FEDEX CORP 10-K

ITEM 1. BUSINESS Overview FedEx Corporation (“FedEx”) was incorporated in Delaware on October 2, 1997 to serve as the parent holding company and provide strategic direction to the FedEx portfolio of companies. FedEx provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce, and business services, offering integrated business solutions utilizing its flexible, efficient, and intelligent global network. Our website is located at fedex.com. Detailed information about our services, solutions, and corporate responsibility initiatives can be found on our website. In addition, we make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all exhibits and amendments to such reports available, free of charge, through our website, as soon as reasonably practicable on the day they are filed with or furnished to the SEC. The Investor Relations page of our website, investors.fedex.com, contains a significant amount of information about FedEx, including our SEC filings and financial and other information for investors. The information that we post on the Investor Relations page of our website could be deemed to be material information. We encourage investors, the media, and others interested in FedEx to visit this website from time to time, as information is updated and new information is posted. The information on our website, however, is not incorporated by reference in, and does not form part of, this Annual Report. Change in Fiscal Year End Effective June 1, 2026, we changed our fiscal year end from May 31 to December 31. As a result, we will report operating results covering the seven-month transition period from June 1, 2026, through December 31, 2026 (the “Transition Period”), in a Transition Report on Form 10-K. Following the Transition Period, we will report our operating results on a calendar-year basis, beginning with the fiscal year ending December 31, 2027. Except as otherwise specified, any reference to a year in this Annual Report indicates our fiscal year ended May 31, 2026 or ended May 31 of the year referenced, and comparisons are to the corresponding period of the prior year. Spin-Off and New Reportable Segments In December 2024, we announced that FedEx’s Board of Directors decided to pursue a full separation of FedEx’s less-than-truckload freight transportation services business conducted through FedEx Freight, Inc. (“FedEx Freight”). The FedEx Freight business also included FedEx Custom Critical, Inc. (“FedEx Custom Critical”), LTL Select, and other operations historically included within our FedEx Freight reporting segment. On May 13, 2026, the FedEx Board of Directors declared a pro rata dividend of 80.1% of the outstanding shares of common stock of FedEx Freight Holding Company, Inc. (“FedEx Freight Holding”) to FedEx’s stockholders of record as of the close of business on May 15, 2026 (the “Record Date”) to achieve the separation (the “Spin-Off”). On June 1, 2026, FedEx stockholders received one share of FedEx Freight common stock for every two shares of FedEx common stock held as of the Record Date. FedEx retained 19.9% of the outstanding shares of FedEx Freight common stock. As a result of the Spin-Off, effective June 1, 2026, FedEx will no longer consolidate the FedEx Freight business and FedEx Freight is no longer a reportable segment. Prior to the Spin-Off, our reportable segments were 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. For financial information concerning our reportable segments in place prior to the Spin-Off, refer to “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” and “Item 8. Financial Statements and Supplementary Data” of this Annual Report. Part I of this Annual Report contains certain references to the financial and operational performance of our reportable segments in place prior to the Spin-Off. Additional information regarding our reportable segments in place during 2026 and 2025 can be found in “Item 1. Business” and “Item 2. Properties” of our Annual Report for the year ended May 31, 2025. Following the Spin-Off and beginning the first quarter of the Transition Period, we realigned our internal reporting and management structure, resulting in the identification of two new reportable segments: Express U.S. Domestic and Express International. Prior to this change, these two segments comprised the Federal Express reportable segment. In addition, FedEx Logistics, Inc. (“FedEx Logistics”), which provides customs brokerage and global ocean and air freight forwarding, was moved from “Corporate, other, and eliminations” to Express International. These changes reflect the realignment of our organizational structure and reporting regularly provided to our chief operating decision maker to assess performance and allocate resources. These changes had no impact on our consolidated results of operations or financial position. For more information about our new reportable segments effective June 1, 2026, please refer to the “Business Segments” below. Strategy The collective FedEx brand gives us our competitive edge. Further, our strategy allows us to manage our business as a portfolio, in the long-term best interest of the enterprise. As a result, we base decisions on capital investment and service additions or enhancements -2- upon achieving the highest overall long-term return on invested capital for our business as a whole. We focus on making appropriate investments in the technology and assets necessary to optimize our long-term earnings performance and cash flow. Our business strategy also provides flexibility in structuring our network to align with varying macroeconomic conditions and customer demand for the market segments in which the customer operates, allowing us to leverage and manage change. Volatility, uncertainty, and innovation have become the norms in the global transportation market, and we are able to use our flexibility to accommodate changing conditions in the global economy. For more than 50 years, we have been building networks that have created a differentiated and unmatched portfolio of services while continuously evolving to meet the changing needs of our customers and the market by connecting people and possibilities. We are shifting from a collection of separate but powerful operations to one integrated, flexible, efficient, and intelligent network that delivers better service, runs on a modern technology stack and has a structurally lower cost to serve. We continue to evolve to improve our operational efficiency, enhance profitability, and build a simplified experience to better serve our customers. In 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 Corporation (“Federal Express”), becoming a single company operating a unified, fully integrated air-ground express network under the respected FedEx brand. In 2026, we continued our network transformation . Through Network 2.0, we continue to transform our surface network in the U.S. and Canada by modernizing and consolidating our sortation facilities and equipment, reducing pickup-and-delivery routes, and optimizing our enterprise linehaul network by moving beyond discrete collaboration to an end-to-end optimized network. Network 2.0 has been fully implemented in Canada and we expect to complete the U.S. implementation by the end of calendar year 2027. With Tricolor, we are redesigning our international air network by deploying our aircraft strategically to optimize asset utilization and enable a focus on growth in the premium global freight market. Internationally, we are focused on leveraging tools and best practices from our U.S. operations to transform our international operations by scaling to higher-value international mix, reengineering the network, and driving end-to-end process efficiencies. See “Business Segments” below, “ Item 1A. Risk Factors ,” and “ Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition ” of this Annual Report for more information on our transformation programs. Our digital transformation is underpinned by our digital backbone and artificial intelligence (“AI”) capabilities, enabling intelligent orchestration, standardization, and digitized and AI-enabled workflows that drive faster response, fewer exceptions, and lower our cost to serve. Our digital transformation is focused on efficiency, differentiation, and new value creation. The size and scale of our global network gives us key insights into global supply chains and trends. This foundation provides an immense amount of data we can use to build better insights, improve the customer experience, and differentiate our service offerings. “Safety Above All” is the first and foremost value in every aspect of our business. We are committed to making our workplaces and communities safer for our team members, customers, and the public. This philosophy is embedded in our day-to-day work through rigorous policies, continual education and engagement, and investments in technology designed to prevent accidents. Through our global transportation, information technology, and retail networks, we help to facilitate an ongoing and unprecedented expansion of customer access — to goods, services, and information. We believe it would be extremely difficult, costly, and time-consuming to replicate our global network, which reflects decades of investment, innovation, and expertise, includes the world’s largest all-cargo air fleet, and connects more than 99% of the world’s gross domestic product. We continue to position our company and team members to facilitate and capitalize on this access and to achieve stronger long-term growth, productivity, and profitability. Business Segments Effective June 1, 2026, we have two reporting segments: Express U.S. Domestic and Express International. Our remaining businesses are reported as Corporate, other, and eliminations. Express U.S. Domestic and Express International are collectively referred to as Federal Express. Federal Express Federal Express pioneered the express transportation industry over 50 years ago in 1973 and remains the industry leader today, providing a range of rapid, reliable, time- and day-definite delivery services to more than 220 countries and territories through an integrated air-ground express network. As of May 31, 2026, Federal Express employed approximately 452,000 employees and had approximately 84,000 d rop-off locations (including FedEx Office stores and FedEx OnSite locations, such as ove r 15,000 Walgr eens and Dollar General stores), 700 aircraft, and over 180,000 motorized vehicles in its global network. Federal Express contracts with approximately 5,300 independent small businesses to conduct certain linehaul and pickup-and-delivery operations. Federal Express also provides cross-border enablement and -3- technology solutions and e-commerce transportation solutions. As of May 31, 2026, Federal Express employed approximately 233,000 permanent full-time and approximately 219,000 permanent part-time employees. The pilots at Federal Express, who are a small number of its total employees, are represented by the Air Line Pilots Association, International (“ALPA”) and are employed under a newly ratified collective bargaining agreement (“CBA”). The new CBA was ratified by Federal Express pilots in a vote concluded on June 9, 2026, and is the product of several years of bargaining under the Railway Labor Act of 1926, as amended (“RLA”), including mediation by the National Mediation Board (the U.S. governmental agency that oversees labor agreements for entities covered by the RLA). The new CBA took effect June 29, 2026, and is scheduled to become amendable in December 2030. See Note 20 of the consolidated financial statements included in “ Item 8. Financial Statements and Supplementary Data ” of this Annual Report for more information. In addition to our pilots, certain of Federal Express’s non-U.S. employees are unionized. FedEx believes its employee relations are excellent. See “ Item 1A. Risk Factors ” of this Annual Report for more information. Express U.S. Domestic Segment Express U.S. Domestic offers a wide range of U.S. domestic shipping services for packages and freight. We offer three overnight package delivery services (FedEx First Overnight, FedEx Priority Overnight, and FedEx Standard Overnight) and three deferred package delivery services (FedEx 2Day, FedEx 2Day AM, and FedEx Express Saver). FedEx SameDay service is available 365 days a year throughout all 50 states for urgent shipments up to 150 pounds. We also offer express overnight and deferred freight services to handle the needs of the time-definite freight market. Express U.S. Domestic is also a leading provider of day-definite business and residential delivery services for packages weighing up to 150 pounds through our FedEx Ground Commercial and FedEx Home Delivery services. Our service reaches 100% of the continental U.S. population. We offer day-definite delivery to 99% of the U.S. population on Saturdays and to nearly two-thirds of the U.S. population on Sundays. We also offer an economy service that is available for the consolidation and delivery of high volumes of low-weight, less time-sensitive business-to-consumer packages to any residential address in the U.S. Express U.S. Domestic’s largest sorting facility, located in Memphis, Tennessee, serves as the center of our multiple hub-and-spoke system and worldwide air network. A second national air hub facility is located in Indianapolis, Indiana. We are making investments over multiple years in our facilities to expand and modernize our Memphis hub and modernize our Indianapolis hub. In addition to these national air hubs, Express U.S. Domestic operates regional air hubs in: Fort Worth, Texas; Newark, New York; and Oakland, California and major metropolitan sorting facilities at airports in: Chicago, Illinois; Los Angeles, California; and Atlanta, Georgia. Express U.S. Domestic also operates a highly flexible network of approximately 1,200 facilities, as of May 31, 2026, that support its surface operations. Through Network 2.0, the multi-year effort to improve the efficiency with which we pick up, transport, and deliver packages in the U.S., these operations are being consolidated. As of May 31, 2026, we have implemented Network 2.0 at approximately 360 locations in the U.S. Under Network 2.0, we utilize both employee couriers and service providers in surface operations using a market-by-market approach. See “ Item 1A. Risk Factors ” and “ Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition ” of this Annual Report for more information on Network 2.0. Express U.S. Domestic continues to maximize the use of existing surface facilities through Network 2.0. Many of these facilities utilize advanced automated unloading and sorting technology to streamline the handling of millions of packages daily. This technology includes a yard management system in many facilities which interacts with GPS tags on trailers to automatically notify the control center when a trailer arrives and departs. Using overhead laser and six-sided camera-based bar code scan technology, hub conveyors electronically guide packages to their appropriate destination chute where they are loaded for transport to their respective destination stations for local delivery. Express U.S. Domestic is also implementing dynamic scheduling tools at many surface facilities to match sort staffing with volumes and is introducing capabilities to allow certain packages to bypass station sortation and proceed directly to vehicles, which helps to maximize station capacity. In addition, dock modernization efforts, including a network operating plan that uses machine learning and algorithms to develop more detailed and accurate volume forecasts, are enhancing productivity at these facilities in furtherance of our transformation initiatives. We are also testing autonomous, driverless technologies in the handling of large, non-conveyable packages, as well as robotic product sortation systems to sort small packages. Express U.S. Domestic offers service providers advanced route optimization technology that includes near real-time data that service providers may use to plan efficient delivery routes and vehicle mix. To promote safe operations, service providers contracting with us agree to use certain safety-related vehicle technologies and satisfy certain driver standards. Additionally, we deploy software systems and internet-based applications to offer customers new ways to connect internal package data with external delivery information. We provide shipment tracing and proof-of-delivery signature functionality through the FedEx website, fedex.com. For additional information regarding FedEx e-commerce tools and solutions, including FedEx Delivery Manager and FedEx Returns Technology, see “Customer-Driven Technology — E-Commerce and Digital Solutions” below. -4- Express International Segment Express International offers a wide range of shipping services for delivery of packages and freight, connecting markets that generate more than 99% of the world’s gross domestic product. Our package services include a money-back guarantee. Our unmatched air route authorities and extensive transportation infrastructure, combined with leading-edge information technologies, make it the world’s largest express transportation company. Express International package delivery services are available to more than 220 countries and territories, with a variety of time-definite services to meet distinct customer needs. Our FedEx International Economy service provides time-definite delivery typically in two to five business days. Our FedEx International First service provides time-definite delivery to select postal codes in more than 25 countries and territories, with delivery to select U.S. ZIP Codes as early as 8:00 a.m. from more than 190 countries, delivery by 10:00 a.m. in one business day from the U.S. to Canada, and delivery by 11:00 a.m. in one business day from the U.S. to Mexico. Our FedEx International Priority service provides end-of-day time-definite delivery in one to three business days to more than 220 countries and territories, and our FedEx International Priority Express service provides midday time-definite delivery in one to three business days to more than 30 countries and territories. We also offer domestic pickup-and-delivery services within certain non-U.S. countries, including Canada, Australia, France, the United Kingdom, Italy, Mexico, Germany, Poland, Chile, China, Brazil, India, and in Southern Africa. In addition, we offer comprehensive international express and deferred freight services, real-time tracking, and advanced customs clearance. Our FedEx International Connect Plus service, an e-commerce service currently available from over 70 origin countries to over 190 destination countries and territories, provides day-definite delivery typically within two to five business days. FedEx Logistics provides international trade services, specializing in customs brokerage, global ocean and air freight forwarding, and managed transportation. We also provide customs clearance services at our major U.S. air hub facilities and border customs clearance for U.S. surface operations, as well as global door-to-door air charter solutions. FedEx Logistics offers customized trade solutions that enable improved compliance practices through FedEx Trade Solutions. FedEx Logistics plays a key role for Express International, offering a comprehensive suite of integrated logistics solutions, providing air and ocean cargo transportation, specialty transportation, customs brokerage, and trade management tools and data, as well as third party logistics. FedEx Logistics has the unique ability to leverage the power of the FedEx transportation networks as well as its global network of service providers. Pricing Federal Express periodically publishes updates to the list prices for the majority of its services in its Service Guides. In general, shipping rates are based on the service selected, origin, destination, weight, size, any ancillary service charges, and whether the customer charged the shipment to a FedEx account. On January 5, 2026, a 5.9% average list price increase was implemented for services. List prices also increased for contractual services at this time. During times of elevated volumes, high demand for capacity, and increased operating costs across our network, Federal Express will implement Demand surcharges. Demand surcharges are determined for each market based on regular assessments of shipment volume and capacity within our network. Federal Express has an indexed fuel surcharge for Express U.S. Domestic shipments, as well as Express International U.S. outbound and internationally originating shipments, where permitted under law and contractually possible, which is adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price from roughly two weeks prior to the week in which it is assessed. Effective June 1, 2026, the tables used to determine fuel surcharges for Express U.S. Domestic services were updated. The tables used to determine fuel surcharges for Express International services were updated in May 2026. 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 ” of this Annual Report for more information. Retail Access Network FedEx Office offers retail access to Federal Express shipping services at all of its retail locations. Federal Express also has alliances with certain other retailers to provide in-store drop-off sites, including at more than 15,000 Walgreens and Dollar General stores. Our unstaffed FedEx Drop Boxes provide customers the opportunity to drop off packages in office buildings, shopping centers, and corporate or industrial parks. Federal Express has a total of approximately 84,000 drop-off locations. Fuel Supplies and Costs During 2026, Federal Express purchased jet fuel from various suppliers under contracts that vary in length and which provide for estimated amounts of fuel to be delivered. The fuel represented by these contracts is purchased at market prices. We do not have any jet fuel hedging contracts. -5- The following table sets forth Federal Express’s costs for jet fuel and its percentage of FedEx Corporation consolidated revenues for the last five fiscal years: Fiscal Year Total Jet Fuel Costs (in millions) Percentage of Consolidated Revenue 2026 $ 3,050 3.2 % 2025 2,832 3.2 2024 3,598 4.1 2023 4,515 5.0 2022 3,867 4.1 Most of Federal Express’s vehicle fuel needs are satisfied by retail purchases with various discounts. Corporate, Other, and Eliminations The “Corporate, other, and eliminations” segment is comprised of FedEx Dataworks, Inc. (“FedEx Dataworks”), FedEx Office and Print Services, Inc. (“FedEx Office”), and FedEx Supply Chain Distribution System, Inc. (“FedEx Supply Chain”). FedEx Dataworks, Inc. (“FedEx Dataworks”) is focused on leveraging the power of our network and establishing our data estate to serve as an intelligence engine for global value chains, connecting fragmented systems and enhancing efficiency, decisioning, and providing context for our customers’ supply chains. FedEx Office and Print Services, Inc. (“FedEx Office”) provides document and business services and retail access to our package transportation businesses and FedEx Supply Chain Distribution System, Inc. (“FedEx Supply Chain”) offers integrated supply chain management solutions. FedEx Dataworks, FedEx Office, and FedEx Supply Chain are included in “Corporate, other, and eliminations” in our segment reporting. For more information about FedEx Dataworks, FedEx Office, and FedEx Supply Chain, please see “Corporate, other, and eliminations” under “Business Segments” below. FedEx Dataworks The FedEx Dataworks operating segment is focused on leveraging the power of our network and establishing our data estate to serve as an intelligence engine for global value chains, connecting fragmented systems and enhancing efficiency, decisioning, and context for our customers’ supply chains. FedEx Dataworks is centralizing data onto a single enterprise platform to create a unified neural network. By adopting this single platform — where machine learning models are reusable and self-learning — we are able to solve problems and deliver value to stakeholders at speed, scale, and with the right economics. This system serves as an adaptive decision engine, connecting planning and execution into a continuous loop that learns from disruption and adjusts in real time. By bridging the digital and physical worlds, our insights move beyond passive alerts to automate resolutions, turning fragmented data into coordinated action for our customers. FedEx Dataworks is based in Memphis, Tennessee. As of May 31, 2026, FedEx Dataworks had approximately 200 employees. FedEx Office FedEx Office operates adjacent to the strategy for all on-site, owned, and third-party retail channel locations, providing convenient access to shipping expertise with reliable service. The FedEx Office brick-and-mortar network features retail stores, FedEx Office locations inside Walmart stores, manufacturing plants, and on-site business centers at colleges and universities, hotels, convention centers, corporate campuses, and healthcare campuses. Many of these locations are open later in the evenings to accommodate urgent printing projects and delivery drop-offs. FedEx Office offers a suite of printing and shipping management solutions that are flexible and scalable, allowing customers to meet their unique printing and shipping needs. The network provides an adaptable cost model helping to save time, labor, and overhead by freeing up resources and avoiding fixed costs associated with large-scale printing and e-commerce parcel volumes. This is especially valuable to our enterprise customers looking to outsource their print supply chain. Services include digital printing, professional finishing, document creation, design solutions, direct mail, signs and graphics, custom-branded boxes, copying, computer rental, free Wi-Fi, corporate print solutions, shredding, expedited U.S. passport processing and renewal through a collaboration with a registered U.S. passport agency, and fully digital notarization services through FedEx Office Online Notary. With the FedEx Office Print On Demand solution, customers can use their laptops or mobile devices to design their print needs or access their personal cloud accounts, and print directly to any FedEx Office location in the U.S., or have their order delivered right to their door. Customers also have the flexibility of using FedEx Office’s Print & Go solutions to print at self-serve locations from USBs, the cloud, or through email. Print & Go solutions allow customers to access files using popular cloud providers Google Drive™, Box, Microsoft OneDrive ® , and from FedEx Office’s own My Online Documents, making printing easy. -6- FedEx Office has prioritized e-commerce and digital offerings as a growth opportunity for the enterprise/large, medium, and small business customers we serve. FedEx Office has partnered with a content and creative design platform to form a digital design-to-print marketplace offering millions of images and illustrations, an extensive library of templates, and a simple drag-and-drop interface to create custom business materials from fedex.com on any device, with next-day printing on many requests available at FedEx Office stores. Additionally, FedEx Office has partnered with a leading marketing solutions company to introduce an online branded promotional products marketplace that allows businesses to customize and purchase high-quality promotional products. FedEx Office has also made investments in new machines and technology, enhancing capabilities in narrow format color, grand format, large format, color management, enhanced finishing, and other technologies. FedEx Office provides convenient access to the full range of Federal Express shipping services for infrequent shippers and FedEx account holders. Customers may have their Federal Express packages delivered to any FedEx Office customer-facing location nationwide through the Hold at FedEx Location service, free of charge, and may redirect packages to these locations through Redirect to Hold or AutoRedirect to Hold services. FedEx Office offers the Ship and Go kiosk, a convenient self-serve shipping kiosk in approximately 1,500 locations. The Ship and Go kiosk allows customers to generate a label via a mobile label or QR code and drop off packages in a secure drop bin for a seamless and efficient customer experience. FedEx Office facilitates e-commerce and returns through FedEx Returns Technology, which allows for in-store printing of return shipping labels. Through FedEx Consolidated Returns, shoppers who purchased from participating merchants can drop off the items they wish to return with no box or label required at a FedEx Office location. For information regarding FedEx Consolidated Returns, see “Customer-Driven Technology — E-Commerce and Digital Solutions.” FedEx Office also offers packing services, and packing supplies and boxes are included in its retail offerings. By allowing customers to have items professionally packed by specially trained FedEx Office team members and then shipped, FedEx Office offers a complete “pack-and-ship” solution. FedEx Office also offers FedEx Pack Plus, which includes custom box building capabilities and techniques; a robust assortment of specialty boxes; and additional packing supplies, equipment, and tools to serve our customers’ needs. As of May 31, 2026, FedEx Office, which is based in Plano, Texas, operated approximately 2,000 customer-facing stores and had approximately 12,000 employees. FedEx Supply Chain FedEx Supply Chain is a supply chain solutions provider specializing in Product Lifecycle Logistics for technology, retail, consumer and industrial goods, and healthcare industries. With nearly 10,000 employees at over 150 facilities as of May 31, 2026, FedEx Supply Chain provides a comprehensive range of integrated logistics services to enable growth, minimize cost, mitigate supply chain risk, and improve customer services. Service offerings include inbound logistics, warehousing and distribution, fulfillment, contract packaging and product configuration, systems integration, returns process and disposition, test, repair, refurbishment, and product liquidation. FedEx Supply Chain has a small number of employees who are members of unions. FedEx Supply Chain’s FedEx Fulfillment e-commerce solution helps small and medium-sized businesses fulfill orders from multiple channels, including websites and online marketplaces, and manage inventory for their retail stores. The FedEx Fulfillment platform is designed to be an easy-to-use and all-in-one logistics solution through which customers have complete visibility into their products, giving them an easy way to track items, manage inventory, analyze trends, and make more informed decisions by better understanding shoppers’ spending behaviors. On July 1, 2026, FedEx announced that it would sell its FedEx Supply Chain business to CMA CGM Group for $1.4 billion as part of a strategic portfolio streamlining effort. The transaction is expected to close in the second half of calendar year 2026. Upon completion of the sale, FedEx will no longer consolidate FedEx Supply Chain and FedEx Supply Chain will no longer be included in “Corporate, other, and eliminations” in our segment reporting. Competition As described in “ Item 1A. Risk Factors ” of this Annual Report, the U.S. domestic and international package and the U.S. domestic freight and international freight markets are both highly competitive and sensitive to price and service, especially in periods of little or no macroeconomic growth. The ability to compete effectively depends upon price, frequency, reliability, capacity and speed of scheduled service, ability to track packages, extent of geographic coverage, innovative service offerings, and the fit within the customer’s overall supply chain. Competitors for Express U.S. Domestic include other package delivery concerns, principally United Parcel Service, Inc. (“UPS”), passenger airlines offering express package services, regional delivery companies, air freight forwarders, and the USPS. Express International competitors are principally DHL, UPS, DPD (a subsidiary of France’s La Poste’s GeoPost), General Logistics Systems (a Royal Mail-owned parcel delivery group), foreign postal authorities, passenger airlines, air freight forwarders, regional carriers, and all-cargo airlines. We also compete with startup companies that combine technology with crowdsourcing to focus on local market needs. In addition, some high-volume package shippers, such as Amazon.com, are developing and implementing in-house delivery capabilities and utilizing independent contractors and delivery service providers for deliveries, and may be considered competitors in -7- addition to customers. For example, Amazon.com has established a network of hubs, aircraft, and vehicles, recently began offering an LTL freight service for inbound shipments to its distribution facilities, and has offered its internal delivery capabilities broadly to third parties. Many of Express International’s competitors are government-owned, -controlled, or -subsidized carriers, which may have greater resources, lower costs, less profit sensitivity, and more favorable operating conditions than Express International. For more information, see “ Item 1A. Risk Factors ” of this Annual Report. Customer-Driven Technology FedEx is a world leader in technology, and late FedEx founder and long-time Chairman and Chief Executive Officer Frederick W. Smith’s vision that “the information about a package is as important as the delivery of the package itself” remains at the core of our comprehensive technology strategy. We strive to build technology solutions that will solve our customers’ business problems with simplicity, convenience, speed, and reliability. Additionally, FedEx stands at the nexus of digital and physical networks, a crucial intersection for the success of e-commerce and time-sensitive deliveries. We continue to expand our e-commerce convenience network and explore innovative alternatives to help customers and businesses deliver. We have substantially advanced our major information technology transition from traditional mainframe computing to cloud-based systems, delivering significant benefits in flexibility, security, speed to market, and resiliency. See “FedEx Dataworks” above for more information on the solutions we are creating to enhance the end-to-end experience of our customers by making supply chains smarter for everyone. Shipping Management and Precision Tracking The fedex.com website is widely recognized for its speed, ease of use, and customer-focused features. The advanced tracking capability within FedEx Tracking provides customers with a consolidated view of inbound and outbound shipments. Additionally, an advanced machine learning and artificial intelligence model developed by FedEx has enhanced tracking capabilities on fedex.com, delivering greater estimated delivery date accuracy, including updates for early or delayed shipments. FedEx Virtual Assistant on fedex.com is an artificial-intelligence-enabled service that provides answers to customer shipping questions, allowing our customer service representatives and sales professionals to focus on higher-value customer interactions. During 2026, we launched confidence-based notification optimization, leveraging advanced analytics to further improve the accuracy and reliability of the estimated delivery dates and estimated delivery time windows provided to customers. SenseAware Mobile, a FedEx innovation currently available in over 120 countries worldwide, allows customers to stay connected to their critical shipments by providing real-time updates regarding current location, temperature, relative humidity, barometric pressure readings, light exposure, shock events, tilt beyond a certain angle, and healthcare subsampling. Additionally, FedEx SenseAware ID is a lightweight sensor-based logistics device that delivers a new level of precision tracking. The enhanced location visibility provided by FedEx SenseAware ID is creating opportunities for FedEx customers to reimagine their supply chains through real-time updates on a package’s location within the Express U.S. Domestic network. FedEx Mobile is a suite of solutions including the FedEx mobile application, FedEx mobile website, and text messaging. The FedEx Mobile app provides convenience for recipients to track packages and access FedEx Delivery Manager to customize home deliveries. Shippers can easily get rates and estimated delivery times and swiftly create a shipping label. All users can quickly find the nearest FedEx location for Hold at Location or drop-off. It is available on Android and Apple devices. The FedEx Mobile app is available in more than 220 countries and territories and 40 languages. FedEx Surround is a visibility platform that allows customers to view and manage shipments in one place. The tool provides global visibility into shipments with package-level insights in near real-time. Advanced features include predictive delay notifications, weather advisories, and customizable views and reports and intervention capability. FedEx also offers Picture Proof of Delivery for express and ground residential deliveries in the U.S. and Canada that are released without a signature. The capability has since expanded to over 60 c ountries and territories globally. Additionally, our FedEx Ship Manager suite of solutions has offered a wide range of options to help our customers manage their parcel and freight shipping and associated processes. E-Commerce and Digital Solutions FedEx Delivery Manager allows our U.S. residential customers to customize home deliveries to fit their schedule by providing a range of options to schedule dates, locations, and times of delivery. Additionally, FedEx Returns Technology, a comprehensive solution for returns management, provides high-volume merchants and e-tailers complete visibility into returns and an easy way to track shipments, manage inventory, analyze returns trends, and make more informed decisions based on shoppers’ returns behaviors. In 2025, FedEx announced the launch of FedEx Easy Returns, a cost-effective way to combine customer returns into one shipment. FedEx Rewards allows businesses in the U.S. to earn rewards for their loyalty in shipping and printing with FedEx. In January 2026, we announced FedEx Tracking+ and FedEx Returns+, AI-powered, white-labeled post-purchase solutions designed for enterprise customers and embedded directly within merchants’ digital channels. These solutions provide real-time delivery and -8- returns visibility, automate responses to common customer inquiries, enable proactive and personalized customer communications, and deliver analytics to help businesses identify operational issues and improve performance. By integrating these capabilities into the post-purchase experience, these solutions help customers strengthen brand engagement, reduce support demand, and enhance overall customer satisfaction. We are scaling adoption in the United States and evaluating expansion opportunities internationally and across additional customer segments. The FedEx retail convenience network also utilizes third-party retailers to receive and hold packages for FedEx customers. The U.S. retail convenience network has grown to include over 15,000 Walgreens and Dollar General stores in addition to our approximately 2,000 FedEx Office locations and over 500 FedEx Ship Centers. In addition to allowing for an easy returns and drop-off experience for shoppers, the retail convenience network is well positioned to serve as a “buy online, pickup in store” network for small and medium merchants without brick-and-mortar locations. We have also added FedEx Returns Technology at Walgreens locations, which allows for in-store printing of return shipping labels and eliminates the need to include a return label in every package. We have expanded e-commerce delivery options for retailers with FedEx Extra Hours, a service that enables participating retailers to fulfill e-commerce orders into the evening and receive late pickups by Express U.S. Domestic, with next-day local delivery and two-day shipping to any address in the continental U.S. FedEx Extra Hours, which is currently available to select customers, allows retailers to extend evening order cutoff times by five to eight hours, with some as late as midnight, depending on their current order fulfillment process. In March 2026, we launched FedEx SameDay Local, a technology-enabled delivery solution that expands our last-mile capabilities and supports increasing demand for faster and more flexible delivery options. This offering integrates into retailer checkout experiences, enabling customers to provide greater choice and convenience to end consumers while benefiting from real-time visibility and delivery updates. FedEx SameDay Local supports evolving customer expectations and strengthens our ability to participate in same-day and on-demand delivery opportunities. In May 2026, we introduced an AI-driven assistant within the FedEx Developer Portal to help developers more efficiently access documentation, receive real-time technical guidance, and accelerate integrations with FedEx digital services. Also in 2026, we announced separate strategic partnerships with ServiceNow and Dun & Bradstreet to provide customers with more intelligent supply chain solutions powered by FedEx Dataworks. These collaborations include AI-powered workflows designed to improve supply chain visibility, exception management, and procurement decision-making, as well as predictive insights that help identify supplier risk and retail supply and demand trends. See “The Environment” below for information about our FedEx Sustainability Insights tool, which gives customers and suppliers access to estimated CO2e emission data associated with FedEx shipments. Autonomous Solutions FedEx continues to explore the use of autonomous delivery technology within its operations. We continued our ongoing pilot program with Aurora Innovation, Inc. (“Aurora”) and PACCAR Inc. (“PACCAR”) to test Aurora’s autonomous driving technology in PACCAR autonomous vehicle platform-equipped trucks within FedEx linehaul operations. Throughout the pilot, we have tested multiple lanes and trailer configurations to evaluate performance across a range of real-world operating conditions. Marketing The FedEx brand name symbolizes outstanding service, reliability, and speed. Emphasis is continually placed on promoting and protecting the FedEx brand, one of our most important assets. As a result, FedEx is one of the most widely recognized brands in the world. In addition to television, print, and digital advertising, we promote the FedEx brand through sponsorships and special events. For example, FedEx sponsors: • FedEx is the “Official Delivery Service Sponsor” and “Official Office Services Provider” of the NFL, through which we conduct events and other activities to promote the FedEx brand, such as the “FedEx Air & Ground” NFL Players of the Week and Players of the Year Awards. • The Union of European Football Associations (UEFA) Champions League, which is broadcast in over 200 countries and territories worldwide. • The season-long FedExCup competition on the PGA Tour, and the FedEx St. Jude Championship, a PGA Tour event that has raised millions of dollars for St. Jude Children’s Research Hospital and is one of three annual FedExCup playoff events. • FedExForum in Memphis, Tennessee, a multipurpose sports and entertainment arena that serves as the home arena for the NBA’s Memphis Grizzlies and the University of Memphis men’s basketball team. -9- Information Security FedEx has a team of highly qualified professionals dedicated to securing information about our customers’ shipments and protecting our customers’, vendors’, and employees’ privacy, and we strive to provide a safe, secure online environment for our customers. We are committed to compliance with applicable information security laws, regulations, and industry standards. For more information, see “ Item 1A. Risk Factors ” and “ Item 1C. Cybersecurity ” of this Annual Report. Seasonality For information on the seasonality of our business, see the “Results of Operations and Outlook — Consolidated Results — Seasonality of Business” section of “ Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition ” of this Annual Report. Trademarks We own numerous trademarks and intellectual property rights relating to the “FedEx” trademark. Those trademarks, service marks, and trade names are essential to our worldwide business, and include FedEx, FedEx Express, FedEx Ground, FedEx Office, FedEx Logistics, FedEx Dataworks, and FedEx Supply Chain. We also own other trademarks which we license for use in other lines of business. In connection with the Spin-Off, we licensed the use of FedEx Freight and FedEx Custom Critical to FedEx Freight Holding. FedEx takes active measures to enforce its intellectual property rights where appropriate. Regulation Air . Under the Federal Aviation Act of 1958, as amended (the “Federal Aviation Act”), both the U.S. Department of Transportation (“DOT”) and the Federal Aviation Administration (“FAA”) exercise regulatory authority over FedEx’s air operations. The FAA’s regulatory authority relates primarily to operational aspects of air transportation, including aircraft standards and maintenance, as well as personnel and ground facilities, which may from time to time affect the ability of FedEx to operate its aircraft in the most efficient manner. FedEx holds an air carrier certificate granted by the FAA pursuant to Part 119 of the federal aviation regulations. This certificate is of unlimited duration and remains in effect so long as FedEx maintains its standards of safety and meets the operational requirements of the regulations. The DOT’s authority relates primarily to economic aspects of air transportation. The DOT’s jurisdiction extends to aviation route authority and to other regulatory matters, including the transfer of route authority between carriers. FedEx holds various certificates issued by the DOT authorizing the company to engage in U.S. and international air transportation of property and mail on a worldwide basis. These certificates remain in effect as we maintain our economic fitness to perform all-cargo services following the one FedEx consolidation. Under the Aviation and Transportation Security Act of 2001, as amended, the Transportation Security Administration (“TSA”), an agency within the Department of Homeland Security, has responsibility for aviation security. The TSA requires FedEx to comply with a Full All-Cargo Aircraft Operator Standard Security Plan, which contains evolving and strict security requirements. These requirements are not static, but change periodically as the result of regulatory and legislative requirements, imposing additional security costs and creating a level of uncertainty for our operations. It is reasonably possible that these rules or other future security requirements could impose material costs on us. FedEx participates in the Civil Reserve Air Fleet (“CRAF”) program. Under this program, the U.S. Department of Defense may requisition for military use certain of FedEx’s wide-bodied aircraft in the event of a declared need, including a national emergency. FedEx would be compensated for the operation of any aircraft requisitioned under the CRAF program at standard contract rates established each year in the normal course of awarding contracts. Through its participation in the CRAF program, FedEx is entitled to bid on peacetime military cargo charter business. FedEx, together with a consortium of other carriers, currently contracts with the U.S. government for such charter flights. See “ Item 1A. Risk Factors ” of this Annual Report for discussion of regulations related to pilots, including the proposed pilot flight and duty time regulations, that could affect our business. Ground . The ground transportation performed by employees of FedEx and by service providers is integral to its air transportation services. The enactment of the Federal Aviation Administration Authorization Act of 1994 abrogated the authority of states to regulate the rates, routes, or services of intermodal all-cargo air carriers and most motor carriers. States may now only exercise jurisdiction over safety and insurance. FedEx is registered in those states that require registration. The interstate operations of FedEx that conduct certain linehaul and pick-up and delivery operations are currently regulated by the DOT and the Federal Motor Carrier Safety Administration, which retain oversight authority over federally regulated motor carriers. Federal law preempts the regulation by the states of rates, routes, and services in interstate freight transportation. Like other interstate -10- motor carriers, our operations are subject to certain DOT safety requirements governing interstate operations. In addition, vehicle weight and dimensions remain subject to both federal and state regulations. International . FedEx’s international authority permits it to carry cargo and mail from points in its U.S. route system to numerous points throughout the world. The DOT regulates international routes and practices and is authorized to investigate and take action against discriminatory treatment of U.S. air carriers abroad. The right of a U.S. carrier to serve foreign points is subject to the DOT’s approval and generally requires a bilateral agreement between the U.S. and the foreign government. In addition, the carrier must then be granted the permission of such foreign government to provide specific flights and services. The regulatory environment for global aviation rights may from time to time impair the ability of FedEx to operate its air network in the most efficient manner, and efficient operations often utilize open skies provisions of aviation agreements. Additionally, global air cargo carriers, such as FedEx, are subject to current and potential additional aviation security regulation by U.S. and foreign governments. Our operations outside of the U.S., such as FedEx’s international domestic operations, are also subject to current and potential regulations, including certain postal regulations and licensing requirements, that restrict, make difficult, and sometimes prohibit, the ability of foreign-owned companies such as FedEx to compete effectively in parts of the international domestic transportation and logistics market. Environmental Noise: The FAA, with the assistance of the U.S. Environmental Protection Agency (“EPA”), is authorized to establish standards governing aircraft noise. FedEx’s aircraft fleet is in compliance with current FAA noise standards. Although the Airport Noise and Capacity Act of 1990 established a National Noise Policy that enables certain airport operators to implement noise abatement programs, it created an opportunity for FedEx to plan for noise reduction and better respond to local noise constraints. Additionally, certain U.S. airport operators have implemented local noise regulations, and certain foreign jurisdictions impose noise-based limitations on airline operations. Neither the National Noise Policy nor any domestic or foreign local noise regulations have a material effect in any of FedEx’s significant markets. Greenhouse Gas Emissions: Views about climate change, including the effect of global warming, have led to significant U.S. and international legislative and regulatory efforts to limit greenhouse gas (“GHG”) emissions, including our aircraft and vehicle engine emissions. Increasingly, state and local governments are also considering GHG regulatory requirements. Compliance with such regulation and the associated potential cost is complicated by the fact that various countries and regions are following different approaches to the regulation of climate change. In 2016, the International Civil Aviation Organization (“ICAO”) formally adopted a global, market-based emissions offset program known as the Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”) in lieu of a patchwork of country-level requirements to address emissions from international flights. This program established a goal for the aviation industry to achieve carbon neutral growth in international aviation beginning in calendar 2021. Any growth above a global industry emissions baseline would need to be addressed using either eligible carbon offset credits or qualifying sustainable aviation fuel (“SAF”) purchases. As a result of the COVID-19 pandemic’s effect on international aviation, during the pilot phase of the CORSIA program (from calendar 2021 to calendar 2023), flight activity did not exceed the baseline, so airlines had no offsetting obligations. During the subsequent first phase of the program, which runs from calendar 2024 to calendar 2026, flight activity is rebounding, and emissions are expected to exceed the baseline. The U.S. agreed to participate but has not fully implemented CORSIA to date. In the interim, we continue to voluntarily report our emissions data to the FAA. Other ICAO member states are moving forward with implementing CORSIA and have taken additional action to reduce aircraft GHG emissions. For example, both the EU and the United Kingdom have implemented regulations to include aviation in the Emissions Trading Scheme (“ETS”). For the EU, under these regulations any airline with flights originating or landing in the European Economic Area (“EEA”) is subject to the ETS. Beginning in calendar 2012, airlines including FedEx were required to purchase emissions allowances or, alternatively, purchase qualifying SAF if they exceeded the number of free allowances allocated under the ETS. While the current scope of ETS has been limited to apply only to flights within the EEA through calendar 2026, the EU adopted legislation in 2023 requiring that a study be conducted in July 2026 reassessing whether the European Commission should propose to expand the scope of ETS to include international flights from the EEA based on CORSIA implementation and performance. We expect compliance with CORSIA and the ETS to increase FedEx operating expenses. The amount of such increase will ultimately depend on a number of factors, including CORSIA and ETS program elements still under development or reconsideration, the number of our flights subject to CORSIA and the ETS, the fuel efficiency of our fleet, the average growth of the aviation sector, our ability to utilize SAF in the future and the price of such fuels, the availability of free allowances (which will be eliminated entirely by the end of calendar 2026), and the price of eligible emission units, offsets, or allowances required to be purchased by FedEx. Additionally, in 2017, ICAO adopted new carbon dioxide emissions standards that would apply not only to new aircraft types as of calendar 2020, but also to new deliveries of currently in-production aircraft types from calendar 2023. ICAO established a production cutoff date of January 1, 2028 for aircraft that do not comply with these standards. The standards are considered to be especially stringent for larger aircraft weighing over 60 tons. In 2021, the EPA adopted its own aircraft and aircraft engine GHG emissions standards, which are aligned with the 2017 ICAO emissions standards, and the FAA finalized its own conforming rulemaking to -11- implement the standards through its aircraft certification process which went into effect in April 2024. In the past, the U.S. Congress has also considered bills that would regulate GHG emissions, and some form of federal climate change legislation is possible in the future. In January 2025, the U.S. again withdrew from the Paris climate accord, an agreement among 197 countries to reduce GHG emissions. The effect of the withdrawal on future U.S. policy regarding GHG emissions and on other GHG regulation is uncertain. Additionally, the extent to which other countries implement CORSIA could have an adverse direct or indirect effect on our business. Starting in January 2025, we were required to monitor and report the non-carbon dioxide aviation effects for certain routes in the European Union as part of the expanded scope of the ETS. In January 2027, we will be required to monitor and report non-carbon dioxide effects for all flight activity involving an airport located in the EEA. While the requirement currently is only to report and verify the non-carbon dioxide emissions, we may be required to comply with additional reporting obligations in the future. See “ Item 1A. Risk Factors — Environmental, Climate, and Weather Risks — We may be affected by global climate change or by legal, regulatory, or market responses to such change” for information on disclosure requirements regarding GHG emissions and other environmental matters. Sustainable Aviation Fuels: On October 18, 2023, the EU adopted its RefuelEU regulation requiring fuel producers at certain EU airports to supply a minimum percentage of blended SAF to aircraft operators beginning January 1, 2025. The mandate requires that, beginning in calendar 2025, two percent of the jet fuel supplied in certain EU airports must qualify as SAF, and the percentage increases incrementally to 70% in calendar 2050. Fuel suppliers have incorporated a SAF fee into future uptake agreements for their compliance or production costs related to the Refuel EU regulation. As part of the RefuelEU requirements, beginning January 1, 2025, we are required to submit a verified compliance report on actual fuel uplift at EU covered airports, SAF purchases, and economic fuel tankering. A similar mandate went into effect in the United Kingdom on January 1, 2025. We continue to monitor the introduction of fuel mandates in other countries and regions across the world. Hazardous Substances: U.S. federal and state authorities continue to adopt legislation and regulations restricting the use of certain per- and polyfluoroalkyl substances (“PFAS”). PFAS are used in a wide variety of consumer and industrial products, including the firefighting foams approved for use by the FAA to extinguish fuel-based fires at airports and refineries. In April 2025, the EPA announced its strategic plans to comprehensively address PFAS in air emissions, water, land, waste, and manufactured and imported products. Certain states have adopted laws banning the manufacture, sale, distribution, and/or use of firefighting foams with intentionally added PFAS. The EPA rule designating certain P FAS as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) became effective July 2024. The EPA rule could subject airlines and refineries to potential liability for cleanup of historical PFAS contamination. We could incur remediation costs for currently and formerly operated facilities. While the impact of these federal and state laws and regulations on our business and operations cannot currently be predicted, we remain committed to transitioning to PFAS-free materials for fire suppression in accordance with the framework outlined by the FAA. Vehicle Emissions Regulations: The Clean Air Act grants the EPA and, through the preemption waiver process, the state of California the authority to set vehicle emission standards. In October 2023, the California Air Resources Board’s (“CARB”) Advanced Clean Fleets (“ACF”) rule requiring subject companies to add an increasing percentage of medium and heavy duty zero emission trucks became effective. The U.S. president signed congressional resolutions preventing California from implementing its ACF rule and its stricter emission standards for heavy-duty vehicles in June 2025. In response, California filed a lawsuit challenging the president’s authority to prevent implementation of the program and standards. We will continue to monitor federal and state actions on vehicle emissions regulations for impacts to our operations. We are also subject to other U.S. and international environmental laws and regulations relating to, among other things, the shipment of dangerous goods, the management of underground storage tanks, the discharge of effluents from our properties and equipment, and contingency planning for spills of petroleum products. Additionally, certain contractual and lease agreements governing regulated substances could trigger investigation and remediation obligations if sites become affected. FedEx has an environmental management system based on International Standardization 14001 designed to maintain compliance with these regulations and minimize our operational environmental footprint and certified all U.S. airport locations in 2022. Export Controls. In recent years, the U.S. government has increased the number of companies and persons subject to U.S. export control regulations. Such regulations can restrict the types of items that FedEx customers are permitted to ship to certain entities, and in some instances may prohibit FedEx from serving certain entities altogether. Violations of these regulations can result in significant monetary and other penalties. For example, the Export Control Reform Act of 2018 (the “ECRA”) and the International Emergency Economic Powers Act (the “IEEPA”), and their implementing regulations, the Export Administration Regulations and Office of Foreign Asset Control regulations, may hold carriers such as FedEx strictly liable for violations without requiring evidence that the carriers had knowledge of any violations. Violations of the ECRA and IEEPA can result in criminal penalties of up to $1 million and civil penalties up to $378,000 (or twice the value of the transaction) per individual violation. FedEx continues to invest in improvements and updates to its export control compliance programs. However, the heightened focus on export controls by the U.S. government increases FedEx’s exposure to potential regulatory penalties and could result in higher compliance costs. -12- Customs Clearance, Customs Brokerage, and Freight Forwarding . Our customs clearance activities, including customs brokerage, are subject to regulation by U.S. Customs and Border Protection and other partner government agencies (for example, the Food and Drug Administration) that regulate the importation and exportation of specific products. Our freight forwarding activities are regulated by the TSA within the Department of Homeland Security, the U.S. Federal Maritime Commission (ocean freight forwarding), and the Department of Transportation (air freight forwarding). Our offshore operations are subject to similar regulation by the regulatory authorities of foreign jurisdictions. Labor . All U.S. employees at FedEx are covered by the Railway Labor Act of 1926, as amended (the “RLA”), while labor relations within the U.S. at our other companies are governed by the National Labor Relations Act of 1935, as amended (the “NLRA”). Under the RLA, groups that wish to unionize must do so across nationwide classes of employees. The RLA also requires mandatory government-led mediation of contract disputes supervised by the National Mediation Board (“NMB”) before a union can strike or an employer can replace employees or impose contract terms. This part of the RLA helps minimize the risk of strikes that would shut down large portions of the nation’s economy. Under the NLRA, employees can unionize in small localized groups, and government-led mediation is not a required step in the negotiation process. The RLA was originally passed to govern railroad and express carrier labor negotiations. As transportation systems evolved, the law expanded to cover airlines, which are now the dominant national transportation systems. As an express air carrier with an integrated air/ground network, FedEx and its employees have been covered by the RLA since the founding of the company. The purpose of the RLA is to provide employees a process by which to unionize (if they choose) and engage in collective bargaining while also protecting the nation’s transportation networks from damaging work stoppages and delays. Specifically, the RLA ensures that an entire transportation system, such as at FedEx , cannot be shut down by the actions of a local segment of the network. The U.S. Congress has, in the past, considered adopting changes in labor laws that would make it easier for unions to organize units of our employees. For example, there is always a possibility that Congress could remove most FedEx employees from the jurisdiction of the RLA, thereby exposing the FedEx network to sporadic labor disputes and the risk that small groups of employees could disrupt the entire air/ground express network. In addition, the NMB and the National Labor Relations Board (“NLRB”) have and may continue to take actions that could make it easier for our employees, and employees of service providers contracting with FedEx to conduct certain linehaul and pickup-and-delivery operations, to organize under the RLA or NLRA. For a description of these and other potential labor law changes, see “ Item 1A. Risk Factors ” of this Annual Report. Data Protection. There has recently been heightened regulatory and enforcement focus relating to the collection, use, retention, transfer, and processing of personal data in the U.S. (at both the state and federal level) and internationally. For more information, see “ Item 1A. Risk Factors ” of this Annual Report. Reputation and Responsibility FedEx is one of the most trusted and respected companies in the world, and the FedEx brand name is a powerful sales and marketing tool. Among the many reputation awards we received during 2026, FedEx ranked 18 th overall on FORTUNE magazine’s “World’s Most Admired Companies” list — the 26 th consecutive year FedEx has ranked among the top 20 on the prestigious list. We also retained our position as the highest ranked delivery company on the overall “World’s Most Admired Companies” list. Additionally in 2026, Ethisphere, a global leader in defining and advancing the standards of ethical business practices, named FedEx as one of the “World’s Most Ethical Companies ® ” for the fourth consecutive year. Along with a strong reputation among customers and the general public, FedEx is widely acknowledged as a great place to work. For example, in 2026, FedEx was ranked 23rd on LinkedIn’s “The 50 best employers to grow your career in the U.S.” and was also recognized as one of Forbes’ “America’s Best Employers 2026.” The success of our efforts is built on our sound corporate responsibility practices, which are aligned with our strategic focus. Our 2026 Corporate Responsibility Report is available at fedex.com/en-us/sustainability/reports.html. This report details progress toward our sustainability strategies, goals, and initiatives and our approach toward industry leadership in sustainability to support our strategy and values. Information in our Corporate Responsibility Report is not incorporated by reference in, and does not form part of, this Annual Report. We remain committed to helping lift local economies by investing in people and communities where we live and work. In the U.S., this includes seeking diverse suppliers and strengthening our supply chain by sourcing from small, minority-, and women-owned businesses. We have a history of supporting diverse and inclusive nonprofit and community empowerment organizations to create greater economic opportunity, help amplify diverse voices, and provide access to leadership, educational, and employment opportunities that inspire people to succeed. -13- Human Resource Management Our Culture At FedEx, we believe our culture is a strategic asset. For more than 50 years, our People-Service-Profit philosophy has driven our unrivaled success, innovation, and resilience as a global industrial network. Our philosophy holds that when we take care of our people, they deliver outstanding service, which drives strong business results and generates the resources needed to reinvest in our team members and our operations. The Compensation and Human Resources Committee of our Board of Directors reviews and discusses with management our key human resource management strategies and programs. Across our global network, team members are united by the Purple Promise: our shared commitment to make every FedEx experience outstanding. Our five culture values guide how we lead, collaborate, and serve — take care of each other, commit to do good, own outstanding, drive business results, and create what’s next. Health and Safety Protecting the health and safety of our team members, service providers, and the communities we serve is fundamental to how we operate. Our “Safety Above All” philosophy is embedded across our governance, policies, and daily operations — guiding decisions from equipment design and operational processes to training and recognition programs. Our Board of Directors plays an active role through the Governance, Safety, and Public Policy Committee, which regularly reviews operational safety metrics and performance within the company and discusses safety-related programs and developments with management. At the enterprise level, safety is integrated into policies, technology investments, risk evaluation processes, and training programs designed to prevent incidents and strengthen a culture of accountability. We are committed to compliance with all applicable workplace health and safety regulations and collaborate with regulatory agencies to ensure ongoing adherence and continuous improvement. Equality, Opportunity, and Diversity As part of our longstanding commitment to opportunity and access, we organize our efforts across four interconnected pillars : Our People; Our Education and Engagement; Our Communities, Customers, and Suppliers; and Our Story. Underpinning each of these pillars is our commitment to Equality, Opportunity, and Diversity (“EO&D”). Since our founding in 1971, we have believed that when everyone has the opportunity to grow and advance, our team members thrive and FedEx prospers. We believe that varied backgrounds, experiences, and perspectives are a source of strength that enhance innovation, decision-making, and service delivery across our network. Regional councils across our international operations provide forums for local insight, dialogue, and alignment on equality, opportunity, diversity, and culture. These forums help inform day-to-day business practices while reinforcing enterprise-wide values. Consolidated EEO-1 Reports can be found at fedex.com/en-us/sustainability/reports.html. Quality of Life At FedEx, we invest in benefits that support the whole person. We support the health, safety, and well-being of our employees through a comprehensive suite of benefits designed to meet the diverse needs of our employees across the globe. These offerings help us attract and retain talent while reinforcing our People-Service-Profit philosophy. Our Global Total Rewards team conducts regular benchmarking and internal pay equity analyses to help ensure our offerings remain competitive, compliant with applicable regulations, and responsive to employee feedback. In the U.S., FedEx covers approximately 70% of total eligible health costs for more than 355,000 enrolled part-time and full-time employees and dependents (based on 2026 enrollment data). U.S. health care benefits include flexible options across medical, dental, vision, pharmacy, and behavioral care, and focus on three main priorities: Access, Affordability, and Advocacy. Medical coverage starts at as low as $0 monthly contributions (premiums) for employee-only coverage. In FY26, we continued to evaluate, enhance, and streamline our benefits portfolio across the globe to provide more access to care and strengthen work-life balance support. Learning and Development We are committed to equipping team members with the tools, training, and support to grow their careers at FedEx. All new hires complete onboarding training tailored to individual roles, including safety, security, compliance, and sustainability. Function-specific programs develop power skills, technical expertise, and regulatory competencies across frontline, operations, and professional roles. Compliance training remains central to strengthening enterprise-wide risk awareness. In 2026, we launched an enterprise-wide AI Literacy Program for all team members to provide knowledge and skills to use AI responsibly and effectively and to build AI confidence and capability across FedEx. -14- Executive development includes onboarding and transition support, content to hone leadership capabilities, and executive coaching. Our global succession management process proactively identifies and develops high-potential talent through objective assessments, tailored development, and transparent governance, providing enterprise-wide visibility into our leadership pipeline and ensuring leadership continuity and resilience across our worldwide operations. Talent Acquisition, Engagement, and Turnover Our global team is at the heart of our performance, reputation, and resilience. We work to attract and retain high-performing team members by aligning our human resource strategy with the evolving needs of the business and the expectations of our team members. From hiring and onboarding to upskilling and engagement, we are focused on supporting team members throughout their entire employment lifecycle. We have strengthened internal talent pipelines through targeted development programs which include job-specific training and reskilling efforts such as the Driver Development program, which prepares team members to operate tractor-trailers, and training to support new operational roles tied to evolving technologies, including EVs, cargo bikes, and e-motorcycles. Our recruiting practices are designed to identify high-quality candidates while maintaining compliance with labor regulations. We conduct periodic labor practice audits and use performance data to strengthen hiring outcomes. Our hiring strategy is data-driven and aligned to enterprise priorities, enabling us to evaluate recruitment effectiveness, cost per hire, and process improvements across operating companies. To improve both speed and candidate experience, we continue to modernize the hiring process. Our strategy uses automation, mobile tools, and digital outreach to meet candidates where they are, internally through our careers platform and externally through targeted social and digital channels. Team member feedback plays a central role in refining our human resources strategy. Our enterprise-wide global listening platform harmonizes survey timing and structure across operating companies and supports both annual engagement surveys and pulse checks, enabling consistent, data-driven decision-making at scale. Globally, in 2026, we hired 469,000 full- and part-time team members. Turnover for part-time team members, primarily package handlers at our sorting locations, was 78%, while full-time team member turnover was 18%, in 2026. Turnover rates among part-time frontline workers in a number of industries are historically higher than among other employee groups. Within the ground transportation industry, many part-time workers pursue temporary employment opportunities that allow them to exit and re-enter the workforce more frequently based on their needs. These higher turnover rates drive elevated hiring volumes. Other Information As of May 31, 2026, FedEx employed approximately 300,000 permanent full-time and approximately 230,000 permanent part-time employees and utilized approximately 5,300 service providers to conduct certain linehaul and pickup-and-delivery operations. See “Business Segments — Federal Express” for information regarding our pilots at Federal Express, who are a small number of our total employees, which are represented by the ALPA and are employed under a newly ratified CBA. A small number of our other employees are members of unions. For additional information, see “Regulation” and “ Item 1A. Risk Factors .” Our Community The impact of our culture extends beyond the workplace to the communities where we live, work, and serve. Through non-profit partnerships, education initiatives, and employee engagement — including programs highlighted on our FedEx Cares website (visit www.fedexcares.com) — we work to expand access to opportunity and promote economic mobility. Our collaborations focus on empowering diverse voices and providing access to leadership, education, and employment opportunities that inspire people to succeed. By reinforcing our People-Service-Profit philosophy, we aim to create long-term value for communities, customers, and FedEx alike. Team members contribute through volunteering and skills-based engagement, supported by global partnerships that advance dignity, access, and opportunity. As One FedEx, we also support a global supplier base that includes small businesses. The Environment By building smarter supply chains, we aim to deliver more resilient and sustainable value for our customers and the global economy. We’re advancing a long-term strategy to reduce our climate impact, codified by our goal to reach carbon-neutral operations by 2040. Network 2.0 and our ongoing air network redesign accelerate these efforts. We have demonstrated our capabilities to reduce -15- environmental impacts by improving the efficiency of our fleet, reducing miles driven, and minimizing route redundancies. Our climate strategy builds on this approach, while adapting to changing market conditions. It is founded on three guiding principles. • Decarbonize what’s possible: Prioritize emissions reductions through proven technology, efficiency, and fleet modernization. • Co-create with purpose: Collaborate across industry, government, and academia to accelerate innovation and close technology gaps. • Neutralize what’s left: Invest in measurable, durable carbon removal solutions for residual emissions starting in 2040. In 2021, we established an enterprise-wide goal to achieve carbon-neutral operations by 2040, encompassing Scope 1 and 2 emissions, along with Scope 3 emissions from contracted transportation. Since then, we have reduced emissions from FedEx-controlled operations by over 15%, while delivering strong revenue growth, reflecting steady progress across multiple network levers. Also, this year, the Science Based Targets initiative (“SBTi”) validated our near-term science-based emissions reduction targets, reinforcing our climate strategy and commitment to “decarbonize what’s possible” within our operations. Even if we deploy all decarbonization efforts and technology at our disposal, there will be emissions remaining in 2040. Therefore, we will need proven and durable carbon removal solutions available for us to meet our carbon-neutral goal. If we don’t invest and support this nascent industry today, effective solutions will not be available when we and our industry need to avert the worst impacts of climate change. For this reason, we have helped establish the Yale Center for Natural Carbon Capture, empowering Yale scientists to rapidly advance research on nature-based, durable carbon dioxide removal solutions. Our support has helped to enable faster transition of several solutions from lab to commercial application, driving a robust pipeline of solutions to add future supply of carbon credits that are measurable, verifiable, and durable to both the compliance and voluntary marketplace. We align our assessment and reporting approach with the recommendations from the Global Reporting Initiative, Sustainability Accounting Standards Board, the Task Force on Climate-related Financial Disclosures, and applicable mandatory disclosure requirements. Evaluation of climate-related physical and transition risk is integrated into our enterprise risk management process (“ERM”), which identifies and reports top enterprise risks in the short-, medium-, and long-term through industry research, surveys, and workshops with business leaders. Separately, FedEx has conducted a dedicated Climate Risk Assessment to further analyze climate-related impacts, risks, and opportunities. This assessment complements the ERM framework and informs ongoing risk management and strategic planning. Based on the risks identified, specific contingency plans and strategies are formulated to minimize potential adverse effects on our business. Sustainable Aviation Fuels, Aircraft Fuel Conservation, and Fleet Modernization Our aircraft operations are the largest contributor to our emissions footprint, and aviation fuel also represents one of our largest expenses. To reduce emissions and strengthen the operational resilience of our air networks, we are focused on two central strategies: sourcing cost-competitive sustainable aviation fuel (“SAF”) and improving efficiency through fleet modernization and fuel conservation. Beginning in May 2025, FedEx executed five SAF offtake agreements designed to bring more than 16.5 million gallons of blended SAF deployed at a minimum blend ratio of 30% online across five U.S. airports: Los Angeles (LAX), Chicago O’Hare (ORD), Miami (MIA), Dallas Fort Worth (DFW), and New York-JFK International (JFK). These efforts support our goal to source 30% of jet fuel blended with alternative sources by 2030. In addition to voluntary procurement, we also comply with SAF blending mandates in regions across the globe. Modernizing our fleet of 700 aircraft remains one of the most impactful ways to improve fuel efficiency while reducing emissions and operating costs. In 2025, we saved 120 million gallons of jet fuel through our aircraft modernization efforts. These included the ongoing retirement of less efficient three-engine aircraft and the integration of newer, fuel-efficient models that reduce emissions per package-mile. These efforts build on our multi-year modernization program, including a retirement strategy for our remaining three-engine aircraft by 2032. In addition, the FedEx Fuel Sense program, launched in 2006, continues to deliver meaningful fuel savings through continuing operational efficiency measures, like real-time route optimization and automated fuel tracking, incorporated into daily operations. Through these fleet modernization and fuel conservation efforts we have reduced our aircraft emissions intensity by over 32% from a 2005 baseline and have set a target to further reduce our aircraft emissions intensity by 40% by 2034. While FedEx works extensively to modernize our air fleet and conserve fuel, our future emissions reduction ambition relies on reducing emissions with SAF. We continue to work closely with industry coalitions, governments, and non-government organizations to scale SAF supply and signal long-term demand for low-carbon fuel innovation. Concerted support must be part of global policy frameworks, including incentives to increase production to achieve requisite SAF market growth. -16- Vehicle Electrification and Alternative Fuels Our approach to our surface operations prioritizes pairing the right vehicle with the right route while balancing emissions reduction, local regulatory requirements, and performance demands. Electrification and alternative fuels present a significant opportunity to reduce the environmental impact of our global ground fleet, which includes more than 180,000 motorized vehicles including pickup-and-delivery (“PUD”) vans, long-haul trucks, airport ground equipment, and off-road vehicles. FedEx continues its phased approach to fleet electrification. During this time, 50% of all purchase orders issued for our owned PUD fleet were for electric vehicles (“EVs”). FedEx now operates nearly 9,500 on- and off-road EVs across our global fleet. These milestones reflect continued progress during a period of significant network transformation, closely aligned with our broader network redesign, which is reshaping how fleets and infrastructure are deployed across our operations. As Network 2.0 transformation continues to streamline PUD operations and reduce route redundancies, fleet requirements are evolving alongside a more efficient operating model. As a result, we are reassessing the pace and scale of EV purchases against our previously stated 2030 EV purchase order goal. Future deployment plans and associated goals will be refined as the network redesign progresses toward completion in 2027. We continue to collaborate with leading vehicle manufacturers to co-develop EVs that are better suited to the demands of our Network 2.0 optimization strategy, which aims to improve delivery efficiency by redesigning routes and aligning vehicle capacity with shipment volume. In 2025, we made a strategic investment in Harbinger Motors, through its $160 million Series C funding round, supporting the development of medium-duty EV solutions, including an initial order of 53 trucks. FedEx continues to explore new solutions to address technology gaps with heavier duty long-haul vehicles, including new battery configuration and lower-carbon drop in fuels. In 2025, FedEx advanced heavy-duty electric truck pilots across multiple markets, including deployments of Class 7 and 8 electric trucks in the U.S. and expanded trials of the eActros 300 electric tractor from Mercedes-Benz in Europe. Beyond electrification, we are testing drop-in alternative fuels, including renewable diesel and hydrotreated vegetable oil (“HVO”). Alternative fuels can offer practical solutions for heavy-duty vehicles and long-haul applications where full electrification is not yet feasible at scale. Facility Resiliency and Renewable Energy We operate more than 4,000 facilities across the globe, including air and ground hubs, local stations, freight service centers, and retail locations. This physical footprint presents an opportunity to improve energy efficiency, scale renewable energy, and strengthen operational resilience. Our transition to one FedEx and implementation of Network 2.0 transformation will support our sustainability efforts through the minimization of operational redundancies and reduction in our overall physical footprint. FedEx is actively investing in renewable energy through a diversified strategy that includes on-site solar, off-site generation, utility partnerships, and exploring virtual power purchase agreements and options for energy attribute certificates. We are executing a portfolio-based energy strategy to increase renewable electricity generation and procurement across our facilities, while building the foundation for long-term electrification and grid resilience. Last year, we set mid-term renewable energy goals through calendar 2033 as we advance to our goal of having all electricity used at our facilities from renewable sources by calendar 2040. In 2025 we sourced 96.7 GWh of renewable energy and 37 facilities generated on- or off-site solar energy, up from 34 in the prior year. We are committed to embedding resiliency in our operations as the physical risks of climate change increase, causing extreme weather events, strain on electricity grids, and higher energy costs. We invest in infrastructure reinforcement to meet growing electricity demand and evolving renewable generation standards, in addition to mitigating the potential for storm damage. We also continuously enhance our contingency planning to address the impacts of severe weather more quickly. We strive to reduce the waste we generate and recycle waste when possible. We challenge our individual team members to find new ways to improve efficiencies and equip them with Quality Driven Management (“QDM”) tools to assist in identifying waste. QDM tools are designed to drive continuous improvement and, in many cases, successful ideas become integrated across our networks. Sustainable Customer Solutions FedEx handles more than 18 million shipments per day across our global network. We recognize that the transportation of those goods has environmental consequences, particularly in the form of emissions and waste. This is why we’re expanding our tools, technologies, and packaging solutions to help customers reduce their environmental impact while meeting the demands of a growing e-commerce economy. We integrate circularity principles into our package design to minimize our environmental impact while protecting shipments from damage and loss. For example, our Reusable Padded Pak is designed to reduce single-use packaging in e-commerce shipping and returns. In 2025, the FedEx Packaging Lab advanced its collaboration with Returnity to develop a reusable packaging system for B2B shippers. The solution is designed to address common barriers to adoption by eliminating handling fees typically associated with alternative packaging formats, enabling a more seamless transition from single use to reusable packaging. To help us source our -17- packaging materials responsibly, we also seek relevant third-party certifications. In 2025, 86% of FedEx packaging materials were from third-party certified sources. Our FedEx Sustainability Insights (“FSI”) tool gives our customers and suppliers access to estimated CO 2 e emissions data associated with their FedEx shipments, from the individual package to account levels, enabling them to understand their environmental impact and drive informed supply chain decisions. This tool enables greater transparency for customers to inform their emissions reporting, understand their carbon footprint, and make informed decisions about their shipping patterns. The platform is developed in alignment with the Greenhouse Gas Protocol and the Global Logistics Emissions Council framework and includes forecasting and predictive modeling capabilities for U.S.-based users. Launched globally in 2024, FSI is currently translated into more than 30 languages and available in over 100 markets. In 2025, over 30,000 emissions reports were generated from the tool. Providing our customers with this level of information empowers them to gain a better understanding of their Scope 3 emissions generated from their shipping activities with us and enables service selections that meet their business needs and sustainability aspirations. For additional information on the ways we are minimizing our impact on the environment, see fedex.com/en-us/sustainability.html. For additional information regarding environmental, climate, and weather-related regulation and risks, see “Regulation” above and “ Item 1 A. Risk Factors ” under “Environmental, Climate, and Weather Risks.” Governance The FedEx Board of Directors is comprised of a majority of independent directors and is committed to the highest quality corporate governance and accountability to stockholders. Our Board of Directors periodically reviews all aspects of our governance policies and practices, including our Corporate Governance Guidelines (the “Guidelines”) and our Code of Conduct, in light of best practices and makes whatever changes it deems appropriate to further our longstanding commitment to the highest standards of corporate governance. The Guidelines and the Code of Conduct, which apply to all of our directors, officers, and employees, including our principal executive officer and senior financial officers, are available under the Corporate Governance heading under “Governance” on the Investor Relations page of our website at investors.fedex.com. We will post under the Corporate Governance heading on the Investor Relations page of our website information regarding any amendment to, or waiver from, the provisions of the Code of Conduct to the extent such disclosure is required.