

FedEx Freight separation

We incurred costs related to the planned spin-off of FedEx Freight of $43 million ($33 million, net of tax, or $0.14 per diluted share) in the first quarter of 2026. These costs consist of $41 million primarily related to professional services included in the “Separation and other costs” caption of the accompanying unaudited condensed consolidated statements of income, and $2 million included in the “Other, net” caption of the accompanying unaudited condensed consolidated statements of income. These costs are included in Corporate, other, and eliminations; FedEx Freight; and Federal Express. We did not incur any FedEx Freight spin-off costs in the first quarter of 2025.

Fiscal year change

We incurred costs related to the fiscal year change of $4 million ($3 million, net of tax, or $0.01 per diluted share) in the first quarter of 2026. These costs were primarily related to professional fees and are included in Federal Express. We did not incur any fiscal year change costs in the first quarter of 2025.

Income Taxes

Our effective tax rate was 2327.03% for the ~~third~~first quarter ~~and 24.1% for the nine months~~ of ~~2025,~~2026 compared to 2524.78% for the ~~third~~first quarter ~~and 25.0% for the nine months~~ of ~~2024~~2025. The ~~third~~first quarter ~~2025~~2026 tax rate was ~~favorably~~unfavorably impacted by a ~~net~~non-recurring income tax ~~benefit~~expense of $4616 million ~~arising~~($0.07 ~~primarily~~per ~~from~~diluted ~~changes~~share) inprimarily ~~our~~as ~~corporate~~the ~~legal~~result ~~entity~~of ~~structure~~an ~~and~~examination ~~revisions~~ of prior year ~~estimates for actual~~ tax return ~~results~~filings.

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Table of Contents

On July 4, 2025, the One Big Beautiful Bill Act was signed into law. Certain provisions within the act are interdependent and have implications for both the effective tax rate and cash taxes. We are currently in the process of evaluating these provisions.

We are subject to taxation in the U.S. and various U.S. state, local, and foreign jurisdictions. We are currently under examination by the Internal Revenue Service for the 2016 through 2021 tax years. It is reasonably possible that certain income tax return proceedings will be completed during the next 12 months and could result in a change in our balance of unrecognized tax benefits. However, we believe we have recorded adequate amounts of tax, including interest and penalties, for any adjustments expected to occur.

-During 272021, we filed suit in U.S. District Court for the Western District of Tennessee challenging the validity of a tax regulation related to the one-time transition tax on unrepatriated foreign earnings, which was enacted as part of the Tax Cuts and Jobs Act (“TCJA”). Our lawsuit sought to have the court declare this regulation invalid and order the refund of overpayments of U.S. federal income taxes for 2018 and 2019 attributable to the denial of foreign tax credits under the regulation. We have recorded a cumulative benefit of $249 million attributable to our interpretation of the TCJA and the Internal Revenue Code. In March 2023, the District Court ruled that the regulation is invalid and contradicts the plain terms of the tax code. On February 13, 2025, the District Court ruled again in our favor with regard to a new argument raised by the U.S. government. On June 4, 2025, the District Court validated the amount of refunds owed for 2018 and 2019, which includes the foreign tax credits previously denied. On August 1, 2025, the U.S. government filed a notice to appeal the decision to the U.S. Court of Appeals for the Sixth Circuit. If we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit previously recorded.

During 2021, we filed suit in U.S. District Court for the Western District of Tennessee challenging the validity of a tax regulation related to the one-time transition tax on foreign earnings not repatriated, which was enacted as part of the Tax Cuts and Jobs Act (“TCJA”). Our lawsuit seeks to have the court declare this regulation invalid and order the refund of overpayments of U.S. federal income taxes for 2018 and 2019 attributable to the denial of foreign tax credits under the regulation. We have recorded a cumulative benefit of $226 million attributable to our interpretation of the TCJA and the Internal Revenue Code. In March 2023, the District Court ruled that the regulation is invalid and contradicts the plain terms of the tax code. On February 13, 2025, the District Court ruled again in our favor with regard to a new argument raised by the U.S. government. We continue to work towards obtaining a final judgment for the applicable refund amounts due to the regulation being invalid. Once the District Court enters a final judgment, the U.S. government could file an appeal with the U.S. Court of Appeals for the Sixth Circuit. If we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit previously recorded.

Outlook

InThe ~~the~~uncertainty ~~remainder~~over ofthe ~~2025,~~current wetrade ~~expect~~and ~~revenue~~geopolitical toenvironment ~~continue~~and tothe beimpact ~~pressured~~it bymay ~~macroeconomic~~continue ~~conditions, including uncertainty related~~ to ~~international~~have ~~trade,~~on ~~negatively affecting~~ customer demand and ~~constraining~~shipping ~~yield~~patterns ~~growth.~~globally Wemakes ~~anticipate~~expectations afor ~~continued~~our ~~mix~~2026 ~~shift~~operating toand ~~deferred~~financial ~~services~~performance ~~offerings~~inherently toless ~~negatively affect results~~clear. WeHowever, ~~will~~based ~~continue to execute~~ on ~~our~~the ~~DRIVE~~current ~~program initiatives focused on reducing our permanent cost structure~~trends, ~~aligning~~we ~~our~~expect ~~cost base with demand, and increasing~~ the ~~flexibility~~industrial ofeconomy ~~our~~to ~~network. We will also~~ continue topressuring ~~execute~~demand onfor our ~~revenue~~higher-yielding ~~quality strategy and pursue profitable revenue growth opportunities~~ business-to-business ~~mitigate~~services in the ~~impact~~near ofterm, ~~the~~and service mix ~~shift~~to oncontinue ~~our~~shifting ~~yield~~further astoward ~~well~~deferred asservice ~~base yield pressures through surcharge management and optimizing our customer mix~~offerings. We also expect the ~~benefits~~global ~~from~~trade ~~DRIVE~~environment ~~and revenue quality initiatives~~ to becontinue ~~partially~~pressuring ~~offset~~demand byfor ~~expense~~our ~~headwinds related to higher global inflation~~services, ~~the~~both ~~unfavorable~~internationally ~~effect~~and ~~of the expiration~~ in ~~September 2024 of~~ the ~~contract for Federal Express to provide the USPS~~ U.S. ~~domestic transportation services, and one fewer operating day in the fourth quarter.~~

~~See~~To ~~the~~mitigate ~~“Business~~demand ~~Optimization~~challenges, ~~Costs”~~we ~~section~~will continue to execute on our revenue quality strategy through surcharge management and optimizing our customer and service mix and alignment of ~~this~~our ~~MD&A~~cost ~~for~~base ~~additional~~with ~~information~~demand. onWe will also continue our ~~DRIVE~~focus ~~program~~on business optimization, ~~workforce~~where ~~reduction~~we ~~plan~~expect to see an incremental $1.0 billion in ~~Europe,~~structural cost reduction benefits from DRIVE and ~~other~~Network ~~cost~~2.0 ~~savings~~in ~~initiatives~~2026.

~~Our~~See ~~capital~~the ~~expenditures~~“Business ~~for~~Optimization ~~2025~~Costs” ~~are~~section ~~expected~~of tothis beMD&A ~~approximately~~for ~~$4.9~~additional ~~billion,~~information ~~$0.3~~on ~~billion~~our ~~lower~~transformation ~~than 2024~~initiatives, asincluding ~~we continue to reduce~~ our ~~capital~~Network ~~intensity relative to revenue~~2.0 ~~Aircraft~~program ~~spend~~and isworkforce ~~expected~~reduction toplan ~~decline, partially offset by increased investments~~ in ~~network optimization and modernization of our facilities~~Europe.

WeOur ~~will~~capital ~~continue~~expenditures tofor ~~evaluate~~2026 ~~our~~are ~~investments~~expected into ~~critical~~be ~~long-term~~approximately ~~strategic~~$4.5 ~~projects~~billion, to$0.4 billion ~~ensure~~higher ~~our~~than ~~capital~~2025. ~~expenditures~~The ~~are~~increase ~~expected~~is todriven ~~generate~~by ~~high returns on~~ investment ~~and~~in ~~are~~Network ~~balanced~~2.0 ~~with~~initiatives ~~our~~and ~~outlook~~other ~~for~~efforts ~~global~~to ~~economic~~modernize ~~conditions.~~our ~~For~~facilities ~~additional~~and ~~details~~package onhandling ~~key~~equipment ~~2025~~in ~~capital~~the ~~projects,~~U.S. ~~refer~~and tointernational ~~the~~locations. ~~“Financial~~Aircraft ~~Condition~~spend –is ~~Capital~~expected ~~Resources”~~to ~~and~~decline ~~“Financial~~to ~~Condition~~approximately –$1.0 ~~Liquidity~~billion, ~~Outlook”~~$0.3 ~~sections~~billion oflower ~~this~~than ~~MD&A~~2025.

~~The~~We ~~uncertainty~~will ofcontinue ato ~~slowdown~~evaluate our investments in ~~the~~critical ~~global~~long-term ~~economy,~~strategic ~~global~~projects ~~inflation,~~to ~~geopolitical~~ensure ~~challenges,~~our ~~developments~~capital inexpenditures ~~international~~are ~~trade,~~expected ~~and~~to ~~the~~generate ~~effects~~high ~~these~~returns ~~factors~~on ~~will~~investment ~~have~~and onare ~~the~~balanced ~~rate~~with ofour ~~growth~~outlook offor global ~~trade,~~economic ~~supply~~conditions. ~~chains,~~For ~~fuel~~additional ~~prices,~~details ~~and~~on ~~our~~key ~~business~~2026 incapital ~~particular~~projects, ~~make~~refer ~~any~~to ~~expectations for~~ the ~~remainder~~“Financial ofCondition ~~2025~~– ~~inherently~~Capital ~~less~~Resources” ~~certain.~~and ~~See~~ “~~Item~~Financial ~~1A.~~Condition ~~Risk~~– ~~Factors~~Liquidity Outlook” ~~for~~sections ~~more~~of ~~information~~this MD&A.

In December 2024, we announced that FedEx’s management and Board of Directors had decided to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company. The separation is expected to be executed by June 2026.

The uncertainty of a slowdown in the global economy, global inflation, geopolitical challenges, developments in international trade, and the effects these factors will have on the rate of growth of global trade, supply chains, fuel prices, and our business in particular, make any expectations for the remainder of 2026 inherently less certain. See Part I “Item 1A. Risk Factors” in our Annual Report for more information.

See the “Trends Affecting Our Business,” “Critical Accounting Estimates,” and “Forward-Looking Statements” sections of this MD&A for additional information.

RECENT ACCOUNTING GUIDANCE

See Note 1 of the accompanying unaudited condensed consolidated financial statements for a discussion of recent accounting guidance.

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Table of Contents

REPORTABLE SEGMENTS

Federal Express and FedEx Freight represent our major service lines and constitute our reportable segments. Our reportable segments include the following businesses:

- 28 -

of these services to reflect the full cost of operating our businesses in the results of those segments. We review and evaluate the performance of FedEx Freight and our other operating segments based on operating income inclusive of these allocations.

CORPORATE, OTHER, AND ELIMINATIONS

Also included in Corporate and other are the FedEx Office and Print Services, Inc. (“FedEx Office”) operating segment, which provides an array of document and business services and retail access to our customers for our package transportation businesses, and the FedEx Logistics operating segment, which provides integrated supply chain management solutions, specialty transportation, customs brokerage, and global ocean and air freight forwarding.

The results of Corporate, other, and eliminations are not allocated to the other business segments.

Operating results in Corporate, other, and eliminations ~~improved~~were flat in the ~~third~~first quarter ~~and~~of ~~declined~~2026 inprimarily ~~the~~due ~~nine~~to ~~months~~decreased ofpurchased ~~2025.~~transportation ~~Increased business optimization~~ costs ~~and outside service contracts expense~~ at FedEx ~~Dataworks~~Logistics, ~~were partially~~ offset by ~~lower~~higher ~~salaries~~professional ~~and~~fees ~~employee benefits expense~~ at ~~FedEx~~corporate ~~Office~~headquarters ~~in both the third quarter~~ and ~~nine months of 2025.~~ FedEx ~~Logistics~~Dataworks ~~results also improved~~ in the ~~third~~first quarter of ~~2025 primarily due to higher revenue and lower salaries and employee benefits expense and other operating expense, which were partially offset by higher purchased transportation expense~~2026.

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment in order to optimize our resources. For example, during the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026 FedEx Freight provided road and intermodal support for Federal Express. In addition, Federal Express works with FedEx Logistics to secure air charters and other cargo space for U.S. customers. Billings for such services are based on negotiated rates and are reflected as revenue of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenue and expenses are eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are not material.

- 29 30-

Table of Contents

FEDERAL EXPRESS SEGMENT

Federal Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight including priority, deferred, and economy services, which provide delivery on a time-definite or day-definite basis. The following table compares revenue, operating expenses, operating income (dollars in millions), operating margin, and operating expenses as a percent of revenue for the periods ended ~~February 28~~August 31, 2025 and ~~February 29,~~ 2024:

	~~Three Months Ended~~			Three Months Ended			~~Percent~~				~~Nine Months Ended~~			Percent			~~Percent~~
	~~2025~~			~~2024~~2025			~~Change~~		2024		~~2025~~			~~2024~~Change			~~Change~~
Revenue:
Package:
U.S. priority	$	~~2,646~~		$	2,~~595~~767			2	$	2,591	$	~~7,800~~		$7	~~7,873~~			(1	)
U.S. deferred		~~1,386~~		1,273	~~1,316~~			5	1,151			~~3,736~~		11	~~3,710~~			1
U.S. ground		~~8,986~~		8,654	~~8,363~~			7	8,056			~~25,298~~		7	~~24,805~~			2
Total U.S. domestic package revenue		~~13,018~~		12,694	~~12,274~~			6	11,798			~~36,834~~		8	~~36,388~~			1
International priority		~~2,097~~		2,258	~~2,317~~			(9	)2,206			~~6,534~~		2	~~7,034~~			(7	)
International economy		~~1,465~~		1,354	~~1,107~~			32	1,360			~~4,413~~		—	~~3,407~~			30
Total international export package revenue		~~3,562~~		3,612	~~3,424~~			4	3,566			~~10,947~~		1	~~10,441~~			5
International domestic(1)		~~1,078~~		1,135	~~1,139~~			(5	)1,112			~~3,380~~		2	~~3,492~~			(3	)
Total package revenue		~~17,658~~		17,441	~~16,837~~			5	16,476			~~51,161~~		6	~~50,321~~			2
Freight:
U.S.		~~286~~		303	~~641~~			~~(55~~	)569			~~1,238~~		(47)	~~1,795~~			~~(31~~	)
International priority		~~551~~		595	~~520~~			6	526			~~1,717~~		13	~~1,641~~			5
International economy		~~470~~		528	~~438~~			7	463			~~1,462~~		14	~~1,380~~			6
Total freight revenue		~~1,307~~		1,426	~~1,599~~			~~(18~~	)1,558			~~4,417~~		(8)	~~4,816~~			(8	)
Other		~~216~~		249	~~236~~			(8	)271			~~749~~		(8)	~~734~~			2
Total revenue		~~19,181~~		19,116	~~18,672~~			3	18,305			~~56,327~~		4	~~55,871~~			1
Operating expenses:
Salaries and employee benefits		~~6,390~~		6,516	~~6,141~~			4	6,201			~~18,920~~		5	~~18,520~~			2
Purchased transportation		~~5,196~~		5,073	~~4,954~~			5	4,801			~~15,064~~		6	~~14,611~~			3
Rentals and landing fees		~~1,002~~		1,013	~~968~~			4	986			~~2,975~~		3	~~2,906~~			2
Depreciation and amortization		~~926~~		954	~~933~~			(1	)935			~~2,779~~		2	~~2,787~~			—
Fuel		~~777~~		760	~~1,005~~			~~(23~~	)954			~~2,566~~		(20)	~~3,130~~			~~(18~~	)
Maintenance and repairs		~~672~~		737	~~697~~			(4	)719			~~2,106~~		3	~~2,151~~			(2	)
Business optimization costs		92			45			104				341			149			129
Separation and other costs				5					—					NM
Intercompany allocations		(199	)		(167	)		19				(591	)		(510	)		16
Business optimization costs				21					43					(51)
Other		3,031			2,923			4				8,868			8,613			3
Intercompany allocations				(233)					(187)					25
Total operating expenses		17,887			17,499			2				53,028			52,357			1
Other				3,132					2,900					8
Operating income	$	1,294		$	1,173			10			$	3,299		$	3,514			(6	)
Total operating expenses				17,978					17,352					4
Operating margin		6.7	%		6.3	%		40		bp		5.9	%		6.3	%		(40	)	bp
Operating income				$	1,138				$	953				19
Operating margin				6.0		%			5.2		%			80		bp

(1)International domestic revenue relates to our international intra-country operations.

- 30 31-

	Percent of Revenue
	Three Months Ended								Nine Months Ended
	2025				2024				2025				2024
Operating expenses:
Salaries and employee benefits		33.3		%		32.9		%		33.6		%		33.1		%
Purchased transportation		27.1				26.5				26.7				26.2
Rentals and landing fees		5.2				5.2				5.3				5.2
Depreciation and amortization		4.8				5.0				4.9				5.0
Fuel		4.1				5.4				4.6				5.6
Maintenance and repairs		3.5				3.7				3.7				3.8
Business optimization costs		0.5				0.2				0.6				0.3
Intercompany allocations		(1.0	)			(0.9	)			(1.0	)			(0.9	)
Other		15.8				15.7				15.7				15.4
Total operating expenses		93.3				93.7				94.1				93.7
Operating margin		6.7		%		6.3		%		5.9		%		6.3		%

Table of Contents

- 31 -


		Percent of Revenue
	Three Months Ended
		2025		2024
Operating expenses:
Salaries and employee benefits		34.1	%	33.9	%
Purchased transportation		26.4		26.2
Rentals and landing fees		5.3		5.4
Depreciation and amortization		5.0		5.1
Fuel		4.0		5.2
Maintenance and repairs		3.9		3.9
Separation and other costs		—		—
Business optimization costs		0.1		0.2
Intercompany allocations		(1.2)		(1.0)
Other		16.4		15.9
Total operating expenses		94.0		94.8
Operating margin		6.0	%	5.2	%

Prior year statistical information has been revised to conform to the current year presentation. The following table compares selected statistics (in thousands, except yield amounts) for the periods ended February 28, 2025 and February 29, 2024:-32-

	Three Months Ended				Percent			Nine Months Ended				Percent
	2025		2024		Change			2025		2024		Change
Package Statistics
Average daily package volume (ADV)(1):
U.S. priority		1,588		1,634		(3	)		1,597		1,664		(4	)
U.S. deferred		1,162		1,104		5			1,048		1,027		2
U.S. ground commercial		4,181		4,189		—			4,260		4,289		(1	)
U.S. ground home delivery/economy		7,887		7,090		11			7,092		6,826		4
Total U.S. domestic ADV		14,818		14,017		6			13,997		13,806		1
International priority		558		663		(16	)		592		665		(11	)
International economy		583		393		48			552		388		42
Total international export ADV		1,141		1,056		8			1,144		1,053		9
International domestic(2)		1,908		1,883		1			1,930		1,954		(1	)
Total ADV		17,867		16,956		5			17,071		16,813		2
Revenue per package (yield):
U.S. priority	$	26.44	$	25.20		5		$	25.70		24.78		4
U.S. deferred		18.94		18.93		—			18.77		18.91		(1	)
U.S. ground		11.82		11.77		—			11.73		11.68		—
U.S. domestic composite		13.95		13.90		—			13.85		13.80		—
International priority		59.65		55.48		8			58.11		55.40		5
International economy		39.92		44.71		(11	)		42.03		46.00		(9	)
International export composite		49.57		51.47		(4	)		50.35		51.94		(3	)
International domestic(2)		8.96		9.59		(7	)		9.22		9.35		(1	)
Composite package yield		15.69		15.76		—			15.77		15.67		1
Freight Statistics
Average daily freight pounds:
U.S.		2,201		6,067		(64	)		3,440		5,674		(39	)
International priority		4,485		4,353		3			4,625		4,405		5
International economy		10,990		11,072		(1	)		11,387		11,307		1
Total average daily freight pounds		17,676		21,492		(18	)		19,452		21,386		(9	)
Revenue per pound (yield):
U.S.	$	2.06	$	1.68		23		$	1.89	$	1.66		14
International priority		1.95		1.90		3			1.95		1.95		—
International economy		0.68		0.63		8			0.68		0.64		6
Composite freight yield		1.17		1.18		(1	)		1.20		1.18		2

Table of Contents

~~ADV~~The isfollowing ~~calculated~~table oncompares aselected ~~5-day-per-week~~statistics ~~basis.~~(in thousands, except yield amounts) for the periods ended August 31, 2025 and 2024:

International domestic statistics relate to our international intra-country operations.


	Three Months Ended			Percent
		2025		2024		Change
Package Statistics
Average daily package volume (ADV)(1):
U.S. priority		1,654		1,600		3
U.S. deferred		1,061		968		10
U.S. ground commercial		4,290		4,289		—
U.S. ground home delivery/economy		6,915		6,438		7
Total U.S. domestic ADV		13,920		13,295		5

International priority		562		622		(10)
International economy		518		491		5
Total international export ADV		1,080		1,113		(3)
International domestic(2)		1,806		1,823		(1)

Total ADV		16,806		16,231		4

Revenue per package (yield):
U.S. priority		$	26.13	$	25.30	3
U.S. deferred		18.76		18.59		1
U.S. ground		12.07		11.73		3
U.S. domestic composite		14.25		13.87		3

International priority		62.77		55.37		13
International economy		40.87		43.33		(6)
International export composite		52.27		50.06		4
International domestic(2)		9.81		9.53		3

Composite package yield		16.22		15.86		2

Freight Statistics
Average daily freight pounds:
U.S.		2,165		5,319		(59)
International priority		4,647		4,465		4
International economy		11,222		10,706		5
Total average daily freight pounds		18,034		20,490		(12)

Revenue per pound (yield):
U.S.		$	2.18	$	1.67	31
International priority		2.00		1.84		9
International economy		0.74		0.68		9
Composite freight yield		1.24		1.19		4

-(1)ADV 32is calculated on a 5-day-per-week basis.

(2)International domestic statistics relate to our international intra-country operations.

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Table of Contents

Federal Express Segment Revenue

Yield:

U.S. domestic composite package yield increased slightly in both the third quarter and nine months of 2025 primarily due to higher base rates from our continued focus on revenue quality. U.S. freight yield increased 23% in the third quarter and 14% in the nine months of 2025 primarily due to the expiration of our contract with the USPS on September 29, 2024. International export composite package yield decreased 4% in the third quarter and 3% in the nine months of 2025 primarily due to unfavorable service mix. Package and freight yields were also negatively affected by reduced demand surcharges in the nine months of 2025.

Volume:

~~International~~U.S. ~~economy~~domestic package volume increased 485% ~~in the third quarter and 42% in the nine months of 2025~~ primarily due to ~~continued~~strong ~~growth~~demand infor our ~~deferred service offerings as a result of strengthening e-commerce.~~ U.S. ~~ground home delivery/~~economy package ~~volume~~services. ~~increased~~Growth ~~11%~~ in ~~the~~our ~~third~~international ~~quarter~~economy ~~and~~package 4volume of 5% in the ~~nine~~first ~~months~~quarter of ~~2025~~2026 ~~primarily~~was ~~due~~more tothan ~~increased~~offset ~~demand~~by ~~for~~a ~~our~~10% ~~services~~decline ~~and,~~ in ~~the~~international ~~third quarter of 2025, the timing of cyber week. International~~ priority package volume ~~decreased~~reflecting ~~16% in~~ the ~~third~~negative ~~quarter~~impact ~~and 11% in the nine months~~ of ~~2025 driven by softness in the~~ global ~~industrial~~trade ~~economy~~policies. U.S. average daily freight pounds decreased 6459% in the ~~third~~first quarter ~~and 39% in the nine months~~ of ~~2025~~2026 primarily due to the expiration of our contract with the USPS ~~on September 29, 2024~~. ~~U.S. priority package volume decreased 3% in the third quarter and 4% in the nine months of 2025 primarily due to economic softness and lower consumer spending.~~

Yield

U.S. domestic composite package yield increased 3% in the first quarter of 2026 primarily due to improved base yields, partially offset by decreased fuel surcharges. International priority package yield increased by 13% due to increased base yields and favorable exchange rates, partially offset by decreased fuel surcharges. International economy package yields decreased 6% due to decreased base yields, partially offset by favorable exchange rates.

Federal Express Segment Operating Income

Federal Express segment operating income increased 1019% in the ~~third~~first quarter of ~~2025~~2026 due to higher ~~base~~U.S. ~~yields~~domestic and ~~volume,~~international ~~partially~~priority ~~offset~~package byyields, ~~increased~~structural ~~operating~~cost ~~expenses.~~reductions ~~Federal~~from ~~Express~~business ~~segment~~optimization ~~operating~~initiatives, ~~income~~including ~~decreased~~from 6%DRIVE ininitiatives ~~the~~commenced ~~nine~~in ~~months~~prior ofyears, ~~2025~~and ~~due~~higher toU.S. ~~increased~~domestic ~~operating~~package ~~expenses~~demand, ~~and~~partially ~~one~~offset ~~fewer~~by increased operating ~~day,~~expenses ~~partially~~and ~~offset~~the byexpiration ~~higher~~of ~~base~~our ~~yields~~contract ~~and~~with ~~volume~~the USPS. The increase in operating expenses in the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026 was primarily driven by ~~increased~~higher wage and purchased transportation rates, ~~business optimization costs,~~ and ~~increased~~higher ~~employee~~credit ~~benefits, partially offset by lower fuel prices and continued benefits from DRIVE initiatives that drove a reduction in our permanent cost structure~~losses. These initiatives included the continued transformation of our structural network, improving the efficiency of our information technology and back-office functions, optimizing operations in Europe, and increasing linehaul efficiencies. Currency exchange rates had a negative effect on revenue and a positive effect on expenses and operating income in the third quarter and nine months of 2025.

~~Purchased~~Salaries ~~transportation~~and employee benefits expense increased 5% in the ~~third~~first quarter ~~and 3% in the nine months~~ of ~~2025~~2026 primarily due to higher wage rates, asunfavorable ~~well~~exchange asrates, anincreased ~~increase in commercial linehaul to support international economy~~ volume ~~growth and network changes~~, ~~partially offset by savings from our DRIVE initiatives~~ and ~~lower~~higher ~~fuel~~employee ~~prices~~benefits. Purchased transportation ~~also increased in the third quarter of 2025 due to higher U.S. ground volume. Salaries and employee benefits~~ expense increased 46% in the ~~third~~first quarter ~~and 2% in the nine months~~ of ~~2025~~2026 primarily due to anhigher ~~increase in wage~~ rates, increased ~~staffing to align with peak demand~~volume, and anunfavorable ~~increase~~exchange ~~in retirement benefits due to changes to our defined contribution plan which increased the number of eligible employees~~rates, partially offset by ~~savings~~increased ~~from our DRIVE initiatives~~efficiency. ~~In addition, variable incentive compensation was higher in the third quarter and lower in the nine months of 2025.~~ Other operating expense increased 48% in the ~~third~~first quarter ~~and 3% in the nine months~~ of ~~2025~~2026 primarily due to higher credit losses and self-insurance accruals. Fuel expense decreased 2320% in the ~~third~~first quarter ~~and 18% in the nine months~~ of ~~2025~~2026 due to ~~decreases~~lower in fuel prices and ~~usage~~the ~~resulting~~expiration ~~from~~of ~~lower~~the ~~flight~~USPS ~~hours~~contract.

Federal Express segment results include business optimization costs of $9221 million and $43 million in the ~~third~~first quarter of 2026 and ~~$341~~2025, ~~million~~respectively. inIn the ~~nine~~first ~~months~~quarter of ~~2025.~~2026, Federal Express segment results include ~~business~~$4 ~~optimization~~million of costs ofassociated ~~$45~~with ~~million~~our inplanned ~~the~~fiscal ~~third~~year ~~quarter~~change and $~~149~~1 million inof costs associated with the ~~nine~~planned ~~months~~spin-off of ~~2024~~FedEx Freight. Federal Express did not incur costs related to the fiscal year change or FedEx Freight spin-off in 2025. See the “Business Optimization Costs” ~~section~~and “Separation and Other Costs” sections of this MD&A for more information.

In July 2023, Federal Express’s pilots failed to ratify the tentative successor agreement that was approved by the Air Line Pilots Association, International’s FedEx Master Executive Council in the prior month. ~~The~~Negotiations have continued, and the ongoing bargaining process has no effect on our operations. See Note 1 of the accompanying unaudited condensed consolidated financial statements for additional information.

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Table of Contents

FEDEX FREIGHT SEGMENT

FedEx Freight LTL service offerings include priority services when speed is critical and economy services when time can be traded for savings. The following table compares revenue, operating expenses, operating income (dollars in millions), operating margin, selected statistics, and operating expenses as a percent of revenue for the periods ended ~~February 28~~August 31, 2025 and ~~February 29,~~ 2024:

	~~Three Months Ended~~			Three Months Ended			~~Percent~~				~~Nine Months Ended~~			Percent			~~Percent~~
	~~2025~~			~~2024~~2025			~~Change~~		2024		~~2025~~			~~2024~~Change			~~Change~~
Revenue	$	~~2,089~~		$	2,~~205~~257			(5	)$	2,329	$	~~6,595~~		$(3)	~~7,042~~			(6	)
Operating expenses:
Salaries and employee benefits		~~939~~		975	~~959~~			(2	)984			~~2,899~~		(1)	~~2,962~~			(2	)
Purchased transportation		~~202~~		201	~~218~~			(7	)203			~~602~~		(1)	~~668~~			~~(10~~	)
Rentals		72		74	70			3	71			~~215~~		4	~~209~~			3
Depreciation and amortization		~~113~~		110	~~108~~			5	110			~~335~~		—	~~297~~			13
Fuel		~~112~~		113	~~134~~			~~(16~~	)121			~~344~~		(7)	~~437~~			~~(21~~	)
Maintenance and repairs		85		81	78			9	82			~~255~~		(1)	~~247~~			3
Intercompany charges		142			132			8				433			405			7
Separation and other costs				9					—					NM
Other		163			165			(1	)			500			503			(1	)
Intercompany charges				162					148					9
Total operating expenses		1,828			1,864			(2	)			5,583			5,728			(3	)
Other				172					171					1
Operating income	$	261		$	341			(23	)		$	1,012		$	1,314			(23	)
Total operating expenses				1,897					1,890					—
Operating margin		12.5	%		15.5	%		(300	)	bp		15.3	%		18.7	%		(340	)	bp
Operating income				$	360				$	439				(18)
Average daily shipments (in thousands):
Operating margin				16.0		%			18.8		%			(280)		bp
Priority		58.2			61.5			(5	)			61.2			65.4			(6	)
Average daily shipments (in thousands):
Economy		26.9			27.7			(3	)			28.2			28.9			(2	)
Priority				62.0					62.9					(1)
Total average daily shipments		85.1			89.2			(5	)			89.4			94.3			(5	)
Economy				28.0					29.1					(4)
Weight per shipment (lbs):
Total average daily shipments				90.0					92.0					(2)
Priority		935			974			(4	)			943			979			(4	)
Weight per shipment (lbs):
Economy		877			885			(1	)			870			880			(1	)
Priority				933					956					(2)
Composite weight per shipment		917			946			(3	)			920			949			(3	)
Economy				907					868					4
Revenue per shipment:
Composite weight per shipment				925					928					—
Priority	$	360.68		$	363.21			(1	)		$	359.19		$	360.47			—
Revenue per shipment:
Economy		408.56			414.79			(2	)			405.72			412.84			(2	)
Priority				$	359.54				$	363.97				(1)
Composite revenue per shipment	$	375.81		$	379.26			(1	)		$	373.85		$	376.53			(1	)
Economy				408.05					408.60					—
Revenue per hundredweight:
Composite revenue per shipment				$	374.62				$	378.09				(1)
Priority	$	38.57		$	37.31			3			$	38.11		$	36.80			4
Revenue per hundredweight:
Economy		46.59			46.89			(1	)			46.66			46.92			(1	)
Priority				$	38.54				$	38.06				1
Composite revenue per hundredweight	$	41.00		$	40.10			2			$	40.66		$	39.68			2
Economy				44.98					47.09					(4)
Composite revenue per hundredweight				$	40.50				$	40.73				(1)

	Percent of Revenue
	Three Months Ended						Nine Months Ended
	2025			2024			2025			2024
Operating expenses:
Salaries and employee benefits		44.9	%		43.5	%		43.9	%		42.1	%
Purchased transportation		9.7			9.9			9.1			9.5
Rentals		3.4			3.1			3.3			3.0
Depreciation and amortization		5.4			4.9			5.1			4.2
Fuel		5.4			6.1			5.2			6.2
Maintenance and repairs		4.1			3.5			3.9			3.5
Intercompany charges		6.8			6.0			6.6			5.7
Other		7.8			7.5			7.6			7.1
Total operating expenses		87.5			84.5			84.7			81.3
Operating margin		12.5	%		15.5	%		15.3	%		18.7	%

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Table of Contents


	Percent of Revenue
	Three Months Ended
	2025		2024
Operating expenses:
Salaries and employee benefits	43.2	%	42.3	%
Purchased transportation	8.9		8.7
Rentals	3.3		3.1
Depreciation and amortization	4.9		4.7
Fuel	5.0		5.2
Maintenance and repairs	3.5		3.5
Separation and other costs	0.4		—
Intercompany charges	7.2		6.4
Other	7.6		7.3
Total operating expenses	84.0		81.2
Operating margin	16.0	%	18.8	%

FedEx Freight Segment Revenue

FedEx Freight segment revenue decreased 53% in the ~~third~~first quarter ~~and 6% in the nine months~~ of ~~2025~~2026 primarily due to lower ~~shipments~~volume and ~~yields.~~lower ~~Revenue~~base ~~was also negatively affected by one fewer operating day in the nine months of 2025~~yields.

-Average 34daily -shipments decreased 2% in the first quarter of 2026 due to reduced demand for our services, primarily resulting from macroeconomic conditions. Revenue per shipment decreased 1% in the first quarter of 2026 primarily due to lower base yields, including weight per shipment, and fuel surcharges.

Average daily shipments decreased 5% in both the third quarter and nine months of 2025 due to reduced demand for our services, primarily resulting from macroeconomic conditions. Revenue per shipment decreased 1% in both the third quarter and nine months of 2025 primarily due to lower fuel surcharges and weight per shipment, partially offset by base yield improvement resulting from our continued focus on revenue quality.

FedEx Freight Segment Operating Income

FedEx Freight segment operating income decreased 2318% in ~~both~~ the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026 primarily due to ~~lower~~the ~~revenue,~~decline ~~partially~~in ~~offset~~revenue byand ~~reduced~~increase ~~operating expenses. Operating income was also negatively affected by one fewer operating day~~ in ~~the~~intercompany ~~nine~~charges ~~months~~and ofwage ~~2025~~rates.

~~Combined~~Intercompany ~~fuel~~charges ~~and~~increased ~~purchased transportation expense decreased 11~~9% in the ~~third~~first quarter ~~and~~of ~~14%~~2026 inprimarily ~~the~~due ~~nine~~to ~~months~~increased ofsales ~~2025~~staffing ~~due~~ to ~~decreased~~prepare ~~shipments~~for ~~and~~the ~~lower~~planned ~~fuel~~spin-off ~~prices.~~of ~~Salaries~~FedEx ~~and~~Freight. ~~employee~~Fuel ~~benefits~~ expense decreased 27% in ~~both~~ the ~~third~~first quarter ~~and nine months~~ of ~~2025~~2026 ~~primarily~~ due to ~~reduced~~fewer ~~staffing~~shipments toand ~~align~~a ~~with~~decrease ~~lower~~in ~~volumes,~~fuel ~~partially~~price. ~~offset~~Salaries byand ~~higher~~employee ~~wage~~benefits ~~rates. Depreciation~~ expense ~~increased~~decreased 131% in the ~~nine~~first ~~months~~quarter of ~~2025~~2026 primarily due to alower ~~gain~~volume, onpartially ~~the~~offset ~~sale~~by ofhigher ~~facilities~~wage ~~in the second quarter of 2024 and investments in information technology and transportation equipment~~rates.

FedEx Freight segment results include costs associated with our planned spin-off of FedEx Freight of $9 million in the first quarter of 2026. FedEx Freight did not incur costs related to the FedEx Freight spin-off in 2025. See the “Separation and Other Costs” section of this MD&A for more information.

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Table of Contents

FINANCIAL CONDITION

LIQUIDITY

Cash and cash equivalents totaled $56.12 billion at ~~February 28~~August 31, 2025, compared to $65.5 billion at May 31, ~~2024~~2025. The following table provides a summary of our cash flows for the ~~nine~~three-month periods ended ~~February 28~~August 31, 2025 and ~~February 29,~~ 2024 (in millions):

	~~2025~~			~~2024~~2025			2024
Operating activities:
Net income	$	~~2,444~~		$	~~2,857~~824		$	794
Business optimization costs, net of payments		~~114~~		(110)	~~(50~~	)	(69)
Other noncash charges and credits		~~6,058~~		2,112	~~5,777~~		2,072
Changes in assets and liabilities		~~(4,099~~	)	(1,110)	~~(2,970~~	)	(1,610)
Cash provided by operating activities		~~4,517~~		1,716	~~5,614~~		1,187
Investing activities:
Capital expenditures		~~(2,582~~	)	(623)	~~(3,974~~	)	(767)
Purchase of investments		~~(197~~	)	(34)	~~(110~~	)	(61)
Proceeds from sale of investments		77		30	24		13
Proceeds from asset dispositions and other		42			94
Proceeds from asset dispositions, and other investing activities, net				8			13
Cash used in investing activities		~~(2,660~~	)	(619)	~~(3,966~~	)	(802)
Financing activities:
Principal payments on debt		(89	)		(143	)
Proceeds from debt issuances				997			—
Proceeds from stock issuances		472			265
Principal payments on debt				(625)			(34)
Dividends paid		(1,008	)		(949	)
Proceeds from stock issuances				18			404
Purchases of common stock		(2,517	)		(2,000	)
Dividends paid				(345)			(339)
Other		(30	)		(7	)
Purchases of common stock				(500)			(1,000)
Cash used in financing activities		(3,172	)		(2,834	)
Other				(5)			—
Effect of exchange rate changes on cash		(51	)		(26	)
Cash used in financing activities				(460)			(969)
Net decrease in cash and cash equivalents	$	(1,366	)	$	(1,212	)
Effect of exchange rate changes on cash				27			26
Cash and cash equivalents at the end of period	$	5,135		$	5,644
Net increase (decrease) in cash and cash equivalents				664			(558)
Cash and cash equivalents at the end of period				$	6,166		$	5,943

Cash Provided by Operating Activities. Cash flows from operating activities ~~decreased~~increased $10.15 billion in the ~~nine~~first ~~months~~quarter of ~~2025~~2026 primarily due to working capital changes driven by aan ~~decrease~~increase in accrued ~~incentive~~income ~~compensation~~taxes, ~~and~~professional ~~other~~fees, ~~liabilities~~variable ~~and~~incentive ~~an increase in accounts receivable~~compensation, ~~partially~~and ~~offset by an increase in accounts payable from the nine months of 2024~~self-insurance.

Cash Used in Investing Activities. Capital expenditures decreased during the ~~nine~~first ~~months~~quarter of ~~2025~~2026 primarily due to decreased spending on aircraft and related equipment, ~~facilities~~vehicles and ~~other~~trailers, and ~~vehicles~~information and ~~trailers~~technology investments. See “Capital Resources” for a discussion of capital expenditures during ~~2025~~2026.

Cash Used in Financing Activities. WeCash ~~repurchased~~used anin ~~aggregate~~financing activities decreased $0.5 billion in the first quarter of 2026 primarily due to the repurchase of $~~497~~500 million of our common stock through open market transactions during the ~~third~~first quarter of ~~2025.~~2026, ~~During~~a decrease of $500 million compared to the ~~nine~~first ~~months~~quarter of 2025. Additionally, we ~~repurchased~~issued ~~8.9~~ €850 million ~~shares~~ of ~~FedEx~~senior ~~common~~unsecured ~~stock~~debt ~~through~~in ~~ASR~~July 2025 and ~~open~~used ~~market~~a ~~transactions~~portion atof anthe ~~average~~net ~~price~~proceeds ofto ~~$281.74~~repay ~~per~~the ~~share~~€500 million ~~for~~aggregate aprincipal ~~total~~amount outstanding of $2our 0.545% ~~billion~~notes at maturity in August 2025. See Note 1 and Note 4 of the accompanying unaudited condensed consolidated financial statements, “Liquidity Outlook” below, and Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” for additional information.

- 35 -

unaudited condensed consolidated financial statements, “Liquidity Outlook” below, and Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” for additional information.

CAPITAL RESOURCES

Our operations are capital intensive, characterized by significant investments in aircraft, package handling and sort equipment, technology, vehicles and trailers, and facilities. The amount and timing of capital investments depend on various factors, including pre-existing contractual commitments, anticipated volume growth, domestic and international economic conditions, new or enhanced services, geographical expansion of services, availability of satisfactory financing, and actions of regulatory authorities.

~~The following table compares capital expenditures by asset category and reportable segment for the periods ended February 28, 2025 and February 29, 2024 (in millions):~~-37-

	Three Months Ended				Nine Months Ended				Percent Change
	2025		2024		2025		2024		Three Months Ended			Nine Months Ended
Aircraft and related equipment	$	367	$	329	$	630	$	1,484		12			(58	)
Package handling and ground support equipment		208		217		618		644		(4	)		(4	)
Information technology		107		142		366		437		(25	)		(16	)
Vehicles and trailers		99		243		373		539		(59	)		(31	)
Facilities and other		216		448		595		870		(52	)		(32	)
Total capital expenditures	$	997	$	1,379	$	2,582	$	3,974		(28	)		(35	)
Federal Express segment	$	844	$	1,217	$	2,145	$	3,623		(31	)		(41	)
FedEx Freight segment		129		139		359		280		(7	)		28
Other		24		23		78		71		4			10
Total capital expenditures	$	997	$	1,379	$	2,582	$	3,974		(28	)		(35	)

Table of Contents

~~Capital~~The ~~expenditures~~following ~~decreased~~table incompares ~~the~~capital ~~third~~expenditures ~~quarter~~by ~~primarily~~asset ~~due~~category ~~to decreased spending on facilities~~ and ~~other~~reportable ~~and~~segment ~~vehicles~~for ~~and trailers at Federal Express. Capital expenditures decreased in~~ the ~~nine~~three-month ~~months~~periods ofended ~~2025 primarily due to decreased spending on aircraft and related equipment~~August 31, ~~facilities~~2025 and ~~other,~~2024 ~~and~~(in ~~vehicles and trailers at Federal Express.~~millions):



	2025		2024		Percent Change
Aircraft and related equipment	$	60	$	181	(67)
Package handling and ground support equipment	205		197		4
Information technology	118		153		(23)
Vehicles and trailers	47		90		(48)
Facilities and other	193		146		32
Total capital expenditures	$	623	$	767	(19)

Federal Express segment	$	568	$	703	(19)
FedEx Freight segment	32		35		(9)
Other	23		29		(21)
Total capital expenditures	$	623	$	767	(19)

Capital expenditures decreased in the first quarter of 2026 primarily due to decreased spending on aircraft and related equipment at Federal Express, vehicles and trailers at Federal Express and FedEx Freight, and information and technology investments at Federal Express and FedEx Freight as a result of continuing to prioritize investments that support increasing efficiency and reducing our cost to serve. These reductions were partially offset by increased spending on facilities and other at Federal Express and FedEx Freight.

GUARANTOR FINANCIAL INFORMATION

We are providing the following information in compliance with Rule 13-01 of Regulation S-X, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities” with respect to our senior unsecured debt securities and Pass-Through Certificates, Series 2020-1AA (the “Certificates”).

The $19.19 billion principal amount of the senior unsecured notes were issued by FedEx under a shelf registration statement and are guaranteed by certain direct and indirect subsidiaries of FedEx (“Guarantor Subsidiaries”). FedEx owns, directly or indirectly, 100% of each Guarantor Subsidiary. The guarantees are (1) unsecured obligations of the respective Guarantor Subsidiary, (2) rank equally with all of their other unsecured and unsubordinated indebtedness, and (3) are full and unconditional and joint and several. If we sell, transfer, or otherwise dispose of all of the capital stock or all or substantially all of the assets of a Guarantor Subsidiary to any person that is not an affiliate of FedEx, the guarantee of that Guarantor Subsidiary will terminate, and holders of debt securities will no longer have a direct claim against such subsidiary under the guarantee. See Note 4 of the accompanying unaudited condensed consolidated financial statements for information regarding the ~~exchange~~issuance ~~offer~~by ~~and~~FedEx ~~consent~~of ~~solicitation~~its ~~transactions~~3.500% ~~related~~Notes todue ~~the~~2032 ~~guarantee~~and of4.125% ~~FedEx~~Notes ~~Freight~~due 2037 guaranteed by the Guarantor Subsidiaries that ~~were~~was completed during the ~~third~~first quarter of ~~2025~~2026.

Additionally, FedEx fully and unconditionally guarantees the payment obligation of Federal Express in respect of the $~~737~~711 million principal amount of the Certificates. See Note 4 of the accompanying unaudited condensed consolidated financial statements and Note 6 to the financial statements included in our Annual Report for additional information regarding the terms of the Certificates.

- 36 -

The following tables present summarized financial information for FedEx (as Parent) and the Guarantor Subsidiaries on a combined basis after transactions and balances within the combined entities have been eliminated.

Parent and Guarantor Subsidiaries

The following table presents the summarized balance sheet information as of ~~February 28~~August 31, 2025 and May 31, ~~2024~~2025 (in millions):

	February 28, 2025		May 31, 2024
			August 31, 2025		May 31, 2025
Current Assets	$	~~9,420~~	$	109,~~618~~924	$	9,514
Intercompany Receivable		~~3,953~~	5,145	~~4,625~~	4,278
Total Assets		~~81,915~~	84,186	~~83,880~~	83,125
Current Liabilities		~~10,112~~	11,439	~~9,658~~	11,202
Intercompany Payable		—	—	—	—
Total Liabilities		~~51,550~~	$	5253,~~551~~492	$	52,324

~~The following table presents the summarized statement of income information for the nine~~-~~month period ended February 28, 2025 (in millions):~~38-

Revenue	$	48,582
Intercompany Charges, net		(2,878	)
Operating Income		3,035
Intercompany Charges, net		177
Income Before Income Taxes		2,387
Net Income	$	1,675

Table of Contents

The following table presents the summarized statement of income information for the three-month period ended August 31, 2025 (in millions):


Revenue	$	16,643
Intercompany Charges, net	(1,106)
Operating Income	1,265
Intercompany Charges, net	71
Income Before Income Taxes	1,043
Net Income	$	691

The following tables present summarized financial information for FedEx (as Parent Guarantor) and Federal Express (as Subsidiary Issuer) on a combined basis after transactions and balances within the combined entities have been eliminated.

Parent Guarantor and Subsidiary Issuer

The following table presents the summarized balance sheet information as of ~~February 28~~August 31, 2025 and May 31, ~~2024~~2025 (in millions):

	February 28, 2025		May 31, 2024
			August 31, 2025		May 31,2025
Current Assets	$	~~9,383~~	$	49,~~473~~856	$	9,504
Intercompany Receivable		~~772~~	1,187	~~7,399~~	581
Total Assets		~~70,884~~	73,227	~~62,900~~	72,044
Current Liabilities		~~9,272~~	10,598	~~5,958~~	10,310
Intercompany Payable		—	—	—	—
Total Liabilities		~~48,426~~	$	3850,~~962~~346	$	49,200

The following table presents the summarized statement of income information for the ~~nine~~three-month period ended ~~February 28~~August 31, 2025 (in millions):

Revenue	$	~~41,760~~		$	14,302
Intercompany Charges, net		~~(3,487~~	)	(1,261)
Operating Income		~~2,238~~		894
Intercompany Charges, net		~~(21~~	)	10
Income Before Income Taxes		~~2,396~~		1,035
Net Income	$	~~1,835~~		$	772

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LIQUIDITY OUTLOOK

In response to current business and economic conditions as referenced above in the “Outlook” section of this MD&A, we are continuing to actively manage and optimize our capital allocation in response to the slowdown in the economy, inflationary pressures, changing fuel prices, geopolitical conflicts, and uncertainty regarding international trade, including the impact of global trade policies. We held $56.12 billion in cash and cash equivalents at ~~February 28~~August 31, 2025 and had $3.5 billion in available liquidity under our $1.75 billion three-year credit agreement (the “Three-Year Credit Agreement”) and $1.75 billion five-year credit agreement (the “Five-Year Credit Agreement” and together with the Three-Year Credit Agreement, the “Credit Agreements”), and we believe that our cash and cash equivalents, cash from operations, and available financing sources will be adequate to meet our liquidity needs, which include operational requirements, expected capital expenditures, voluntary pension contributions, dividend payments, and stock repurchases. In the third quarter of 2025, we began incurring costs and expenses related to the planned spin-off of FedEx Freight, which are expected to be significant but ~~will~~are not ~~materially~~expected to adversely affect our liquidity.

We repurchased an aggregate of $~~497~~500 million of our common stock in the ~~third~~first quarter of ~~2025~~2026 through open market transactions. ~~For the nine months of 2025, we completed $2.5 billion in share repurchases through ASR and open market transactions.~~ See Note 1 of the accompanying unaudited condensed consolidated financial statements and “Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” for more information. ~~Depending~~Subject onto market conditions, our liquidity needs, and other factors, we ~~may~~expect ~~consider~~to continue repurchasing additional shares of our common stock during the ~~fourth~~remainder ~~quarter~~ of ~~2025~~2026.

Our cash and cash equivalents balance at ~~February 28~~August 31, 2025 includes $24.70 billion of cash in foreign jurisdictions associated with our permanent reinvestment strategy. We are able to access the majority of this cash without a material tax cost and do not believe that the indefinite reinvestment of these funds impairs our ability to meet our U.S. domestic debt or working capital obligations.

Our capital expenditures for 2025 are expected to be approximately $4.9 billion, $0.3 billion lower than 2024, as we continue to reduce our capital intensity relative to revenue. Aircraft spend is expected to decline, partially offset by increased investments in network optimization and modernization of our facilities.-39-

Table of Contents

Our capital expenditures for 2026 are expected to be approximately $4.5 billion, $0.4 billion higher than 2025.The increase is driven by investment in Network 2.0 initiatives and other efforts to modernize our facilities and package handling equipment in the U.S. and internationally. Aircraft spend is expected to decline to approximately $1.0 billion, $0.3 billion lower than 2025.

There have been no material changes to the contractual commitments described in Part II, Item 7 in our Annual Report. We do not have any guarantees or other off-balance sheet financing arrangements, including variable interest entities, which we believe could have a material effect on our financial condition or liquidity.

We have several aircraft modernization programs under way that are supported by the purchase of Boeing 777 Freighter (“B777F”) and Boeing 767-300 Freighter (“B767F”) aircraft. These aircraft are significantly more fuel-efficient per unit than the aircraft types previously utilized, and these expenditures are necessary to achieve significant long-term operating savings and to replace older aircraft. Our ability to delay the timing of these aircraft-related expenditures is limited without incurring significant costs to modify existing purchase agreements. In March 2025, Federal Express exercised options to purchase an additional eight B777F aircraft, three of which are expected to be delivered in calendar year 2026 and five of which are expected to be delivered in calendar year 2027. Additionally, we have extended the retirement of the entire Boeing MD-11 fleet from 2028 to the end of 2032.

The Three-Year Credit Agreement and the Five-Year Credit Agreement expire in March 2027 and March 2029, respectively. Each of the Credit Agreements has a $125 million letter of credit sublimit. The Credit Agreements are available to finance our operations and other cash flow needs. See Note 4 of the accompanying unaudited condensed consolidated financial statements for more information.

We have a shelf registration statement filed with the Securities and Exchange Commission (“SEC”) that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock and allows pass-through trusts formed by Federal Express to sell, in one or more future offerings, pass-through certificates.

During the ~~nine~~first three months of ~~2025~~2026, we made voluntary contributions of $~~800~~200 million to our tax-qualified U.S. domestic pension plan (“U.S. Pension Plan”) and anticipate making up to $200 million of additional voluntary contributions during the remainder of 2026. There are currently no required minimum contributions to our U.S. Pension Plan, and we maintain a credit balance related to our cumulative excess voluntary pension contributions over those required that exceeds $3.0 billion. The credit balance is subtracted from plan assets to determine the minimum funding requirements. Therefore, we have the flexibility to eliminate all required contributions to our U.S. Pension Plan for several years. Our U.S. Pension Plan has ample funds to meet expected benefit payments.

On ~~February 14~~August 7, 2025, our Board of Directors declared a quarterly cash dividend of $1.3845 per share of common stock. The dividend will be paid on ~~April~~ October 1, 2025 to stockholders of record as of the close of business on ~~March 10~~September 8, 2025. Each quarterly dividend payment is subject to review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis.

Standard & Poor’s has assigned us a senior unsecured debt credit rating of BBB, a Certificates rating of AA-, a commercial paper rating of A-2, and a ratings outlook of “stable.” Moody’s Investors Service has assigned us an unsecured debt credit rating of Baa2, a Certificates rating of Aa3, a commercial paper rating of P-2, and a ratings outlook of “stable.” Our interest expense may increase in the event of a reduction in our credit rating. If our unsecured debt or commercial paper ratings are reduced to below investment grade, our access to the capital markets may become limited.

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Certificates rating of Aa3, a commercial paper rating of P-2, and a ratings outlook of “stable.” Our interest expense may increase in the event of a reduction in our credit rating. If our unsecured debt or commercial paper ratings are reduced to below investment grade, our access to the capital markets may become limited.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make significant judgments and estimates to develop amounts reflected and disclosed in the financial statements. In many cases, there are alternative policies or estimation techniques that could be used. We maintain a thorough process to review the application of our accounting policies and to evaluate the appropriateness of the many estimates that are required to prepare the financial statements of a complex, global corporation. However, even under optimal circumstances, estimates routinely require adjustment based on changing circumstances and new or better information.

GOODWILL. Goodwill is tested for impairment between annual tests whenever events or circumstances make it more likely than not that the fair value of a reporting unit has fallen below its carrying value. In connection with our one FedEx consolidation plan, we reevaluated the conclusion of our 2024 goodwill impairment tests as of June 1, 2024, and concluded that the estimated fair values of our reporting units with significant goodwill continued to exceed their carrying values. We do not believe there has been any additional change of events or circumstances that would indicate that additional reevaluation of the goodwill of our reporting units is required as of ~~February 28~~August 31, 2025, nor do we believe the goodwill of our reporting units is at risk of failing impairment testing. For additional details on goodwill impairment testing, refer to Note 1 to the financial statements included in our Annual Report.

Information regarding our critical accounting estimates can be found in our Annual Report, including Note 1 to the financial statements therein. Management has discussed the development and selection of these critical accounting estimates with the Audit and Finance Committee of our Board of Directors and with our independent registered public accounting firm.

OTHER MATTERS

In March 2025, FedEx submitted a claim to the USPS in accordance with the dispute provisions of the parties’ contract, seeking recovery of losses arising between October 1, 2020 and September 30, 2023 from the USPS’s diversion of mail to other carriers in breach of the contract between Federal Express and the USPS executed in April 2013.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including (but not limited to) those contained in “General,” “Trends Affecting Our Business,” “Business Optimization Costs,” “Income Taxes,” “Outlook,” “Liquidity Outlook,” “Legal Proceedings,” and “Risk Factors” and the “Description of Business Segments and Summary of Significant Accounting Policies,” “Financing Arrangements,” “Retirement Plans,” “Commitments,” and “Contingencies” notes to our unaudited condensed consolidated financial statements, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) with respect to our financial condition, results of operations, cash flows, plans, objectives, future performance, and business and the assumptions underlying such statements. Forward-looking statements include those preceded by, followed by, or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “plans,” “estimates,” “targets,” “forecasts,” “projects,” “intends,” or similar expressions. These forward-looking statements, which are intended to enjoy the protection of the safe harbor for forward-looking statements provided by the PSLRA as well as protections afforded by other federal securities laws, involve risks and uncertainties. Actual results may differ materially from those contemplated (expressed or implied) by such forward-looking statements because of, among other things, potential risks and uncertainties, such as:

~~economic conditions in the global markets in which we operate;~~-40-

~~significant~~Table ~~changes in the volumes~~ of ~~shipments transported through our networks, customer demand for our various services, or the prices we obtain for our services;~~Contents

~~geopolitical~~“Description ~~developments~~of Business Segments and ~~additional~~Summary ~~changes~~of inSignificant Accounting Policies,” “Financing Arrangements,” “Retirement Plans,” “Commitments,” and/ “Contingencies” notes to our unaudited condensed consolidated financial statements, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) with respect to our financial condition, results of operations, cash flows, plans, objectives, future performance, and business and the assumptions underlying such statements. Forward-looking statements include those preceded by, followed by, or ~~uncertainty~~that ~~regarding~~include ~~international~~the ~~trade~~words ~~policies~~“will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “plans,” “estimates,” “targets,” “forecasts,” “projects,” “intends,” or similar expressions. These forward-looking statements, which are intended to enjoy the protection of the safe harbor for forward-looking statements provided by the PSLRA as well as protections afforded by other federal securities laws, involve risks and ~~relations;~~uncertainties. Actual results may differ materially from those contemplated (expressed or implied) by such forward-looking statements because of, among other things, potential risks and uncertainties, such as:

~~the~~•economic ~~price~~conditions ~~and~~in ~~availability~~the ofglobal ~~jet~~markets ~~and~~in ~~vehicle~~which ~~fuel~~we operate;

~~failure~~•significant tochanges ~~successfully~~in ~~implement~~the volumes of shipments transported through our ~~business~~networks, ~~strategy~~customer ~~and~~demand ~~effectively~~for ~~respond~~our tovarious ~~changes~~services, inor ~~market~~the ~~dynamics~~prices ~~and~~we ~~customer~~obtain ~~preferences;~~for our services;

~~our~~•geopolitical ~~ability~~developments toand ~~execute~~uncertainty ~~our DRIVE transformation, including Network 2.0~~ and/or ~~the~~additional ~~redesign~~volatility ~~of the Federal Express international air network,~~ in the ~~expected~~global ~~time~~trade frame and at the expected cost and achieve the expected operational efficiencies and network flexibility, alignment of our cost base with demand, cost savings and reductions to our permanent cost structure, and other benefits while managing the potential risksenvironment;

-•the 39price -and availability of jet and vehicle fuel;

~~our~~•failure ~~ability~~ to successfully implement ~~the~~our ~~planned~~business ~~tax-free~~strategy ~~spin-off~~and ofeffectively ~~the~~respond ~~FedEx~~to ~~Freight~~changes ~~business~~in ~~into~~market adynamics ~~new publicly traded company~~ and ~~achieve~~customer ~~the anticipated benefits of such transaction~~preferences;

~~the~~•our ~~timing~~ability ~~and~~to ~~amount~~execute ofour ~~any~~transformation ~~costs~~initiatives, orincluding ~~benefits~~Network or2.0 ~~any~~and ~~specific~~the ~~outcome,~~redesign ~~transaction~~of the Federal Express international air network, orin ~~change~~the ~~(of~~expected ~~which~~time ~~there~~frame ~~can~~and beat nothe ~~assurance),~~expected orcost and achieve the ~~terms,~~expected ~~timing,~~operational efficiencies and ~~structure~~network ~~thereof~~flexibility, ~~related~~alignment of our cost base with demand, cost savings and reductions to our ~~global~~permanent ~~transformation~~cost ~~program~~structure, and other ~~ongoing~~benefits ~~reviews~~while ~~and~~managing ~~initiatives~~the potential risks;

•our ability to successfully implement ~~our~~the ~~workforce~~planned ~~reduction~~tax-free inspin-off ~~Europe~~of the FedEx Freight business into a new publicly traded company and achieve the anticipated benefits of such transaction;

a•the ~~significant~~timing ~~data~~and ~~breach~~amount of any costs or ~~other~~benefits ~~disruption~~or toany ~~our~~specific ~~technology~~outcome, ~~infrastructure~~transaction, ~~and~~or ~~our~~change ~~ability~~(of towhich ~~mitigate~~there ~~the~~can ~~technological,~~be ~~operational~~no assurance), ~~legal~~or ~~and~~the ~~regulatory~~terms, timing, and ~~reputational~~structure ~~risks~~thereof, related to ~~emerging~~our ~~technologies~~global ~~such~~transformation asprogram ~~autonomous~~and ~~technology~~other ~~and~~ongoing ~~artificial~~reviews ~~intelligence;~~and initiatives;

~~failure~~•our toability ~~remove costs related~~ to ~~services~~successfully ~~provided~~implement toour ~~the~~workforce ~~USPS~~reduction ~~under~~in ~~the contract for Federal Express to provide the USPS domestic transportation services, which expired on September 29, 2024~~Europe;

~~the~~•a ~~future~~significant ~~rate~~data ofbreach ~~e-commerce~~or ~~growth~~other disruption to our technology infrastructure, and our ability to ~~successfully~~mitigate ~~expand~~the ~~our~~technological, ~~e-commerce~~operational, ~~services~~legal ~~portfolio~~and regulatory, and reputational risks related to emerging technologies such as autonomous technology and artificial intelligence;

~~increased~~•the ~~insurance~~future ~~and~~rate ~~claims~~of ~~expenses~~e-commerce ~~related~~growth ~~to vehicle accidents, workers’ compensation claims, property~~ and ~~cargo~~our ~~loss,~~ability ~~general~~to ~~business~~successfully ~~liabilities,~~expand ~~and~~our ~~benefits~~e-commerce ~~paid~~services ~~under employee disability programs~~portfolio;

~~failure~~•increased insurance and claims expenses related to ~~receive~~vehicle oraccidents, ~~collect~~workers’ ~~expected~~compensation ~~insurance~~claims, ~~coverage~~property and cargo loss, general business liabilities, and benefits paid under employee disability programs;

~~the~~•failure ~~effect~~to ofreceive ~~any international conflicts~~ or ~~terrorist~~collect ~~activities~~expected oninsurance ~~the United States and global economies in general, the transportation industry, or FedEx in particular~~coverage;

~~failure~~•the effect of ~~third-party~~any ~~service~~international ~~providers~~conflicts toor ~~perform~~terrorist asactivities ~~expected,~~on orthe ~~disruptions~~United inStates ~~our~~and ~~relationships~~global ~~with~~economies ~~those~~in ~~providers~~general, orthe ~~their~~transportation ~~provision~~industry, ofor ~~services~~FedEx toin ~~FedEx~~particular;

~~widespread~~•failure ~~outbreak~~ of anthird-party ~~illness~~service providers to perform as expected, or ~~any~~disruptions ~~other~~in ~~communicable~~our ~~disease~~relationships with those providers or ~~public~~their ~~health~~provision ~~crisis~~of services to FedEx;

~~damage~~•widespread tooutbreak ~~our~~of ~~reputation~~an illness or ~~loss~~any ofother ~~brand~~communicable ~~equity~~disease or public health crisis;

~~the~~•damage ~~effect of intense competition on our ability~~ to ~~maintain or increase~~ our ~~prices~~reputation ~~(including our fuel surcharges)~~ or toloss ~~maintain~~of orbrand ~~grow our revenue and market share~~equity;

~~our~~•the ~~ability~~effect toof ~~manage~~intense ~~our~~competition ~~network~~on ~~capacity~~our ~~and~~ability ~~cost~~to ~~structure~~maintain ~~for~~or ~~capital~~increase ~~expenditures~~our ~~and~~prices ~~operating~~(including ~~expenses,~~our ~~and~~fuel ~~match~~surcharges) itor to ~~shifting~~maintain ~~and~~or ~~future~~grow ~~customer~~our ~~volume~~revenue ~~levels~~and market share;

•our ability to ~~execute~~manage our network capacity and ~~effectively~~cost ~~operate,~~structure ~~integrate,~~for ~~leverage,~~capital expenditures and ~~grow~~operating ~~acquired businesses~~expenses, and tomatch ~~continue~~it to ~~support~~shifting ~~the~~and ~~value~~future wecustomer ~~allocate~~volume ~~to these acquired businesses~~levels;

~~noncash impairment charges related to our goodwill and certain deferred tax assets;~~-41-

~~failure~~Table toof ~~attract and retain employee talent and our ability to meet our labor and purchased transportation needs while controlling related costs and maintain our company culture;~~Contents

•our ability to ~~maintain~~execute ~~good~~and ~~relationships~~effectively ~~with~~operate, ~~our~~integrate, ~~employees~~leverage, and ~~avoid~~grow ~~attempts~~acquired ~~by labor organizations to organize groups of our employees~~businesses, ~~which could significantly increase our operating costs~~ and ~~reduce~~to ~~our~~continue ~~operational~~to ~~flexibility,~~support ~~as well as~~ the ~~outcome~~value ofwe ~~negotiations~~allocate to ~~reach~~these ~~new~~acquired ~~collective bargaining agreements (including with the pilots of Federal Express)~~businesses;

~~the~~•noncash ~~effect~~impairment ofcharges ~~costs~~ related to ~~lawsuits~~our ingoodwill ~~which~~and itcertain isdeferred ~~alleged~~tax ~~that Federal Express should be treated as an employer or joint employer of drivers employed by service providers engaged by Federal Express~~assets;

~~increasing~~•failure ~~costs,~~to ~~the~~attract ~~volatility~~and ofretain ~~costs~~employee talent and ~~funding~~our ~~requirements,~~ability ~~and~~to ~~other~~meet ~~legal~~our ~~mandates~~labor ~~for~~and ~~employee~~purchased ~~benefits,~~transportation ~~especially~~needs ~~pension~~while controlling related costs and ~~healthcare~~maintain ~~benefits~~our company culture;

•our ability to maintain good relationships with our employees and avoid attempts by labor organizations to organize groups of our employees, which could significantly increase our operating costs and reduce our operational flexibility, as well as the ~~effects~~outcome of ~~global~~negotiations ~~climate~~to ~~change~~reach new collective bargaining agreements (including with the pilots of Federal Express);

~~our~~•increasing ~~ability~~costs, tothe ~~achieve~~volatility orof ~~demonstrate~~costs ~~progress~~and onfunding ~~our~~requirements, ~~goal~~and ofother ~~carbon~~legal ~~neutrality~~mandates for ~~our~~employee ~~global~~benefits, ~~operations~~especially bypension ~~calendar~~and ~~2040~~healthcare benefits;

~~our~~•the ~~ability~~effects toof ~~quickly~~global ~~and~~climate ~~effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography~~change;

~~any effects on~~ •our ~~businesses~~ability ~~resulting~~to ~~from~~achieve ~~evolving~~ or ~~new~~demonstrate ~~U.S.~~progress ~~domestic~~on ~~or international government regulations, laws, policies, and actions, which could be unfavorable to~~ our ~~business,~~goal ~~including labor (such as joint employment standards or changes to the Railway Labor Act~~ of ~~1926,~~carbon asneutrality ~~amended,~~for ~~affecting~~our ~~Federal Express employees); regulatory or other actions affecting data protection;~~ global ~~aviation~~operations orby ~~other~~calendar ~~transportation rights~~2040; ~~increased air cargo, pilot flight and duty time, and~~

-•our 40ability -to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography;

•any effects on our businesses resulting from evolving or new U.S. domestic or international government regulations, laws, policies, and actions, which could be unfavorable to our business, including labor (such as joint employment standards or changes to the Railway Labor Act of 1926, as amended, affecting Federal Express employees); regulatory or other actions affecting data protection; global aviation or other transportation rights; increased air cargo, pilot flight and duty time, and other security or safety requirements; import and export controls; the use of new technology and accounting; ~~trade~~changes ~~(such~~to global ~~as protectionist measures, tariffs, or restrictions on free~~ trade) policies; foreign exchange intervention in response to currency volatility; environmental (such as global climate change legislation); or postal rules;

•adverse changes in tax laws, regulations, and interpretations or challenges to our tax positions;

•increasing costs related to changing and heightened regulations and enforcement related to data protection;

•the increasing costs of compliance with federal, state, and foreign governmental agency mandates (including the Foreign Corrupt Practices Act and the U.K. Bribery Act) and defending against inappropriate or unjustified enforcement or other actions by such agencies;

•changes in foreign currency exchange rates, especially in the euro, Chinese yuan, British pound, Canadian dollar, Australian dollar, Mexican peso, Hong Kong dollar, and Japanese yen, which can affect our sales levels and foreign currency sales prices;

•loss or delay in the collection of accounts receivable;

•any liability resulting from and the costs of defending against class-action, derivative, and other litigation, such as wage-and-hour, joint employment, securities, vehicle accident, and discrimination and retaliation claims, claims related to our reporting and disclosure of environmental and sustainability topics, and any other legal or governmental proceedings, including the matters discussed in Note 109 of the accompanying unaudited condensed consolidated financial statements;

~~adverse~~•the ~~rulings~~sufficiency onof ~~appeals~~insurance ~~and~~coverage inwe ~~other future judicial decisions, subsequent adverse jury findings, and changes in judicial precedent~~purchase;

•the ~~sufficiency~~effect of ~~insurance~~technology ~~coverage~~developments we(including ~~purchase~~artificial intelligence and machine learning) on our operations and on demand for our services, and our ability to continue to identify and eliminate unnecessary information-technology redundancy and complexity throughout the organization;

~~the~~•disruptions ~~effect~~in ofglobal ~~technology~~supply ~~developments~~chains, ~~(including~~which ~~artificial~~can ~~intelligence~~limit ~~and~~the ~~machine~~access ~~learning)~~of onFedEx ~~our operations~~ and ~~on demand for~~ our ~~services,~~service ~~and~~providers ~~our ability~~ to ~~continue~~vehicles ~~to identify~~ and ~~eliminate~~other ~~unnecessary~~key ~~information-technology~~capital ~~redundancy~~resources and ~~complexity~~increase ~~throughout~~our ~~the organization~~costs;

~~disruptions~~•difficulties inexperienced ~~global~~by ~~supply~~the ~~chains,~~companies with which ~~can~~we ~~limit~~contract ~~the~~to ~~access~~fly ofsmaller ~~FedEx~~regional “feeder” aircraft in attracting and ~~our~~retaining pilots, which could cause a reduction of service ~~providers~~offered to ~~vehicles~~certain ~~and~~locations, ~~other~~service ~~key~~disruptions, ~~capital~~increased ~~resources~~costs ~~and~~of ~~increase~~operations, ~~our~~and ~~costs~~other difficulties;

difficulties experienced by the companies with which we contract to fly smaller regional “feeder” aircraft in attracting and retaining pilots, which could cause a reduction of service offered to certain locations, service disruptions, increased costs of operations, and other difficulties;-42-

~~governmental~~Table ~~underinvestment in transportation infrastructure, which could increase our costs and adversely affect our service levels due to traffic congestion, prolonged closure~~ of ~~key thoroughfares, or sub-optimal routing of our vehicles and aircraft;~~Contents

~~constraints,~~•governmental ~~volatility,~~underinvestment orin ~~disruption~~transportation ininfrastructure, ~~the~~which ~~capital~~could ~~markets,~~increase our ~~ability~~costs toand ~~maintain~~adversely affect our ~~current~~service ~~credit~~levels ~~ratings,~~due ~~commercial~~to ~~paper~~traffic ~~ratings~~congestion, ~~and~~prolonged ~~senior~~closure ~~unsecured~~of ~~debt~~key ~~and~~thoroughfares, ~~pass~~or sub-~~through~~optimal ~~certificate~~routing ~~credit~~of ~~ratings, and~~ our ~~ability~~vehicles toand ~~meet credit agreement financial covenants~~aircraft; ~~and~~

~~other~~•successful ~~risks~~completion ~~and~~of ~~uncertainties you can find in~~ our ~~press~~planned ~~releases~~stock ~~and SEC filings, including the risk factors identified under Part I, Item IA. “Risk Factors” in our Annual Report, as updated by our quarterly reports on Form 10-Q and current reports on Form 8-K.~~repurchases;

•constraints, volatility, or disruption in the capital markets, our ability to maintain our current credit ratings, commercial paper ratings, and senior unsecured debt and pass-through certificate credit ratings, and our ability to meet credit agreement financial covenants; and

•other risks and uncertainties you can find in our press releases and SEC filings, including the risk factors identified under Part I, Item IA. “Risk Factors” in our Annual Report, as updated by our quarterly reports on Form 10-Q and current reports on Form 8-K.

As a result of these and other factors, no assurance can be given as to our future results and achievements. Accordingly, a forward-looking statement is neither a prediction nor a guarantee of future events or circumstances and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. We are under no obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise.

~~Item~~ITEM 3. ~~Quantitative~~QUANTITATIVE ~~and~~AND ~~Qualitative~~QUALITATIVE ~~Disclosures~~DISCLOSURES ~~About~~ABOUT ~~Market~~MARKET ~~Risk~~RISK

As of ~~February 28~~August 31, 2025, there were no material changes in our market risk sensitive instruments and positions since our disclosures in our Annual Report.

The principal foreign currency exchange rate risks to which we are exposed relate to the euro, Chinese yuan, British pound, Canadian dollar, Australian dollar, Mexican peso, Hong Kong dollar, and Japanese yen. Historically, our exposure to foreign currency fluctuations is more significant with respect to our revenue than our expenses, as a significant portion of our expenses are denominated in U.S. dollars, such as aircraft and fuel expenses. During the first quarter of 2026, the U.S. dollar was weaker relative to the currencies of the foreign countries in which we operate, and the weaker dollar had a slightly negative effect on our results.

- 41 -

denominated in U.S. dollars, such as aircraft and fuel expenses. During the nine months of 2025, the U.S. dollar was weaker relative to the currencies of the foreign countries in which we operate, and the weaker dollar had a positive effect on our results.

While we have market risk for changes in the price of vehicle and jet fuel, this risk is largely mitigated by our indexed fuel surcharges. For additional discussion of our indexed fuel surcharges, see the “Results of Operations and Outlook — Consolidated Results —Fuel” section of “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” included in our Annual Report.

~~Item~~ITEM 4. ~~Controls~~CONTROLS ~~and~~AND ~~Procedures~~PROCEDURES

The management of FedEx, with the participation of our principal executive and financial officers, has evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in our filings under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and communicated to FedEx management as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officers have concluded that such disclosure controls and procedures were effective as of ~~February 28~~August 31, 2025 (the end of the period covered by this Quarterly Report on Form 10-Q).

During our fiscal quarter ended ~~February 28~~August 31, 2025, no change occurred in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

~~Item~~ITEM 1. ~~Legal~~LEGAL ~~Proceedings~~ PROCEEDINGS

For a description of all material pending legal proceedings, see Note 109 of the accompanying unaudited condensed consolidated financial statements, which is incorporated by reference herein. ~~In connection with the one FedEx consolidation, effective June 1, 2024, Federal Express assumed liability for all pending litigation to which FedEx Ground and FedEx Services were previously party.~~

~~Item~~ITEM 1A. ~~Risk~~RISK ~~Factors~~ FACTORS

~~Other~~There ~~than the risk factors set forth below, there~~ have been no material changes from the risk factors disclosed in our Annual Report in response to Part I, Item 1A of Form 10-K. Additional risks not currently known to us or that we currently deem to be immaterial also may materially affect our business, results of operations, financial condition, and the price of our common stock.

~~The planned spin~~-~~off of FedEx Freight may not be completed on the terms or timeline currently contemplated, if at all, and there is no guarantee that the spin~~43-off, if completed, will achieve the intended financial and strategic benefits. In December 2024, we announced our intention to separate FedEx Freight from our portfolio structure through the creation of a separate publicly traded company (“NewCo”). The planned separation, which would be implemented through the spin-off of shares of NewCo to FedEx stockholders, is expected to be tax-free for U.S. federal income tax purposes for FedEx stockholders and be completed by June 2026. Completion of the planned spin-off is subject to the final approval of our Board of Directors and will be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the receipt and continuing validity of a private letter ruling from the Internal Revenue Service (“IRS”) and/or favorable opinions of our U.S. tax advisors with respect to the tax-free nature of the transaction, the receipt of other regulatory and contractual approvals, and the availability of financing for NewCo on satisfactory terms. The proposed spin-off is complex in nature, and unanticipated changes or developments could delay or prevent the completion of the spin-off or cause the spin-off to occur on terms or conditions that are different or less favorable than expected.

~~Whether~~Table orof ~~not we complete the spin-off, we may face significant challenges in connection with the transaction, including, without limitation:~~Contents

~~the~~ITEM ~~diversion~~2. ofUNREGISTERED ~~the~~SALES ~~attention~~OF ofEQUITY ~~our~~SECURITIES ~~Board~~AND ofUSE ~~Directors~~OF ~~and senior management from the pursuit of our business strategy and long-term planning and of our management and employees from day-to-day operations;~~PROCEEDS

our ability to maintain NewCo’s continued support of our DRIVE transformation, Network 2.0, the redesign of the Federal Express international air network, and other strategic initiatives;

our ability to maintain operational, commercial, data and information technology, brand and intellectual property, human resources, finance, legal, sales, and marketing continuity where necessary between FedEx and NewCo and establish stand-alone functions and infrastructure at NewCo where necessary;

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the risk that if the IRS determines that certain steps of the planned spin-off do not qualify for tax-free treatment for U.S. federal income tax purposes, FedEx and its stockholders could incur significant tax liabilities;

costs and expenses related to the planned spin-off (which are expected to be significant), including costs related to commercial and operational dis-synergies; restructuring and other transaction expenses; expenses related to establishing stand-alone operational, commercial, personnel, and digital and technology infrastructure at NewCo; and accounting, tax, legal, and other professional services expenses, any of which may be higher than initially expected;

retaining existing business and operational relationships, including with customers, suppliers, employees, and other counterparties;

addressing employee issues so as to promote retention and motivation and maintain efficient and effective labor and employee relations;

obtaining any required regulatory licenses, operating authority, or contractual consents;

determining the appropriate allocations of assets and liabilities between FedEx and NewCo, as well as the terms governing the relationship between FedEx and NewCo following the spin-off; and

potential negative reactions from investors and other external stakeholders.

There can be no assurance that the spin-off, if completed, will achieve the intended financial and strategic benefits (which are based on a number of assumptions, some or all of which may prove to be incorrect) or provide greater value to our stockholders than that reflected in the current price of our common stock, or that the dis-synergies of the transaction (including costs of related restructuring transactions) will not exceed the anticipated amounts. The market price of our common stock could be subject to significant fluctuation or otherwise be adversely affected by the uncertainties described above. Changes in the stockholder base of FedEx and/or NewCo following the planned spin-off could also cause the price of either company’s common stock to fluctuate.

If the planned spin-off occurs, FedEx and NewCo will each be smaller, less diversified companies with more concentrated areas of focus. As a result, FedEx and NewCo may become more vulnerable to changing macroeconomic and market conditions; the results of operations, cash flows, effective tax rate, and other financial and operating metrics of each company may be subject to increased volatility; and the ability of each company to fund capital expenditures and investments, pay dividends, and service debt may be diminished.

To the extent challenges related to the planned spin-off of NewCo adversely affect our business, they may also have the effect of heightening other risks disclosed in our Annual Report, any of which could materially and adversely affect our business, results of operations, and the price of our common stock. Such risks include, but are not limited to, our ability to execute our DRIVE transformation, Network 2.0, and broader business strategy and effectively respond to changes in market dynamics and customer preferences; disruptions to our technology infrastructure, including through cyberattack or cyber-intrusion, ransomware attack, or malware attack; our ability to achieve or demonstrate progress on our goal of carbon neutrality for our global operations by calendar 2040; and our ability to maintain our strong reputation and the value of the FedEx brand.

A significant data breach or other disruption to our technology infrastructure could disrupt our operations and result in the loss of critical sensitive or confidential information, adversely affecting our reputation, business, or results of operations. Our ability to attract and retain customers, efficiently operate our businesses, execute our DRIVE transformation, and compete effectively increasingly depend in part upon the sophistication, security, and reliability of our technology network, including our ability to provide features of service that are important to our customers, to protect our confidential business information and the information provided by our customers, and to maintain customer confidence in our ability to protect our systems and to provide services consistent with their expectations. For example, we rely on information technology to receive shipment information in advance of physical receipt of packages, to track items that move through our delivery systems, to efficiently plan deliveries, to clear shipments through customs, to execute billing processes, and to track and report financial and operational data. We are subject to risks imposed by data breaches and operational disruptions, both random and targeted, including through cyberattack or cyber-intrusion, ransomware attack, malware attack, or denial of service attack by computer hackers, foreign governments and state-sponsored actors, cyber terrorists and hacktivists, cyber criminals, malicious employees or other insiders of FedEx or third-party service providers, and other groups and individuals. Data breaches and other technology disruptions of companies and governments continue to increase as the number, intensity, and sophistication of attempted attacks and intrusions from around the world have increased and we, our customers, and third parties increasingly store and transmit data by means of connected information technology systems. Additionally, risks such as code anomalies, “Acts of God,” transitional challenges in migrating operating company functionality to our FedEx enterprise automation platforms, data leakage, cyber-fraud, and human error pose a direct threat to our products, services, systems, and data and could result in unauthorized or block legitimate access to sensitive or confidential data regarding our operations, customers, employees, and suppliers, including personal information.

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The technology infrastructure of acquired businesses, as well as their practices related to the use and maintenance of data, could also present issues that we were not able to identify prior to the acquisition. For example, ShopRunner, which we acquired in 2021, collects and stores certain personal data of its merchants and their buyers, its partners, consumers with whom it has a direct relationship, and users of its applications. Additionally, it uses third-party service providers and subprocessors to help deliver services to merchants and their buyers. These service providers and subprocessors may store or access personal data and/or other confidential information. The foregoing factors increase the risk of data incidents and the amount of potential exposure in the event of a data breach.

We also depend on and interact with the technology and systems of third parties, including our customers and third-party service providers such as cloud service providers and delivery services. Certain third parties host, process, or have access to information we maintain about our company, customers, employees, and vendors and/or operate systems that are critical to our business operations and services. Like us, these third parties are subject to risks imposed by data breaches, cyberattacks, and other events or actions that could damage, disrupt, or close down their networks or systems. We have security processes, protocols, and standards in place, including contractual provisions requiring such security measures, that are applicable to such third parties and are designed to protect information that is held by them, or to which they have access, as a result of their engagements with us. A cyberattack has and may in the future defeat one or more of such third parties’ security measures, allowing an attacker to obtain information about our company, customers, employees, and vendors or disrupt our operations. Certain third parties also have and may in the future experience operational disruptions or human error that could result in unauthorized access to sensitive or confidential data regarding our operations, customers, employees, and suppliers, including personal information. See “Failure of third-party service providers to perform as expected, or disruptions in our relationships with those providers or their provision of services to FedEx, could have a material adverse effect on our business and results of operations” under “Item 1A. Risk Factors” of our Annual Report for more information. The information systems of one of our third-party service providers recently experienced a security breach that resulted in unauthorized access to the third-party’s cloud environment, including certain systems that contained our data. To date this incident has not had a material adverse effect on our business or results of operations. However, there can be no assurance that this incident or similar events will not have such an effect in the future.

From time to time we experience disruptions to our complex, global technology infrastructure, including our computer systems and websites. Such events could result in the loss of confidential business or customer information; require substantial repairs or replacements, resulting in significant costs; and lead to the temporary or permanent transfer by customers of some or all of their business to our competitors. The foregoing could harm our reputation and adversely affect our business, customer service, and results of operations. Additionally, a security breach could require us to devote significant management resources to address the problems created. These types of adverse effects could also occur in the event the confidentiality, integrity, or availability of company and customer information was compromised due to a data loss by FedEx or a trusted third party.

We or the third parties with which we share information may not discover any security breach and loss of information for a significant period of time after the security breach occurs. Even if we detect a cybersecurity incident, the nature and extent of the incident may not be immediately clear. It may also not be clear how best to contain and remediate any harm caused by the cybersecurity incident, and certain errors or actions could be repeated or compounded before they are discovered and remediated. Based on the sophistication of threat actors and the size and complexity of our information systems and network environment, among other factors, an investigation into a cybersecurity incident could take a significant amount of time to complete. In addition, while the investigation of a cybersecurity incident is ongoing, we may not know the full extent of the harm caused by a threat actor, and such harm may spread both internally and to certain customers, vendors, or other third parties. Additionally, our logging capabilities and the logging capabilities of third parties are not always complete or sufficiently detailed, which could affect our ability to fully investigate and understand the scope of security events. Given the age, size, and complexity of our computer systems and network environment, patches for certain vulnerabilities may not exist and, even where patches or other risk-mitigating activities are available, the development of patches or execution of risk-mitigating actions may not occur before an underlying vulnerability is exploited or results in the compromise of our information systems or data. A significant number of our employees as well as customers and others with whom we do business continue to work remotely or in hybrid models, which may heighten these risks. These risks may also be heightened by our DRIVE transformation, including Network 2.0 and our recently completed one FedEx consolidation.

Furthermore, we are subject to an increasing number of cybersecurity compliance and reporting obligations in different jurisdictions that vary in their scope and application, creating conflicting reporting requirements. These factors and the time spent to comply may inhibit our ability to quickly provide complete and reliable information about the cybersecurity incident to customers, counterparties, and regulators, as well as the public. Any or all of these factors could further increase the costs and consequences of a cybersecurity incident on our business and results of operations. See “Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding data protection.” under “Item 1A. Risk Factors” of our Annual Report for additional information on risks related to legal and regulatory developments with respect to data protection.

We have invested and continue to invest in technology security initiatives, information-technology risk management, business continuity, and disaster recovery plans, including investments to retire and replace end-of-life systems. The development and maintenance of these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to

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overcome security measures become increasingly more frequent, intense, and sophisticated. Despite our efforts, we are not fully insulated from data breaches, technology disruptions, data loss, and cyber-fraud, which could adversely affect our competitiveness and results of operations. See “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended May 31, 2021 for information regarding the 2017 NotPetya cyberattack at TNT Express and immaterial cyber incidents we experienced in 2017 and 2018. Additionally, we and our third-party service providers, vendors, and suppliers have experienced repeated attempts by cyber criminals, some of which have been successful, to gain access to customer accounts for the purposes of fraudulently diverting and misappropriating items being transported in our network, fraudulently charging shipment fees to customer or franchisee accounts, and fraudulently sending e-mails to recipients purporting to be from FedEx. To date, none of these fraudulent cyber activities have caused a material disruption to our systems or resulted in any material costs to FedEx.

Our security processes and initiatives may be unable to detect or prevent a breach or disruption in the future. Additionally, the rapid ongoing evolution and increased adoption of emerging technologies such as artificial intelligence and machine learning may make it more difficult to anticipate and implement protective measures to recognize, detect, and prevent the occurrence of any of the cyber events described above. While we have insurance coverage designed to address certain aspects of cyber risks in place, we cannot be certain that such coverage will be sufficient to cover claims, that we will continue to be able to obtain such coverage in amounts we deem sufficient, that our insurance carriers will pay on our insurance claims, or that we will not experience a claim for which coverage is not provided.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

OnIn February 4, 2025, we acquired RouteSmart Technologies, Inc. (“RouteSmart”), a global leader in route planning and optimization solutions., ~~The~~and the consideration paid to certain former stockholders of RouteSmart consisted in part of 359,052 unregistered shares of our common stock valued at approximately $90 million as of the acquisition date. In August 2025, in connection with final post-closing adjustments, we issued another 296 unregistered shares of our common stock valued at less than $100,000 to the former RouteSmart stockholders pursuant to the terms of the acquisition agreement.

The foregoing transaction did not involve any underwriters or underwriting discounts or commissions. The shares of our common stock were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, in a privately negotiated transaction not involving any public offerings or solicitations. See Note 54 of the ~~accompanying~~audited ~~unaudited~~ condensed consolidated financial statements in our Annual Report for additional information regarding ~~this~~the ~~transaction~~RouteSmart acquisition.

Issuer ~~Purchases~~Purchase of Equity Securities

The following table provides information on FedEx’s repurchases of our common stock during the ~~third~~first quarter of ~~2025~~2026:

Period	Total Number ofShares Purchased		Average PricePaid per Share		Total Number ofShares Purchasedas Part ofPubliclyAnnouncedProgram		ApproximateDollar Value ofShares That MayYet Be PurchasedUnder theProgram($ in millions)
Dec. 1-31, 2024		540,000	$	276.78		540,000	$	2,911
Jan. 1-31, 2025		1,258,310	$	276.03		1,258,310	$	2,564
Feb. 1-28, 2025		—	$	—		—	$	2,564
Total		1,798,310				1,798,310	$	2,564

ISSUER PURCHASES OF EQUITY SECURITIES

In March 2024, our Board of Directors authorized a stock repurchase program for repurchases of up to $5.0 billion of FedEx common stock. As part of the 2024 repurchase program, we repurchased 1.8 million shares for $497 million in the open market during the third quarter of 2025. As of March 20, 2025, approximately $2.6 billion remained available to be used for repurchases under the 2024 stock repurchase program. Shares under the program may be repurchased from time to time in the open market or in privately negotiated transactions. No time limits were set for completion of the program; however, we may decide to suspend or discontinue the program.


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under Program ($ in millions)
Jun. 1-30, 2025	650,000	$	224.56	650,000	$	1,918
Jul. 1-31, 2025	1,502,645	$	235.58	1,502,645	$	1,564
Aug. 1-31, 2025	—	$	—	—	$	1,564
Total	2,152,645			2,152,645	$	1,564

~~See~~In ~~Note~~March 12024, ofour ~~the~~Board ~~accompanying~~of ~~unaudited~~Directors ~~condensed~~authorized ~~consolidated~~a ~~financial~~stock ~~statements~~repurchase program for ~~additional~~repurchases ~~information~~of ~~and~~up ~~“Item~~to 2$5.0 ~~Management’s~~billion ~~Discussion~~of ~~and~~FedEx ~~Analysis~~common ofstock. ~~Results~~As part of ~~Operations~~the ~~and~~2024 ~~Financial~~repurchase ~~Condition~~program, –we ~~Financial~~repurchased ~~Condition~~2.2 –million ~~Liquidity~~shares ~~Outlook”~~ for ~~information~~$500 ~~regarding~~million ~~potential~~in ~~stock~~the ~~repurchases~~open market during the ~~remainder~~first quarter of ~~2025~~2026.

~~Item~~As 5of September 18, 2025, approximately $1.6 ~~Other~~billion ~~Information~~remained available to be used for repurchases under the 2024 stock repurchase program. Shares under the program may be repurchased from time to time in the open market or in privately negotiated transactions. No time limits were set for completion of the program; however, we may decide to suspend or discontinue the program.

~~During~~See Note 1 of the ~~quarter~~accompanying ~~ended~~unaudited ~~February~~condensed ~~28,~~consolidated ~~2025,~~financial nostatements ~~director~~for oradditional ~~officer~~information ofand ~~FedEx~~“Item ~~adopted,~~2. ~~modified,~~Management’s orDiscussion ~~terminated~~and ~~any~~Analysis ~~Rule~~of ~~10b5-1~~Results ~~trading~~of ~~arrangement~~Operations orand ~~non-Rule~~Financial ~~10b5-1~~Condition ~~trading~~– ~~arrangement,~~Financial asCondition ~~such~~– ~~terms~~Liquidity ~~are~~Outlook” ~~defined~~for ininformation ~~Item~~regarding ~~408(a)~~planned ofstock ~~Regulation~~repurchases ~~S-K~~during the remainder of 2026.

-ITEM 455. -OTHER INFORMATION

During the quarter ended August 31, 2025, no director or officer of FedEx adopted, modified, or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 6.408(a) ~~Exhibits~~of Regulation S-K.

ExhibitNumber		Description of Exhibit
3.1		Restated Certificate of Incorporation of FedEx. (Filed as Exhibit 3.1 to FedEx’s FY25 Second Quarter Report on Form 10-Q, and incorporated herein by reference).
3.2		Amended and Restated Bylaws of FedEx. (Filed as Exhibit 3.1 to FedEx’s Current Report on Form 8-K dated and filed March 11, 2024, and incorporated herein by reference).
4.1		Indenture, dated as of August 8, 2006, among FedEx, as issuer, the subsidiary guarantors named therein and U.S. Bank Trust Company, National Association, as trustee. (Filed as Exhibit 4.3 to FedEx’s Registration Statement on Form S-3 filed on September 19, 2012, and incorporated herein by reference).
4.2		Supplemental Indenture No. 7, dated as of February 26, 2025, among FedEx, as issuer, the subsidiary guarantors named therein and U.S. Bank Trust Company, National Association, as trustee. (Filed as Exhibit 4.1 to FedEx’s Current Report on Form 8-K dated February 24, 2025 and filed February 26, 2025 (the “February 24, 2025 Form 8-K”), and incorporated herein by reference).
4.3		Indenture, dated as of October 23, 2015, among FedEx, as issuer, the subsidiary guarantors named therein and U.S. Bank Trust Company, National Association, as trustee. (Filed as Exhibit 4.1 to FedEx’s Current Report on Form 8-K dated and filed October 23, 2015, and incorporated herein by reference).
4.4		Supplemental Indenture No. 14, dated as of February 26, 2025, among FedEx, as issuer, the subsidiary guarantors named therein and U.S. Bank Trust Company, National Association, as trustee. (Filed as Exhibit 4.3 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.5		Supplemental Indenture No. 15, dated as of February 26, 2025, among FedEx, as issuer, the subsidiary guarantors named therein and U.S. Bank Trust Company, National Association, as trustee. (Filed as Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.6		Form of 3.400% Notes due 2028 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.7		Form of 4.200% Notes due 2028 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.8		Form of 3.100% Notes due 2029 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.9		Form of 4.250% Notes due 2030 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.10		Form of 2.400% Notes due 2031 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.11		Form of 4.900% Notes due 2034 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.12		Form of 3.900% Notes due 2035 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.13		Form of 3.250% Notes due 2041 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.14		Form of 3.875% Notes due 2042 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.15		Form of 4.100% Notes due 2043 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).

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-Table 46of -Contents

4.16		Form of 5.100% Notes due 2044 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.17		Form of 4.100% Notes due 2045 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.18		Form of 4.750% Notes due 2045 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.19		Form of 4.550% Notes due 2046 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.20		Form of 4.400% Notes due 2047 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.21		Form of 4.050% Notes due 2048 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.22		Form of 4.950% Notes due 2048 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.23		Form of 5.250% Notes due 2050 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.24		Form of 4.500% Notes due 2065 (included in Exhibit 4.4 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.25		Supplemental Indenture No. 16, dated as of February 26, 2025, among FedEx, as issuer, the subsidiary guarantors named therein, U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank Europe DAC, UK Branch, as paying agent. (Filed as Exhibit 4.24 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.26		Form of 0.450% Notes due 2029 (included in Exhibit 4.24 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.27		Form of 1.300% Notes due 2031 (included in Exhibit 4.24 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.28		Form of 0.950% Notes due 2033 (included in Exhibit 4.24 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.29		Registration Rights Agreement, dated February 26, 2025, among FedEx, the subsidiary guarantors named therein and Goldman Sachs & Co. LLC. (Filed as Exhibit 4.28 to the February 24, 2025 Form 8-K, and incorporated herein by reference).
4.30		Succession Agreement, dated as of December 13, 2021, among FedEx, the subsidiary guarantors named therein, The Bank of New York Mellon Trust Company, N.A., and U.S. Bank National Association. (Filed as Exhibit 4.1 to FedEx’s Current Report on Form 8-K dated December 13, 2021 and filed December 16, 2021, and incorporated herein by reference).
4.31		Succession Agreement, dated as of December 13, 2021, among FedEx, the subsidiary guarantors named therein, Computershare Trust Company, N.A., as agent for Wells Fargo Bank, National Association, and U.S. Bank National Association. (Filed as Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated December 13, 2021 and filed December 16, 2021, and incorporated herein by reference).
*10.1		FedEx Corporation Supplemental Short Term Disability Plan, effective January 1, 2025.
*10.2		FedEx Corporation Supplemental Long Term Disability Plan, effective January 1, 2025.
15.1		Letter re: Unaudited Interim Financial Statements.

ITEM 6. EXHIBITS

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Exhibit Number						Description of Exhibit

3.1						Restated Certificate of Incorporation of FedEx (Filed as Exhibit 3.1 to FedEx’s FY25 Second Quarter Report on Form 10-Q, and incorporated herein by reference ).

3.2						Amended and Restated Bylaws of FedEx (Filed as Exhibit 3.1 to FedEx’s Current Report on Form 8-K dated and filed March 11, 2024, and incorporated herein by reference).

4.1						Indenture, dated as of October 23, 2015, among FedEx Corporation, the Guarantors named therein and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association) (as successor trustee to Wells Fargo Bank, National Association), as trustee (Filed as Exhibit 4.1 to FedEx ’s Current Report on Form 8-K dated and filed October 23, 2015 , an d incorporated herein by reference).

4.2						Supplemental Indenture No. 17, dated as of July 30, 2025, among FedEx Corporation, the Guarantors named therein, U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank Europe DAC, UK Branch, as paying agent (Filed as Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed July 30, 2025, and incorporated herein by reference).

4.3						Form of 3.500% Note due 2032 (Includ ed in Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed July 30, 2025, and incorporated herein by reference).

4.4						Form of 4.125% Note due 2037 (Included in Exhibit 4.2 to FedEx’s Current Report on Form 8-K dated and filed July 30, 2025, and incorporated herein by reference).

†10.1						Separation and Release Agreement by and between FedEx Corporation and Sriram Krishnasamy (Filed as Exhibit 10.1 to FedEx’s Current Report on Form 8-K/A dated August 10, 2025 and filed August 12, 2025, and incorporated herein by reference).

*15.1						Letter re: Unaudited Interim Financial Statements.

*22						List of Subsidia ry Guarant ors and Subsidiary Issuers of Gua ranteed Securities .

*31.1						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*32.1						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1						Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”).

104.1						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101.1).

22		List of Guarantor Subsidiaries and Subsidiary Issuers of Guaranteed Securities.
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1		Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline Extensible Business Reporting Language (“Inline XBRL”).
104.1		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101.1).

__________________________________________

*•Filed ~~Management Contracts/Compensatory Plans or Arrangements~~herewith.

-† Management 48contract/compensatory -plan or arrangement.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	~~FedEx Corporation~~	FedEx Corporation
Date: March 20, 2025	/s/ Guy M. Erwin II
Date: September 18, 2025		/s/ Guy M. Erwin II
	~~Guy M. Erwin II~~	Guy M. Erwin II
	~~Corporate Vice President and~~	Corporate Vice President and
	~~Chief Accounting Officer~~	Chief Accounting Officer

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