FedEx Annual Report 2021

FY2021 Annual Report · FedEx

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2021
ANNUAL REPORT

MOVING THE WORLD FORWARD
MOVING THE WORLD FORWARD

To our shareowners,
To our shareowners,
Through an extremely challenging environment in FY21, FedEx delivered record profit as well as record revenue — $84 billion.
Through an extremely challenging environment in FY21, FedEx delivered record profit as well as record revenue — $84 billion.
This is in no short measure due to the outstanding work by our global team members.
This is in no short measure due to the outstanding work by our global team members.

Since the onset of the pandemic, FedEx has been a driving force to move the world forward, keeping the world’s health care,
Since the onset of the pandemic, FedEx has been a driving force to move the world forward, keeping the world’s health care,
industrial, and at-home supply chains moving. From historic airlifts of personal protective equipment to daily — but equally
industrial, and at-home supply chains moving. From historic airlifts of personal protective equipment to daily — but equally
miraculous — contributions under the radar, the world has relied on this FedEx team.
miraculous — contributions under the radar, the world has relied on this FedEx team.

FedEx Express and FedEx Logistics have collaborated to transport nearly 100 kilotons of personal protective equipment around
FedEx Express and FedEx Logistics have collaborated to transport nearly 100 kilotons of personal protective equipment around
the world, and we are an integral part of the global vaccine supply chain, delivering vaccines and related supplies to more than
the world, and we are an integral part of the global vaccine supply chain, delivering vaccines and related supplies to more than
40 countries worldwide. In the first six months of distribution, we’ve delivered approximately 187 million COVID-19 vaccine
40 countries worldwide. In the first six months of distribution, we’ve delivered approximately 187 million COVID-19 vaccine
doses throughout the United States, roughly half of the total vaccines distributed by the federal government.
doses throughout the United States, roughly half of the total vaccines distributed by the federal government.

Each of these statistics is the result of impeccable collaboration across operating companies with coordination support provided
Each of these statistics is the result of impeccable collaboration across operating companies with coordination support provided
by FedEx Services.
by FedEx Services.

At FedEx Logistics, the FedEx Trade Networks team helped facilitate the transport of one of the first Pfizer-BioNTech vaccine
At FedEx Logistics, the FedEx Trade Networks team helped facilitate the transport of one of the first Pfizer-BioNTech vaccine
shipments from Germany to the U.S. for testing, and the FedEx Supply Chain team has been instrumental in helping with dock
shipments from Germany to the U.S. for testing, and the FedEx Supply Chain team has been instrumental in helping with dock
operations where vaccine orders are filled. FedEx Custom Critical has trucked millions of vaccines from the distribution centers
operations where vaccine orders are filled. FedEx Custom Critical has trucked millions of vaccines from the distribution centers
to our FedEx Express hubs where the integrated air and ground network has delivered the vaccines to dosing centers for
to our FedEx Express hubs where the integrated air and ground network has delivered the vaccines to dosing centers for
administration with an average delivery time of less than 20 hours in the U.S.
administration with an average delivery time of less than 20 hours in the U.S.

This work is backed by our proprietary SenseAware ID monitoring technology, our Priority Alert service, and the ongoing
This work is backed by our proprietary SenseAware ID monitoring technology, our Priority Alert service, and the ongoing
development of FedEx Surround — our new platform from FedEx Dataworks which provides unprecedented visibility and
development of FedEx Surround — our new platform from FedEx Dataworks which provides unprecedented visibility and
predictability through machine learning that makes customer supply chains smarter.
predictability through machine learning that makes customer supply chains smarter.

And to the north in Canada, the FedEx network has been the spine of the vaccine rollout — moving tens of millions of vaccines
And to the north in Canada, the FedEx network has been the spine of the vaccine rollout — moving tens of millions of vaccines
into and across Canada safely and securely. We are prepared to expand this mission to other countries and regions and use our
into and across Canada safely and securely. We are prepared to expand this mission to other countries and regions and use our
networks to deliver relief, prevention, and hope.
networks to deliver relief, prevention, and hope.

Meanwhile, FedEx Ground played a huge part in allowing people to stay safe by delivering record-setting volumes of goods to
Meanwhile, FedEx Ground played a huge part in allowing people to stay safe by delivering record-setting volumes of goods to
people’s homes throughout a peak like no other.
people’s homes throughout a peak like no other.

Strategies for what’s next
Strategies for what’s next
This is our company’s finest hour and was made possible by our strategies, our networks, and our FedEx culture. We anticipated
This is our company’s finest hour and was made possible by our strategies, our networks, and our FedEx culture. We anticipated
accelerations across the e-commerce, international, and digital markets, and we were prepared when the pandemic accelerated these
accelerations across the e-commerce, international, and digital markets, and we were prepared when the pandemic accelerated these
trends. Of course, businesses globally continue to see challenges amid these developments including supply chain disruptions and
trends. Of course, businesses globally continue to see challenges amid these developments including supply chain disruptions and
labor shortages. As a result, we’ve been taking bold actions across the enterprise to improve service for our customers and prepare
labor shortages. As a result, we’ve been taking bold actions across the enterprise to improve service for our customers and prepare
for sustained volume increases through continued investments in people, capacity, and technology to optimize our networks.
for sustained volume increases through continued investments in people, capacity, and technology to optimize our networks.

In the e-commerce market, we’ve been making intentional investments for years. Key decisions aimed at winning in this massive
In the e-commerce market, we’ve been making intentional investments for years. Key decisions aimed at winning in this massive
and fast-growing market include moving to seven-day operations at FedEx Ground, insourcing SmartPost volume to become
and fast-growing market include moving to seven-day operations at FedEx Ground, insourcing SmartPost volume to become
FedEx Ground Economy, growing our large package network, offering the first FedEx-branded through-the-door service options
FedEx Ground Economy, growing our large package network, offering the first FedEx-branded through-the-door service options
with FedEx Freight Direct, and accelerating the expansion of our retail convenience network including new hotel, convention
with FedEx Freight Direct, and accelerating the expansion of our retail convenience network including new hotel, convention
center, and OnCampus locations for FedEx Office.
center, and OnCampus locations for FedEx Office.

During our 2020 stockholders meeting last September, we announced three new strategic operating principles as our blueprint
During our 2020 stockholders meeting last September, we announced three new strategic operating principles as our blueprint
for what’s next. Operate Collaboratively continues to fuel efforts like Last Mile Optimization and ongoing FedEx Freight support
for what’s next. Operate Collaboratively continues to fuel efforts like Last Mile Optimization and ongoing FedEx Freight support
of FedEx Express and FedEx Ground volume. We will continue to use the individual strengths of our operating companies to
of FedEx Express and FedEx Ground volume. We will continue to use the individual strengths of our operating companies to
improve efficiencies and ensure that we are putting the right package in the right network at the right cost to serve. These
improve efficiencies and ensure that we are putting the right package in the right network at the right cost to serve. These
strategies have been indispensable during the pandemic and in preparation for the future where we predict daily volumes of 172
strategies have been indispensable during the pandemic and in preparation for the future where we predict daily volumes of 172
million packages in the U.S. domestic parcel market in calendar year 2026.
million packages in the U.S. domestic parcel market in calendar year 2026.

Global volumes have accelerated in terms of both pallets and parcels. When the pandemic forced a dramatic decrease in passenger
Global volumes have accelerated in terms of both pallets and parcels. When the pandemic forced a dramatic decrease in passenger
flights — and the available air cargo space these planes provide — we had strategies in place to pick up the slack and keep the world’s
flights — and the available air cargo space these planes provide — we had strategies in place to pick up the slack and keep the world’s
supply chains operating. With the same precision, we’re refining our operating plans for the return of commercial airline traffic and
supply chains operating. With the same precision, we’re refining our operating plans for the return of commercial airline traffic and
underbelly capacity. And for e-commerce, we’re giving customers even more reasons to choose FedEx — including the addition of
underbelly capacity. And for e-commerce, we’re giving customers even more reasons to choose FedEx — including the addition of
attractive services like FedEx International Connect Plus — our day-definite e-commerce delivery service rolling out globally this fiscal year.
attractive services like FedEx International Connect Plus — our day-definite e-commerce delivery service rolling out globally this fiscal year.

2021 Annual Report
2021 Annual Report

1
1

MOVING THE WORLD FORWARD
MOVING THE WORLD FORWARD

We’re confident of the value our TNT acquisition will create for FedEx in the future, and completion of our air network integration
We’re confident of the value our TNT acquisition will create for FedEx in the future, and completion of our air network integration
in calendar year 2022 will bring the physical TNT network integration to a close providing the inflection point for long-term profit
in calendar year 2022 will bring the physical TNT network integration to a close providing the inflection point for long-term profit
improvement in Europe.
improvement in Europe.

Digital innovation is the third trend we anticipated, and the pandemic also accelerated this shift. We’ve recognized the
Digital innovation is the third trend we anticipated, and the pandemic also accelerated this shift. We’ve recognized the
importance of technology since our inception, and we’re continuing to prioritize IT modernization. Backed by our new strategic
importance of technology since our inception, and we’re continuing to prioritize IT modernization. Backed by our new strategic
operating principle, Innovate Digitally, FedEx is well positioned to capitalize on the promise of the data in our networks and the
operating principle, Innovate Digitally, FedEx is well positioned to capitalize on the promise of the data in our networks and the
mission of FedEx Dataworks to maximize that data through solutions like FedEx Surround.
mission of FedEx Dataworks to maximize that data through solutions like FedEx Surround.

We are focused on digital innovation and opportunities to serve the rapidly growing e-commerce market. Last year, we acquired
We are focused on digital innovation and opportunities to serve the rapidly growing e-commerce market. Last year, we acquired
ShopRunner, a platform that shares our vision of creating digital solutions that help brands and merchants of all sizes compete in
ShopRunner, a platform that shares our vision of creating digital solutions that help brands and merchants of all sizes compete in
e-commerce. This spring, we built on that momentum by announcing a multi-year collaboration with Adobe that will enable Adobe
e-commerce. This spring, we built on that momentum by announcing a multi-year collaboration with Adobe that will enable Adobe
Commerce merchants to integrate their online storefronts with ShopRunner. FedEx, ShopRunner, and Adobe have access to data and
Commerce merchants to integrate their online storefronts with ShopRunner. FedEx, ShopRunner, and Adobe have access to data and
intelligence at different stages of the e-commerce journey — from inspiration through delivery. By combining our unique strengths
intelligence at different stages of the e-commerce journey — from inspiration through delivery. By combining our unique strengths
and insights, we can create more reliable and seamless end-to-end e-commerce experiences for brands, merchants, and shoppers.
and insights, we can create more reliable and seamless end-to-end e-commerce experiences for brands, merchants, and shoppers.

We’re also increasing our suite of autonomous same-day and specialty delivery devices recently announcing an agreement to test
We’re also increasing our suite of autonomous same-day and specialty delivery devices recently announcing an agreement to test
Nuro’s next-generation autonomous delivery vehicle within select FedEx operations. And led by FedEx Office, we’re continuing
Nuro’s next-generation autonomous delivery vehicle within select FedEx operations. And led by FedEx Office, we’re continuing
to test Roxo™, the FedEx SameDay Bot as the pandemic accelerates demand for contactless delivery. Roxo is now approved to
to test Roxo™, the FedEx SameDay Bot as the pandemic accelerates demand for contactless delivery. Roxo is now approved to
operate in more than a dozen states in the U.S., and our teams in Dubai and Japan are also running mapping and demo versions of
operate in more than a dozen states in the U.S., and our teams in Dubai and Japan are also running mapping and demo versions of
Roxo as we eye global opportunities in the future. The strong growth of e-commerce will continue to drive demand for drivers —
Roxo as we eye global opportunities in the future. The strong growth of e-commerce will continue to drive demand for drivers —
but by shouldering some of those costly and time-consuming last-mile deliveries, our portfolio of autonomous delivery solutions
but by shouldering some of those costly and time-consuming last-mile deliveries, our portfolio of autonomous delivery solutions
will allow drivers to focus their efforts on high-value activities and high-volume delivery routes. As we continue to expand our
will allow drivers to focus their efforts on high-value activities and high-volume delivery routes. As we continue to expand our
technology footprint, we expect to create more jobs to oversee production, management, sales, mobility, and operations.
technology footprint, we expect to create more jobs to oversee production, management, sales, mobility, and operations.

Genuine leadership and a bright future
Genuine leadership and a bright future
We know the future of our operations is tied to the future of our environment, and as detailed in our 2021 Environmental,
We know the future of our operations is tied to the future of our environment, and as detailed in our 2021 Environmental,
Social, and Governance (ESG) Report, we’ve announced an ambitious goal to achieve carbon-neutral global operations by 2040
Social, and Governance (ESG) Report, we’ve announced an ambitious goal to achieve carbon-neutral global operations by 2040
focusing on vehicle electrification, sustainable energy, and carbon sequestration. Importantly, FedEx is investing in pragmatic
focusing on vehicle electrification, sustainable energy, and carbon sequestration. Importantly, FedEx is investing in pragmatic
solutions through a $100 million donation to help establish The Yale Center for Natural Carbon Capture which is tasked with
solutions through a $100 million donation to help establish The Yale Center for Natural Carbon Capture which is tasked with
developing measurable carbon capture solutions and technology to take carbon out of the atmosphere. I am proud of the
developing measurable carbon capture solutions and technology to take carbon out of the atmosphere. I am proud of the
genuine leadership role FedEx is taking to create a more sustainable future for our planet.
genuine leadership role FedEx is taking to create a more sustainable future for our planet.

Our pride in the FedEx team and our performance for shareowners is greatly tempered, however, by the senseless murder of
Our pride in the FedEx team and our performance for shareowners is greatly tempered, however, by the senseless murder of
eight of our own team members and injury of others in a horrific act of violence at a FedEx Ground facility in Indianapolis on 15
eight of our own team members and injury of others in a horrific act of violence at a FedEx Ground facility in Indianapolis on 15
April 2021. Lingering sorrow among their families, friends, and colleagues throughout FedEx can never be erased. We are also
April 2021. Lingering sorrow among their families, friends, and colleagues throughout FedEx can never be erased. We are also
grateful to our team members who, in one of our company’s darkest moments, responded decisively and with compassion to
grateful to our team members who, in one of our company’s darkest moments, responded decisively and with compassion to
help. Thank you for embodying the very best of our company’s culture when it was needed most.
help. Thank you for embodying the very best of our company’s culture when it was needed most.

We are also very grateful to Henry Maier for more than 35 years of loyal and dedicated service to FedEx and RPS which we acquired in
We are also very grateful to Henry Maier for more than 35 years of loyal and dedicated service to FedEx and RPS which we acquired in
1998. Henry’s insights have been instrumental in bringing FedEx Ground into the enormous, profitable operating company it is today.
1998. Henry’s insights have been instrumental in bringing FedEx Ground into the enormous, profitable operating company it is today.

Yes ☑ No ☐

Additionally, the Biden administration has recognized an exceptional talent in our former board member General Chris Inglis
Additionally, the Biden administration has recognized an exceptional talent in our former board member General Chris Inglis
who now serves as the United States’ first national cyber director. We benefited from Chris’s cybersecurity and information
who now serves as the United States’ first national cyber director. We benefited from Chris’s cybersecurity and information
technology expertise since he joined our board in 2015, and we wish him well in his critical new endeavor.
technology expertise since he joined our board in 2015, and we wish him well in his critical new endeavor.

The expansive list of accomplishments detailed in this letter comes down to one thing: the future of FedEx is exceedingly
The expansive list of accomplishments detailed in this letter comes down to one thing: the future of FedEx is exceedingly
bright. We are where now meets next, and looking ahead to FY22 and beyond, we are the best-positioned company in a massive
bright. We are where now meets next, and looking ahead to FY22 and beyond, we are the best-positioned company in a massive
market — with networks and capabilities that are very difficult to replicate. Most important, we’re backed by FedEx team
market — with networks and capabilities that are very difficult to replicate. Most important, we’re backed by FedEx team
members who embody the Purple Promise — “I will make every FedEx experience outstanding”— every day.
members who embody the Purple Promise — “I will make every FedEx experience outstanding”— every day.

FREDERICK W. SMITH
FREDERICK W. SMITH
Chairman and CEO
Chairman and CEO

See “Forward-Looking Statements” and “Risk Factors” on pages 23-34 of the fiscal 2021 FedEx Corporation Annual Report on
See “Forward-Looking Statements” and “Risk Factors” on pages 23-34 of the fiscal 2021 FedEx Corporation Annual Report on
Form 10-K, included herein, for a discussion of potential risks and uncertainties that could materially affect our future performance.
Form 10-K, included herein, for a discussion of potential risks and uncertainties that could materially affect our future performance.

2
2

SECURITIES AND EXCHANGE COMMISSION

UNITED STATES

Washington, D.C. 20549

FORM 10-K

(Mark One)

☑

☐

1934

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

For the fiscal year ended May 31, 2021.

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

For the transition period from to .

Commission file number 1-15829

FedEx Corporation

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State or Other Jurisdiction of

Incorporation or Organization)

942 South Shady Grove Road, Memphis, Tennessee

(Address of Principal Executive Offices)

62-1721435

(I.R.S. Employer

Identification No.)

38120

(ZIP Code)

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

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.10 per share

0.450% Notes due 2025

1.625% Notes due 2027

0.450% Notes due 2029

1.300% Notes due 2031

0.950% Notes due 2033

FDX

FDX 25A

FDX 27

FDX 29A

FDX 31

FDX 33

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☑

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§

232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth

company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐�

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial

reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑�

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

The aggregate market value of the common stock held by non-affiliates of the Registrant, computed by reference to the closing price as of the last business day of the

Registrant’s most recently completed second fiscal quarter, November 30, 2020, was approximately $70.2 billion. The Registrant has no non-voting stock.

As of July 15, 2021, 267,348,232 shares of the Registrant’s common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement to be delivered to stockholders in connection with the 2021 annual meeting of stockholders to be held on

September 27, 2021 are incorporated by reference in response to Part III of this Report.

MOVING THE WORLD FORWARD

We’re confident of the value our TNT acquisition will create for FedEx in the future, and completion of our air network integration

in calendar year 2022 will bring the physical TNT network integration to a close providing the inflection point for long-term profit

improvement in Europe.

Digital innovation is the third trend we anticipated, and the pandemic also accelerated this shift. We’ve recognized the

importance of technology since our inception, and we’re continuing to prioritize IT modernization. Backed by our new strategic

operating principle, Innovate Digitally, FedEx is well positioned to capitalize on the promise of the data in our networks and the

mission of FedEx Dataworks to maximize that data through solutions like FedEx Surround.

We are focused on digital innovation and opportunities to serve the rapidly growing e-commerce market. Last year, we acquired

ShopRunner, a platform that shares our vision of creating digital solutions that help brands and merchants of all sizes compete in

e-commerce. This spring, we built on that momentum by announcing a multi-year collaboration with Adobe that will enable Adobe

Commerce merchants to integrate their online storefronts with ShopRunner. FedEx, ShopRunner, and Adobe have access to data and

intelligence at different stages of the e-commerce journey — from inspiration through delivery. By combining our unique strengths

and insights, we can create more reliable and seamless end-to-end e-commerce experiences for brands, merchants, and shoppers.

We’re also increasing our suite of autonomous same-day and specialty delivery devices recently announcing an agreement to test

Nuro’s next-generation autonomous delivery vehicle within select FedEx operations. And led by FedEx Office, we’re continuing

to test Roxo™, the FedEx SameDay Bot as the pandemic accelerates demand for contactless delivery. Roxo is now approved to

operate in more than a dozen states in the U.S., and our teams in Dubai and Japan are also running mapping and demo versions of

Roxo as we eye global opportunities in the future. The strong growth of e-commerce will continue to drive demand for drivers —

but by shouldering some of those costly and time-consuming last-mile deliveries, our portfolio of autonomous delivery solutions

will allow drivers to focus their efforts on high-value activities and high-volume delivery routes. As we continue to expand our

technology footprint, we expect to create more jobs to oversee production, management, sales, mobility, and operations.

Genuine leadership and a bright future

We know the future of our operations is tied to the future of our environment, and as detailed in our 2021 Environmental,

Social, and Governance (ESG) Report, we’ve announced an ambitious goal to achieve carbon-neutral global operations by 2040

focusing on vehicle electrification, sustainable energy, and carbon sequestration. Importantly, FedEx is investing in pragmatic

solutions through a $100 million donation to help establish The Yale Center for Natural Carbon Capture which is tasked with

developing measurable carbon capture solutions and technology to take carbon out of the atmosphere. I am proud of the

genuine leadership role FedEx is taking to create a more sustainable future for our planet.

Our pride in the FedEx team and our performance for shareowners is greatly tempered, however, by the senseless murder of

eight of our own team members and injury of others in a horrific act of violence at a FedEx Ground facility in Indianapolis on 15

April 2021. Lingering sorrow among their families, friends, and colleagues throughout FedEx can never be erased. We are also

grateful to our team members who, in one of our company’s darkest moments, responded decisively and with compassion to

help. Thank you for embodying the very best of our company’s culture when it was needed most.

We are also very grateful to Henry Maier for more than 35 years of loyal and dedicated service to FedEx and RPS which we acquired in

1998. Henry’s insights have been instrumental in bringing FedEx Ground into the enormous, profitable operating company it is today.

Additionally, the Biden administration has recognized an exceptional talent in our former board member General Chris Inglis

who now serves as the United States’ first national cyber director. We benefited from Chris’s cybersecurity and information

technology expertise since he joined our board in 2015, and we wish him well in his critical new endeavor.

The expansive list of accomplishments detailed in this letter comes down to one thing: the future of FedEx is exceedingly

bright. We are where now meets next, and looking ahead to FY22 and beyond, we are the best-positioned company in a massive

market — with networks and capabilities that are very difficult to replicate. Most important, we’re backed by FedEx team

members who embody the Purple Promise — “I will make every FedEx experience outstanding”— every day.

FREDERICK W. SMITH

Chairman and CEO

See “Forward-Looking Statements” and “Risk Factors” on pages 23-34 of the fiscal 2021 FedEx Corporation Annual Report on

Form 10-K, included herein, for a discussion of potential risks and uncertainties that could materially affect our future performance.

UNITED STATES
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
FORM 10-K
FORM 10-K

(Mark One)
(Mark One)
☑
☑

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended May 31, 2021.
For the fiscal year ended May 31, 2021.

OR
OR

☐
☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
1934
For the transition period from to .
For the transition period from to .

Commission file number 1-15829
Commission file number 1-15829

FedEx Corporation
FedEx Corporation
(Exact Name of Registrant as Specified in its Charter)
(Exact Name of Registrant as Specified in its Charter)

Delaware
Delaware
(State or Other Jurisdiction of
(State or Other Jurisdiction of
Incorporation or Organization)
Incorporation or Organization)
942 South Shady Grove Road, Memphis, Tennessee
942 South Shady Grove Road, Memphis, Tennessee
(Address of Principal Executive Offices)
(Address of Principal Executive Offices)

62-1721435
62-1721435
(I.R.S. Employer
(I.R.S. Employer
Identification No.)
Identification No.)
38120
38120
(ZIP Code)
(ZIP Code)

Title of each class
Title of each class
Common Stock, par value $0.10 per share
Common Stock, par value $0.10 per share
0.450% Notes due 2025
0.450% Notes due 2025
1.625% Notes due 2027
1.625% Notes due 2027
0.450% Notes due 2029
0.450% Notes due 2029
1.300% Notes due 2031
1.300% Notes due 2031
0.950% Notes due 2033
0.950% Notes due 2033

Registrant’s telephone number, including area code: (901) 818-7500
Registrant’s telephone number, including area code: (901) 818-7500
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(b) of the Act:
Trading Symbol
Trading Symbol

FDX
FDX
FDX 25A
FDX 25A
FDX 27
FDX 27
FDX 29A
FDX 29A
FDX 31
FDX 31
FDX 33
FDX 33
Securities registered pursuant to Section 12(g) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Name of each exchange on which registered
Name of each exchange on which registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☑
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☑
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☑ No ☐
Yes ☑ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§

232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☑ No ☐
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☑ No ☐

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

Smaller reporting company ☐
Smaller reporting company ☐

Accelerated filer ☐
Accelerated filer ☐

Non-accelerated filer ☐
Non-accelerated filer ☐

Emerging growth company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐�
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐�

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial

reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑�
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑�

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The aggregate market value of the common stock held by non-affiliates of the Registrant, computed by reference to the closing price as of the last business day of the
The aggregate market value of the common stock held by non-affiliates of the Registrant, computed by reference to the closing price as of the last business day of the

Registrant’s most recently completed second fiscal quarter, November 30, 2020, was approximately $70.2 billion. The Registrant has no non-voting stock.
Registrant’s most recently completed second fiscal quarter, November 30, 2020, was approximately $70.2 billion. The Registrant has no non-voting stock.

As of July 15, 2021, 267,348,232 shares of the Registrant’s common stock were outstanding.
As of July 15, 2021, 267,348,232 shares of the Registrant’s common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement to be delivered to stockholders in connection with the 2021 annual meeting of stockholders to be held on
Portions of the Registrant’s definitive proxy statement to be delivered to stockholders in connection with the 2021 annual meeting of stockholders to be held on

September 27, 2021 are incorporated by reference in response to Part III of this Report.
September 27, 2021 are incorporated by reference in response to Part III of this Report.

FORWARD-LOOKING STATEMENTS
FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-K (this “Annual Report”), including (but not limited to) those contained in “Item
Certain statements in this Annual Report on Form 10-K (this “Annual Report”), including (but not limited to) those contained in “Item
1. Business;” “Item 1A. Risk Factors;” “Item 2. Properties;” “Item 5. Market for Registrant’s Common Equity, Related Stockholder
1. Business;” “Item 1A. Risk Factors;” “Item 2. Properties;” “Item 5. Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities;” the “Impact of the COVID-19 Pandemic,” “Business Realignment Costs,”
Matters and Issuer Purchases of Equity Securities;” the “Impact of the COVID-19 Pandemic,” “Business Realignment Costs,”
“Income Taxes,” “Outlook” (including segment outlooks), “Liquidity Outlook,” “Contractual Cash Obligations and Off-Balance Sheet
“Income Taxes,” “Outlook” (including segment outlooks), “Liquidity Outlook,” “Contractual Cash Obligations and Off-Balance Sheet
Arrangements,” and “Critical Accounting Estimates” sections of “Item 7. Management’s Discussion and Analysis of Results of
Arrangements,” and “Critical Accounting Estimates” sections of “Item 7. Management’s Discussion and Analysis of Results of
Operations and Financial Condition;” and the “Description of Business Segments and Summary of Significant Accounting Policies,”
Operations and Financial Condition;” and the “Description of Business Segments and Summary of Significant Accounting Policies,”
“Long-Term Debt and Other Financing Arrangements,” “Income Taxes,” “Retirement Plans,” “Commitments” and “Contingencies”
“Long-Term Debt and Other Financing Arrangements,” “Income Taxes,” “Retirement Plans,” “Commitments” and “Contingencies”
notes to the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” are “forward-looking”
notes to the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” are “forward-looking”
statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results
statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results
of operations, cash flows, plans, objectives, future performance and business. Forward-looking statements include those preceded by,
of operations, cash flows, plans, objectives, future performance and business. Forward-looking statements include those preceded by,
followed by or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “plans,”
followed by or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “plans,”
“estimates,” “targets,” “projects,” “intends” or similar expressions. These forward-looking statements involve risks and uncertainties.
“estimates,” “targets,” “projects,” “intends” or similar expressions. These forward-looking statements involve risks and uncertainties.
Actual results may differ materially from those contemplated (expressed or implied) by such forward-looking statements, because of,
Actual results may differ materially from those contemplated (expressed or implied) by such forward-looking statements, because of,
among other things, the risk factors identified above and the other risks and uncertainties you can find in our press releases and other
among other things, the risk factors identified above and the other risks and uncertainties you can find in our press releases and other
Securities and Exchange Commission (“SEC”) filings.
Securities and Exchange Commission (“SEC”) filings.

TABLE OF CONTENTS

PART I

ITEM 1. Business

ITEM 1A. Risk Factors

ITEM 1B. Unresolved Staff Comments

ITEM 2. Properties

ITEM 3. Legal Proceedings

ITEM 4. Mine Safety Disclosures

Information about our Executive Officers

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

ITEM 6. Selected Financial Data

ITEM 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

ITEM 8. Financial Statements and Supplementary Data

ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

ITEM 9A. Controls and Procedures

ITEM 9B. Other Information

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

ITEM 10. Directors, Executive Officers and Corporate Governance

ITEM 11. Executive Compensation

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

ITEM 13. Certain Relationships and Related Transactions, and Director Independence

ITEM 14. Principal Accountant Fees and Services

ITEM 15. Exhibits and Financial Statement Schedules

ITEM 16. Form 10-K Summary

Page

116

117

118

127

PART II

PART III

PART IV

- 1 -

FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-K (this “Annual Report”), including (but not limited to) those contained in “Item

1. Business;” “Item 1A. Risk Factors;” “Item 2. Properties;” “Item 5. Market for Registrant’s Common Equity, Related Stockholder

Matters and Issuer Purchases of Equity Securities;” the “Impact of the COVID-19 Pandemic,” “Business Realignment Costs,”

“Income Taxes,” “Outlook” (including segment outlooks), “Liquidity Outlook,” “Contractual Cash Obligations and Off-Balance Sheet

Arrangements,” and “Critical Accounting Estimates” sections of “Item 7. Management’s Discussion and Analysis of Results of

Operations and Financial Condition;” and the “Description of Business Segments and Summary of Significant Accounting Policies,”

“Long-Term Debt and Other Financing Arrangements,” “Income Taxes,” “Retirement Plans,” “Commitments” and “Contingencies”

notes to the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” are “forward-looking”

statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results

of operations, cash flows, plans, objectives, future performance and business. Forward-looking statements include those preceded by,

followed by or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “plans,”

“estimates,” “targets,” “projects,” “intends” or similar expressions. These forward-looking statements involve risks and uncertainties.

Actual results may differ materially from those contemplated (expressed or implied) by such forward-looking statements, because of,

among other things, the risk factors identified above and the other risks and uncertainties you can find in our press releases and other

Securities and Exchange Commission (“SEC”) filings.

As a result of these and other factors, no assurance can be given as to our future results and achievements. Accordingly, a forward-

looking statement is neither a prediction nor a guarantee of future events or circumstances and those future events or circumstances

may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this report.

We are under no obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a

result of new information, future events or otherwise.

TABLE OF CONTENTS
TABLE OF CONTENTS

PART I
PART I

ITEM 1. Business
ITEM 1. Business
ITEM 1A. Risk Factors
ITEM 1A. Risk Factors
ITEM 1B. Unresolved Staff Comments
ITEM 1B. Unresolved Staff Comments
ITEM 2. Properties
ITEM 2. Properties
ITEM 3. Legal Proceedings
ITEM 3. Legal Proceedings
ITEM 4. Mine Safety Disclosures
ITEM 4. Mine Safety Disclosures
Information about our Executive Officers
Information about our Executive Officers

PART II
PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
ITEM 6. Selected Financial Data
ITEM 6. Selected Financial Data
ITEM 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition
ITEM 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 8. Financial Statements and Supplementary Data
ITEM 8. Financial Statements and Supplementary Data
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
ITEM 9A. Controls and Procedures
ITEM 9A. Controls and Procedures
ITEM 9B. Other Information
ITEM 9B. Other Information

PART III
PART III

ITEM 10. Directors, Executive Officers and Corporate Governance
ITEM 10. Directors, Executive Officers and Corporate Governance
ITEM 11. Executive Compensation
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
ITEM 14. Principal Accountant Fees and Services
ITEM 14. Principal Accountant Fees and Services

ITEM 15. Exhibits and Financial Statement Schedules
ITEM 15. Exhibits and Financial Statement Schedules
ITEM 16. Form 10-K Summary
ITEM 16. Form 10-K Summary

PART IV
PART IV

Page
Page

3
3
23
23
34
34
34
34
38
38
38
38
39
39

41
41
41
41
41
41
73
73
74
74
116
116
116
116
116
116

117
117
117
117
117
117
117
117
117
117

118
118
127
127

- 1 -
- 1 -

EXHIBITS
EXHIBITS

PART I

Exhibit 4.1
Exhibit 4.1
Exhibit 10.44
Exhibit 10.44
Exhibit 10.68
Exhibit 10.68
Exhibit 10.69
Exhibit 10.69
Exhibit 10.70
Exhibit 10.70
Exhibit 21
Exhibit 21
Exhibit 22
Exhibit 22
Exhibit 23
Exhibit 23
Exhibit 24
Exhibit 24
Exhibit 31.1
Exhibit 31.1
Exhibit 31.2
Exhibit 31.2
Exhibit 32.1
Exhibit 32.1
Exhibit 32.2
Exhibit 32.2
Exhibit 101.1 Interactive Date Files
Exhibit 101.1 Interactive Date Files
Exhibit 104 Cover Page Interactive Data File
Exhibit 104 Cover Page Interactive Data File

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 a broad portfolio of transportation, e-commerce and business

services through operating companies competing collectively, operating collaboratively and innovating digitally, under the respected

FedEx brand. These companies are included in the following reportable business segments:

• FedEx Express: Federal Express Corporation (“FedEx Express”) is the world’s largest express transportation company,

offering time-definite delivery to more than 220 countries and territories, connecting markets that comprise more than 99% of

the world’s gross domestic product.

• FedEx Ground: FedEx Ground Package System, Inc. (“FedEx Ground”) is a leading North American provider of small-

package ground delivery services. FedEx Ground provides low-cost, day-certain service to any business address in the U.S.

and Canada, as well as residential delivery to 100% of U.S. residences through its FedEx Home Delivery service. FedEx

Ground Economy specializes in the consolidation and delivery of high volumes of low-weight, less time-sensitive business-to-

consumer packages.

• FedEx Freight: FedEx Freight Corporation (“FedEx Freight”) is a leading North American provider of less-than-truckload

(“LTL”) freight services across all lengths of haul to businesses and residences. Within the contiguous U.S., FedEx Freight

offers FedEx Freight Priority, when speed is critical to meet a customer’s supply chain needs; FedEx Freight Economy, when

a customer can trade time for cost savings; and FedEx Freight Direct, a service to meet the needs of the growing e-commerce

market for delivery of heavy, bulky products to or through the door for residences and businesses. FedEx Freight also offers

freight delivery service to most points in Puerto Rico and the U.S. Virgin Islands.

• FedEx Services: FedEx Corporate Services, Inc. (“FedEx Services”) provides sales, marketing, information technology,

communications, customer service, technical support, billing and collection services, and certain back-office functions that

support our operating segments.

The FedEx Office and Print Services, Inc. (“FedEx Office”) operating segment provides document and business services and retail

access to our package transportation businesses. Additionally, the FedEx Logistics, Inc. (“FedEx Logistics”) operating segment

provides customs brokerage and global ocean and air freight forwarding through FedEx Trade Networks Transport & Brokerage, Inc.

(“FedEx Trade Networks Transport & Brokerage”) and integrated supply chain management solutions through FedEx Supply Chain

Distribution System, Inc. (“FedEx Supply Chain”). FedEx Office and FedEx Logistics are included in “Corporate, other and

eliminations” in our segment reporting. For more information about FedEx Office and FedEx Logistics, please see “FedEx Office

Operating Segment” and “FedEx Logistics Operating Segment.”

For more information about our reportable segments, please see “Business Segments.” For financial information concerning our

reportable segments, 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.

The coronavirus (“COVID-19”) pandemic continues to have a profound impact on our industry. As an essential business, FedEx has

kept the world’s healthcare, industrial and at-home supply chains moving while maintaining the safety of our team members, our

customers and the communities in which we operate as our top priority. For more information about the COVID-19 pandemic and its

effect on FedEx’s business, results of operations and financial condition, see “Item 1A. Risk Factors” and “Item 7. Management’s

Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report.

Our website is located at fedex.com. Detailed information about our services, e-commerce tools and solutions, and citizenship efforts

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 amendments to such reports available, free of charge, through our website, as soon as reasonably

practicable after 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.

- 2 -
- 2 -

- 3 -

Exhibit 4.1

Exhibit 10.44

Exhibit 10.68

Exhibit 10.69

Exhibit 10.70

Exhibit 21

Exhibit 22

Exhibit 23

Exhibit 24

Exhibit 31.1

Exhibit 31.2

Exhibit 32.1

Exhibit 32.2

Exhibit 101.1 Interactive Date Files

Exhibit 104 Cover Page Interactive Data File

EXHIBITS

PART I
PART I

ITEM 1. BUSINESS
ITEM 1. BUSINESS

Overview
Overview

FedEx Corporation (“FedEx”) was incorporated in Delaware on October 2, 1997 to serve as the parent holding company and provide
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 a broad portfolio of transportation, e-commerce and business
strategic direction to the FedEx portfolio of companies. FedEx provides a broad portfolio of transportation, e-commerce and business
services through operating companies competing collectively, operating collaboratively and innovating digitally, under the respected
services through operating companies competing collectively, operating collaboratively and innovating digitally, under the respected
FedEx brand. These companies are included in the following reportable business segments:
FedEx brand. These companies are included in the following reportable business segments:

• FedEx Express: Federal Express Corporation (“FedEx Express”) is the world’s largest express transportation company,
• FedEx Express: Federal Express Corporation (“FedEx Express”) is the world’s largest express transportation company,

offering time-definite delivery to more than 220 countries and territories, connecting markets that comprise more than 99% of
offering time-definite delivery to more than 220 countries and territories, connecting markets that comprise more than 99% of
the world’s gross domestic product.
the world’s gross domestic product.

• FedEx Ground: FedEx Ground Package System, Inc. (“FedEx Ground”) is a leading North American provider of small-
• FedEx Ground: FedEx Ground Package System, Inc. (“FedEx Ground”) is a leading North American provider of small-

package ground delivery services. FedEx Ground provides low-cost, day-certain service to any business address in the U.S.
package ground delivery services. FedEx Ground provides low-cost, day-certain service to any business address in the U.S.
and Canada, as well as residential delivery to 100% of U.S. residences through its FedEx Home Delivery service. FedEx
and Canada, as well as residential delivery to 100% of U.S. residences through its FedEx Home Delivery service. FedEx
Ground Economy specializes in the consolidation and delivery of high volumes of low-weight, less time-sensitive business-to-
Ground Economy specializes in the consolidation and delivery of high volumes of low-weight, less time-sensitive business-to-
consumer packages.
consumer packages.

• FedEx Freight: FedEx Freight Corporation (“FedEx Freight”) is a leading North American provider of less-than-truckload
• FedEx Freight: FedEx Freight Corporation (“FedEx Freight”) is a leading North American provider of less-than-truckload
(“LTL”) freight services across all lengths of haul to businesses and residences. Within the contiguous U.S., FedEx Freight
(“LTL”) freight services across all lengths of haul to businesses and residences. Within the contiguous U.S., FedEx Freight
offers FedEx Freight Priority, when speed is critical to meet a customer’s supply chain needs; FedEx Freight Economy, when
offers FedEx Freight Priority, when speed is critical to meet a customer’s supply chain needs; FedEx Freight Economy, when
a customer can trade time for cost savings; and FedEx Freight Direct, a service to meet the needs of the growing e-commerce
a customer can trade time for cost savings; and FedEx Freight Direct, a service to meet the needs of the growing e-commerce
market for delivery of heavy, bulky products to or through the door for residences and businesses. FedEx Freight also offers
market for delivery of heavy, bulky products to or through the door for residences and businesses. FedEx Freight also offers
freight delivery service to most points in Puerto Rico and the U.S. Virgin Islands.
freight delivery service to most points in Puerto Rico and the U.S. Virgin Islands.

• FedEx Services: FedEx Corporate Services, Inc. (“FedEx Services”) provides sales, marketing, information technology,
• FedEx Services: FedEx Corporate Services, Inc. (“FedEx Services”) provides sales, marketing, information technology,

communications, customer service, technical support, billing and collection services, and certain back-office functions that
communications, customer service, technical support, billing and collection services, and certain back-office functions that
support our operating segments.
support our operating segments.

The FedEx Office and Print Services, Inc. (“FedEx Office”) operating segment provides document and business services and retail
The FedEx Office and Print Services, Inc. (“FedEx Office”) operating segment provides document and business services and retail
access to our package transportation businesses. Additionally, the FedEx Logistics, Inc. (“FedEx Logistics”) operating segment
access to our package transportation businesses. Additionally, the FedEx Logistics, Inc. (“FedEx Logistics”) operating segment
provides customs brokerage and global ocean and air freight forwarding through FedEx Trade Networks Transport & Brokerage, Inc.
provides customs brokerage and global ocean and air freight forwarding through FedEx Trade Networks Transport & Brokerage, Inc.
(“FedEx Trade Networks Transport & Brokerage”) and integrated supply chain management solutions through FedEx Supply Chain
(“FedEx Trade Networks Transport & Brokerage”) and integrated supply chain management solutions through FedEx Supply Chain
Distribution System, Inc. (“FedEx Supply Chain”). FedEx Office and FedEx Logistics are included in “Corporate, other and
Distribution System, Inc. (“FedEx Supply Chain”). FedEx Office and FedEx Logistics are included in “Corporate, other and
eliminations” in our segment reporting. For more information about FedEx Office and FedEx Logistics, please see “FedEx Office
eliminations” in our segment reporting. For more information about FedEx Office and FedEx Logistics, please see “FedEx Office
Operating Segment” and “FedEx Logistics Operating Segment.”
Operating Segment” and “FedEx Logistics Operating Segment.”

For more information about our reportable segments, please see “Business Segments.” For financial information concerning our
For more information about our reportable segments, please see “Business Segments.” For financial information concerning our
reportable segments, refer to “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” and
reportable segments, 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.
“Item 8. Financial Statements and Supplementary Data” of this Annual Report.

The coronavirus (“COVID-19”) pandemic continues to have a profound impact on our industry. As an essential business, FedEx has
The coronavirus (“COVID-19”) pandemic continues to have a profound impact on our industry. As an essential business, FedEx has
kept the world’s healthcare, industrial and at-home supply chains moving while maintaining the safety of our team members, our
kept the world’s healthcare, industrial and at-home supply chains moving while maintaining the safety of our team members, our
customers and the communities in which we operate as our top priority. For more information about the COVID-19 pandemic and its
customers and the communities in which we operate as our top priority. For more information about the COVID-19 pandemic and its
effect on FedEx’s business, results of operations and financial condition, see “Item 1A. Risk Factors” and “Item 7. Management’s
effect on FedEx’s business, results of operations and financial condition, see “Item 1A. Risk Factors” and “Item 7. Management’s
Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report.
Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report.

Our website is located at fedex.com. Detailed information about our services, e-commerce tools and solutions, and citizenship efforts
Our website is located at fedex.com. Detailed information about our services, e-commerce tools and solutions, and citizenship efforts
can be found on our website. In addition, we make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
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 amendments to such reports available, free of charge, through our website, as soon as reasonably
Reports on Form 8-K and all amendments to such reports available, free of charge, through our website, as soon as reasonably
practicable after they are filed with or furnished to the SEC. The Investor Relations page of our website, investors.fedex.com, contains
practicable after 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
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
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
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
information is posted. The information on our website, however, is not incorporated by reference in, and does not form part of, this
Annual Report.
Annual Report.

- 2 -

- 3 -
- 3 -

Except as otherwise specified, any reference to a year indicates our fiscal year ended May 31 of the year referenced. References to our
Except as otherwise specified, any reference to a year indicates our fiscal year ended May 31 of the year referenced. References to our
transportation segments include, collectively, the FedEx Express segment, the FedEx Ground segment, and the FedEx Freight
transportation segments include, collectively, the FedEx Express segment, the FedEx Ground segment, and the FedEx Freight
segment.
segment.

Strategy
Strategy

At FedEx, we are building “the network for what’s next.” Our new strategic operating principles unveiled during 2021, “compete
At FedEx, we are building “the network for what’s next.” Our new strategic operating principles unveiled during 2021, “compete
collectively, operate collaboratively, innovate digitally,” guide how we grow, execute and evolve as a company and help differentiate
collectively, operate collaboratively, innovate digitally,” guide how we grow, execute and evolve as a company and help differentiate
FedEx from our competitors.
FedEx from our competitors.

The collective FedEx brand unites our distinct operating companies, giving us our competitive edge. Further, our strategy allows us to
The collective FedEx brand unites our distinct operating companies, giving 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
manage our business as a portfolio, in the long-term best interest of the enterprise. As a result, we base decisions on capital
investment, expansion of delivery, information technology and retail networks, and service additions or enhancements upon achieving
investment, expansion of delivery, information technology and retail networks, and service additions or enhancements upon achieving
the highest overall long-term return on capital for our business as a whole. For each FedEx operating company, we focus on making
the highest overall long-term return on capital for our business as a whole. For each FedEx operating company, we focus on making
appropriate investments in the technology and assets necessary to optimize our long-term earnings performance and cash flow. Our
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 sizing our operating companies to align with varying macroeconomic conditions and
business strategy also provides flexibility in sizing our operating companies to align with varying macroeconomic conditions and
customer demand for the market segments in which they operate, allowing us to leverage and manage change. Volatility, uncertainty
customer demand for the market segments in which they operate, allowing us to leverage and manage change. Volatility, uncertainty
and evolution have become the norms in the global transportation market, and we are able to use our flexibility to accommodate
and evolution 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, including the continued growth of e-commerce. To that end, we continue to modernize
changing conditions in the global economy, including the continued growth of e-commerce. To that end, we continue to modernize
our aircraft fleet with more fuel efficient and lower-emission aircraft, expand our operations at FedEx Ground where we continue to
our aircraft fleet with more fuel efficient and lower-emission aircraft, expand our operations at FedEx Ground where we continue to
see growing package volumes, realign our systems and develop innovative service offerings.
see growing package volumes, realign our systems and develop innovative service offerings.

While we believe that operating independent networks, each focused on its own respective markets, enhances service quality and
While we believe that operating independent networks, each focused on its own respective markets, enhances service quality and
reliability from each business unit, we are building a holistic, collaborative approach to compete in a dynamic and ever-changing
reliability from each business unit, we are building a holistic, collaborative approach to compete in a dynamic and ever-changing
market. By operating collaboratively, we help ensure that we have the right package in the right network and at the right cost-to-serve.
market. By operating collaboratively, we help ensure that we have the right package in the right network and at the right cost-to-serve.
For example, last-mile optimization, the delivery of certain U.S. day-definite FedEx Express packages by FedEx Ground, allows us to
For example, last-mile optimization, the delivery of certain U.S. day-definite FedEx Express packages by FedEx Ground, allows us to
increase efficiency and lower our cost-to-serve. Additionally, FedEx Freight is providing road and intermodal support for both FedEx
increase efficiency and lower our cost-to-serve. Additionally, FedEx Freight is providing road and intermodal support for both FedEx
Ground and FedEx Express, and FedEx Express is working with FedEx Logistics to secure air charters for U.S. customers.
Ground and FedEx Express, and FedEx Express is working with FedEx Logistics to secure air charters for U.S. customers.

Innovation inspired our start at FedEx nearly 50 years ago, and it is fueling our future. The size and scale of our network gives us key
Innovation inspired our start at FedEx nearly 50 years ago, and it is fueling our future. The size and scale of our 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,
insights into global supply chains and trends. This foundation provides an immense amount of data we can use to build better insights,
increase visibility and improve the customer experience. To fully harness the power of this data, during 2021 we launched FedEx
increase visibility and improve the customer experience. To fully harness the power of this data, during 2021 we launched FedEx
Dataworks, a new organization focused on putting our data into context and using it to transform the digital and physical experiences
Dataworks, a new organization focused on putting our data into context and using it to transform the digital and physical experiences
of our customers and team members. We are also increasing capabilities and products through sensor-based technologies and
of our customers and team members. We are also increasing capabilities and products through sensor-based technologies and
providing enhanced visibility and predictive capabilities. See “FedEx Services Segment — Customer-Driven Technology” below for
providing enhanced visibility and predictive capabilities. See “FedEx Services Segment — Customer-Driven Technology” below for
more information on FedEx SenseAware ID, FedEx Surround and other FedEx innovations.
more information on FedEx SenseAware ID, FedEx Surround and other FedEx innovations.

At FedEx, “Safety Above All” is the first and foremost value in every aspect of our business. We are committed to making our
At FedEx, “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
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.
work through rigorous policies, continual education and engagement and investments in technology designed to prevent accidents.

Additionally, by focusing on the following three key areas, we believe we will continue to uniquely position FedEx for long-term
Additionally, by focusing on the following three key areas, we believe we will continue to uniquely position FedEx for long-term
success:
success:

• E-commerce: The acceleration of trends experienced in 2021 in response to the COVID-19 pandemic highlights the
• E-commerce: The acceleration of trends experienced in 2021 in response to the COVID-19 pandemic highlights the

importance of our ongoing strategic e-commerce initiatives, which include FedEx Ground seven-day-per-week residential U.S
importance of our ongoing strategic e-commerce initiatives, which include FedEx Ground seven-day-per-week residential U.S
delivery coverage; investing in technologies to optimize last-mile deliveries; expanding capabilities to better handle large
delivery coverage; investing in technologies to optimize last-mile deliveries; expanding capabilities to better handle large
items; offering FedEx Freight Direct, the first FedEx-branded through-the-door service; and accelerating the expansion of our
items; offering FedEx Freight Direct, the first FedEx-branded through-the-door service; and accelerating the expansion of our
retail convenience network.
retail convenience network.

• Operational Excellence: Our competitive advantage in the marketplace is fueled by a keen focus on operational excellence
• Operational Excellence: Our competitive advantage in the marketplace is fueled by a keen focus on operational excellence

and customer service. We are strategically focused on efficiency and continued investments in people, capacity and
and customer service. We are strategically focused on efficiency and continued investments in people, capacity and
technology to optimize our networks.
technology to optimize our networks.

• Digital Innovation: We are reimagining our digital capabilities and infrastructure in a manner that we believe will deliver
• Digital Innovation: We are reimagining our digital capabilities and infrastructure in a manner that we believe will deliver
enhanced customer experiences that are simple, personal and proactive. Additionally, we are continually investing in
enhanced customer experiences that are simple, personal and proactive. Additionally, we are continually investing in
automation and other technologies to safely, efficiently and sustainably handle the growing volume of shipments that flow
automation and other technologies to safely, efficiently and sustainably handle the growing volume of shipments that flow
through our network each day.
through our network each day.

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 companies

and team members to facilitate and capitalize on this access and to achieve stronger long-term growth, productivity and profitability.

During 2021 and early 2022, we have introduced a number of innovative solutions, advanced important long-term business initiatives

and made other important investments that benefit our customers, team members and communities, including:

• Delivering COVID-19 vaccines, critical personal protective equipment and medical supplies, and providing other

transportation and logistics support to humanitarian relief agencies as they respond to the pandemic.

• Committing to achieve carbon neutrality for our global operations by calendar 2040 and helping establish the Yale Center for

Natural Carbon Capture to advance sequestration solutions.

• Launching FedEx Dataworks and acquiring ShopRunner, Inc. (“ShopRunner”), an e-commerce platform that directly connects

brands and merchants with online shoppers. Additionally, we announced a new multi-year collaboration with Adobe, starting

with the integration of ShopRunner with Adobe Commerce’s Magento platform, which we expect will be available to Adobe

merchants in late calendar 2021.

•

Introducing new technologies such as SenseAware ID, a lightweight sensor-based logistics device that provides real-time

updates on a package’s location within the FedEx Express network, and exploring the use of autonomous technologies with

ongoing testing of Roxo, the FedEx SameDay Bot, and a multi-year, multi-phase agreement to test Nuro’s next-generation

autonomous vehicle technology.

• Further collaborating between operating companies through last-mile optimization with FedEx Express and FedEx Ground,

which has expanded to more than 60 markets across the U.S., and other initiatives.

• Expanding FedEx Ground seven-day-per-week residential delivery coverage to virtually all of the U.S. population.

• Finalizing the rollout of dynamic route optimization technology at FedEx Ground, which provides service providers near real-

time data to plan efficient delivery routes.

• Completing the integration of FedEx Ground Economy (formerly FedEx SmartPost) packages previously given to the U.S.

Postal Service (“USPS”) into FedEx Ground standard operations.

• Adding new and expanded facilities and automation solutions to optimize FedEx Ground network capacity.

• Strengthening the FedEx Express international business by completing the integration of the FedEx Express and TNT Express

linehaul and pickup-and-delivery operations and introducing enhanced Europe-to-the-U.S. overnight and European e-

commerce services with FedEx International Priority Express and FedEx International Connect Plus.

• Continuing to grow our retail convenience network and digital e-commerce business, with significantly increased customer

usage of our FedEx Delivery Manager and FedEx Returns Technology offerings.

• Establishing a Diversity, Equity & Inclusion (“DEI”) Depot, an online platform to create more awareness of DEI-related

resources, events and team member stories across operating companies.

Reputation and Responsibility

By competing collectively under the FedEx brand, our operating companies benefit from one of the world’s most recognized brands.

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 2021, FedEx ranked 16th in FORTUNE magazine’s “World’s Most

Admired Companies” list — the 21st consecutive year FedEx has ranked among the top 20 in the FORTUNE Most Admired

Companies list, with 15 of those years ranking among the top 10. During 2021 FedEx was also named one of the “TIME100 Most

Influential Companies” by Time magazine and was recognized as the biggest transportation and logistics company in the world by

Forbes. Additionally, FedEx was named one of “America’s Most Responsible Companies” by Newsweek in 2021, ranking higher than

any other “Travel, Transport & Logistics” company included on the list.

Along with a strong reputation among customers and the general public, FedEx is widely acknowledged as a great place to work. For

example, FedEx was listed as one of “America’s Best Large Employers” and one of “America’s Best Employers for Diversity” by

Forbes in 2021.

- 4 -
- 4 -

- 5 -

Except as otherwise specified, any reference to a year indicates our fiscal year ended May 31 of the year referenced. References to our

transportation segments include, collectively, the FedEx Express segment, the FedEx Ground segment, and the FedEx Freight

Through our global transportation, information technology and retail networks, we help to facilitate an ongoing and unprecedented
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-
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
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 companies
largest all-cargo air fleet and connects more than 99% of the world’s gross domestic product. We continue to position our companies
and team members to facilitate and capitalize on this access and to achieve stronger long-term growth, productivity and profitability.
and team members to facilitate and capitalize on this access and to achieve stronger long-term growth, productivity and profitability.

At FedEx, we are building “the network for what’s next.” Our new strategic operating principles unveiled during 2021, “compete

collectively, operate collaboratively, innovate digitally,” guide how we grow, execute and evolve as a company and help differentiate

During 2021 and early 2022, we have introduced a number of innovative solutions, advanced important long-term business initiatives
During 2021 and early 2022, we have introduced a number of innovative solutions, advanced important long-term business initiatives
and made other important investments that benefit our customers, team members and communities, including:
and made other important investments that benefit our customers, team members and communities, including:

The collective FedEx brand unites our distinct operating companies, giving us our competitive edge. Further, our strategy allows us to

transportation and logistics support to humanitarian relief agencies as they respond to the pandemic.
transportation and logistics support to humanitarian relief agencies as they respond to the pandemic.

• Delivering COVID-19 vaccines, critical personal protective equipment and medical supplies, and providing other
• Delivering COVID-19 vaccines, critical personal protective equipment and medical supplies, and providing other

segment.

Strategy

FedEx from our competitors.

manage our business as a portfolio, in the long-term best interest of the enterprise. As a result, we base decisions on capital

investment, expansion of delivery, information technology and retail networks, and service additions or enhancements upon achieving

the highest overall long-term return on capital for our business as a whole. For each FedEx operating company, 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 sizing our operating companies to align with varying macroeconomic conditions and

customer demand for the market segments in which they operate, allowing us to leverage and manage change. Volatility, uncertainty

and evolution 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, including the continued growth of e-commerce. To that end, we continue to modernize

our aircraft fleet with more fuel efficient and lower-emission aircraft, expand our operations at FedEx Ground where we continue to

see growing package volumes, realign our systems and develop innovative service offerings.

While we believe that operating independent networks, each focused on its own respective markets, enhances service quality and

reliability from each business unit, we are building a holistic, collaborative approach to compete in a dynamic and ever-changing

market. By operating collaboratively, we help ensure that we have the right package in the right network and at the right cost-to-serve.

For example, last-mile optimization, the delivery of certain U.S. day-definite FedEx Express packages by FedEx Ground, allows us to

increase efficiency and lower our cost-to-serve. Additionally, FedEx Freight is providing road and intermodal support for both FedEx

Ground and FedEx Express, and FedEx Express is working with FedEx Logistics to secure air charters for U.S. customers.

Innovation inspired our start at FedEx nearly 50 years ago, and it is fueling our future. The size and scale of our 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,

increase visibility and improve the customer experience. To fully harness the power of this data, during 2021 we launched FedEx

Dataworks, a new organization focused on putting our data into context and using it to transform the digital and physical experiences

of our customers and team members. We are also increasing capabilities and products through sensor-based technologies and

providing enhanced visibility and predictive capabilities. See “FedEx Services Segment — Customer-Driven Technology” below for

more information on FedEx SenseAware ID, FedEx Surround and other FedEx innovations.

At FedEx, “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.

success:

• E-commerce: The acceleration of trends experienced in 2021 in response to the COVID-19 pandemic highlights the

importance of our ongoing strategic e-commerce initiatives, which include FedEx Ground seven-day-per-week residential U.S

delivery coverage; investing in technologies to optimize last-mile deliveries; expanding capabilities to better handle large

items; offering FedEx Freight Direct, the first FedEx-branded through-the-door service; and accelerating the expansion of our

retail convenience network.

• Operational Excellence: Our competitive advantage in the marketplace is fueled by a keen focus on operational excellence

and customer service. We are strategically focused on efficiency and continued investments in people, capacity and

technology to optimize our networks.

• Digital Innovation: We are reimagining our digital capabilities and infrastructure in a manner that we believe will deliver

enhanced customer experiences that are simple, personal and proactive. Additionally, we are continually investing in

automation and other technologies to safely, efficiently and sustainably handle the growing volume of shipments that flow

through our network each day.

• Committing to achieve carbon neutrality for our global operations by calendar 2040 and helping establish the Yale Center for
• Committing to achieve carbon neutrality for our global operations by calendar 2040 and helping establish the Yale Center for

Natural Carbon Capture to advance sequestration solutions.
Natural Carbon Capture to advance sequestration solutions.

• Launching FedEx Dataworks and acquiring ShopRunner, Inc. (“ShopRunner”), an e-commerce platform that directly connects
• Launching FedEx Dataworks and acquiring ShopRunner, Inc. (“ShopRunner”), an e-commerce platform that directly connects
brands and merchants with online shoppers. Additionally, we announced a new multi-year collaboration with Adobe, starting
brands and merchants with online shoppers. Additionally, we announced a new multi-year collaboration with Adobe, starting
with the integration of ShopRunner with Adobe Commerce’s Magento platform, which we expect will be available to Adobe
with the integration of ShopRunner with Adobe Commerce’s Magento platform, which we expect will be available to Adobe
merchants in late calendar 2021.
merchants in late calendar 2021.

•
•

Introducing new technologies such as SenseAware ID, a lightweight sensor-based logistics device that provides real-time
Introducing new technologies such as SenseAware ID, a lightweight sensor-based logistics device that provides real-time
updates on a package’s location within the FedEx Express network, and exploring the use of autonomous technologies with
updates on a package’s location within the FedEx Express network, and exploring the use of autonomous technologies with
ongoing testing of Roxo, the FedEx SameDay Bot, and a multi-year, multi-phase agreement to test Nuro’s next-generation
ongoing testing of Roxo, the FedEx SameDay Bot, and a multi-year, multi-phase agreement to test Nuro’s next-generation
autonomous vehicle technology.
autonomous vehicle technology.

• Further collaborating between operating companies through last-mile optimization with FedEx Express and FedEx Ground,
• Further collaborating between operating companies through last-mile optimization with FedEx Express and FedEx Ground,

which has expanded to more than 60 markets across the U.S., and other initiatives.
which has expanded to more than 60 markets across the U.S., and other initiatives.

• Expanding FedEx Ground seven-day-per-week residential delivery coverage to virtually all of the U.S. population.
• Expanding FedEx Ground seven-day-per-week residential delivery coverage to virtually all of the U.S. population.

• Finalizing the rollout of dynamic route optimization technology at FedEx Ground, which provides service providers near real-
• Finalizing the rollout of dynamic route optimization technology at FedEx Ground, which provides service providers near real-

time data to plan efficient delivery routes.
time data to plan efficient delivery routes.

• Completing the integration of FedEx Ground Economy (formerly FedEx SmartPost) packages previously given to the U.S.
• Completing the integration of FedEx Ground Economy (formerly FedEx SmartPost) packages previously given to the U.S.

Postal Service (“USPS”) into FedEx Ground standard operations.
Postal Service (“USPS”) into FedEx Ground standard operations.

• Adding new and expanded facilities and automation solutions to optimize FedEx Ground network capacity.
• Adding new and expanded facilities and automation solutions to optimize FedEx Ground network capacity.

• Strengthening the FedEx Express international business by completing the integration of the FedEx Express and TNT Express
• Strengthening the FedEx Express international business by completing the integration of the FedEx Express and TNT Express

linehaul and pickup-and-delivery operations and introducing enhanced Europe-to-the-U.S. overnight and European e-
linehaul and pickup-and-delivery operations and introducing enhanced Europe-to-the-U.S. overnight and European e-
commerce services with FedEx International Priority Express and FedEx International Connect Plus.
commerce services with FedEx International Priority Express and FedEx International Connect Plus.

• Continuing to grow our retail convenience network and digital e-commerce business, with significantly increased customer
• Continuing to grow our retail convenience network and digital e-commerce business, with significantly increased customer

Additionally, by focusing on the following three key areas, we believe we will continue to uniquely position FedEx for long-term

usage of our FedEx Delivery Manager and FedEx Returns Technology offerings.
usage of our FedEx Delivery Manager and FedEx Returns Technology offerings.

• Establishing a Diversity, Equity & Inclusion (“DEI”) Depot, an online platform to create more awareness of DEI-related
• Establishing a Diversity, Equity & Inclusion (“DEI”) Depot, an online platform to create more awareness of DEI-related

resources, events and team member stories across operating companies.
resources, events and team member stories across operating companies.

Reputation and Responsibility
Reputation and Responsibility

By competing collectively under the FedEx brand, our operating companies benefit from one of the world’s most recognized brands.
By competing collectively under the FedEx brand, our operating companies benefit from one of the world’s most recognized brands.
FedEx is one of the most trusted and respected companies in the world, and the FedEx brand name is a powerful sales and marketing
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 2021, FedEx ranked 16th in FORTUNE magazine’s “World’s Most
tool. Among the many reputation awards we received during 2021, FedEx ranked 16th in FORTUNE magazine’s “World’s Most
Admired Companies” list — the 21st consecutive year FedEx has ranked among the top 20 in the FORTUNE Most Admired
Admired Companies” list — the 21st consecutive year FedEx has ranked among the top 20 in the FORTUNE Most Admired
Companies list, with 15 of those years ranking among the top 10. During 2021 FedEx was also named one of the “TIME100 Most
Companies list, with 15 of those years ranking among the top 10. During 2021 FedEx was also named one of the “TIME100 Most
Influential Companies” by Time magazine and was recognized as the biggest transportation and logistics company in the world by
Influential Companies” by Time magazine and was recognized as the biggest transportation and logistics company in the world by
Forbes. Additionally, FedEx was named one of “America’s Most Responsible Companies” by Newsweek in 2021, ranking higher than
Forbes. Additionally, FedEx was named one of “America’s Most Responsible Companies” by Newsweek in 2021, ranking higher than
any other “Travel, Transport & Logistics” company included on the list.
any other “Travel, Transport & Logistics” company included on the list.

Along with a strong reputation among customers and the general public, FedEx is widely acknowledged as a great place to work. For
Along with a strong reputation among customers and the general public, FedEx is widely acknowledged as a great place to work. For
example, FedEx was listed as one of “America’s Best Large Employers” and one of “America’s Best Employers for Diversity” by
example, FedEx was listed as one of “America’s Best Large Employers” and one of “America’s Best Employers for Diversity” by
Forbes in 2021.
Forbes in 2021.

- 4 -

- 5 -
- 5 -

Through our environmental, social and governance (“ESG”) strategies, FedEx connects the communities where we live and work in
remarkable ways. Our 2021 ESG Report is available at fedex.com/en-us/sustainability/reports.html. This report discusses our ESG
strategies and programs and includes important goals and metrics that demonstrate our commitment to fulfilling our responsibilities in
these areas. Information in our ESG Report is not incorporated by reference in, and does not form part of, this Annual Report.

The COVID-19 pandemic took an unprecedented toll on the emotional and mental welfare of many. To support team members’
mental health, we offer 24/7 confidential counseling services to employees, eligible dependents and all household members, even if
they are not participating plan members. We frequently communicate with employees on how to access these resources to promote
their use across the enterprise, with an increased focus on mental health resources this year.

Human Resource Management

Our Culture

At FedEx, it is our people—our greatest asset—that give us our strong reputation and stand at the heart of our success. In addition to
our superior physical and information networks, FedEx has an exemplary human network. Across the globe, our 570,000 team
members are united by our passion to deliver the FedEx Purple Promise—to make every FedEx experience outstanding—and our
People–Service–Profit principles.

Our success depends on the talent, dedication and well-being of our people. As we grow, we strive to recruit, retain, develop and
provide advancement opportunities for our team members. We continually work to make FedEx an inclusive, equitable and growth-
focused workplace where all team members have the opportunity to flourish.

Safety

Our longstanding “Safety Above All” philosophy is the first and foremost value in every aspect of our business. It is backed by strict
policies, robust team member education, safety recognition awards and continued investment in technology. Across the enterprise, we
are committed to making our workplaces and communities safer for our team members, customers and the public. During the COVID-
19 pandemic, we implemented numerous measures to keep our team members, customers and communities safe while on the front
lines operating in impacted areas and providing connectivity and delivery of critical medical supplies around the world.

Diversity, Equity & Inclusion

We believe that DEI delivers a better future for all team members, customers, suppliers and
communities. As a global company, we see exceptional business and community value in the
diversity of perspectives and experiences that our team members bring to work every day. While
we are proud of what we have achieved during our almost 50-year history, we know that DEI must
always be at the forefront of our business strategy.

The FedEx workforce is as diverse as the world we serve, and we believe that everyone deserves
respect. We are committed to be a diverse, equitable and inclusive employer. This year, we added
the word equity to the title of our enterprise-wide efforts, formalizing our commitment to creating
a workplace where everyone has fair treatment and equal opportunity to succeed. We also
established four consistent, strategic pillars across our enterprise to frame our DEI work and share
our progress: Our People; Our Education and Engagement; Our Communities, Customers, and
Suppliers; and Our Story. While we provide a consistent framework for DEI, each operating
company structures and operationalizes its approach separately to account for regional differences
in regulations and cultures.

Compensation and Benefits

We provide our team members with competitive healthcare, wellness and other benefits to support
their quality of life and enable them to thrive in the workplace. In addition, we offer competitive
retirement benefits to eligible U.S. team members.

We conduct periodic benchmarking analyses to ensure our pay remains competitive. In addition,
FedEx regularly assesses internal pay equity. In each pay analysis, we adjust for job tenure,
region, performance and other variables that can influence pay over time.

All eligible full-time and part-time employees and their eligible dependents receive competitive
health benefits. In the U.S., we cover approximately 70% of total eligible health and disability
costs for part- and full-time employees at the plan level for our approximately 219,000
participating employees.

Learning and Development

As our team members commit to delivering the Purple Promise, we remain committed to providing all our people with learning and
development opportunities to advance their careers at FedEx. Training and development begins with our enterprise-wide content for
new employees—Core New Employee Orientation—which provides a consistent onboarding experience across our operating
companies on topics such as safety, security, compliance, sustainability and DEI. Beyond training opportunities, we provide ongoing
career development tools, opportunities and education for all full-time employees. Each operating company designs and manages its
own leadership and development programs in support of its unique needs.

We are committed to supporting team members who wish to pursue higher education in a variety of ways. In 2020, we provided over
$15 million in tuition assistance to nearly 10,000 employees to further their education. In addition, Learning inspired by FedEx
(LiFE)—a partnership between multiple FedEx operating companies and The University of Memphis—allows many employees the
opportunity to earn a tuition-free, fully online degree. Eligible employees include all U.S.-based FedEx Logistics and FedEx Trade
Networks Transport & Brokerage employees, all Memphis-based FedEx Supply Chain employees and FedEx Express employees at 16
major hub locations in the U.S.

Employee Engagement

We value feedback from our team members, looking to understand their concerns and expectations and, where possible, acting on
them. We provide several avenues to listen to and engage with our team, including annual surveys, employee networks and direct
feedback. FedEx conducts annual engagement surveys to measure employee satisfaction on Culture, Engagement and Diversity and
we share the results with senior leaders to inform leadership development plans and additional changes as needed.

Due to the COVID-19 pandemic, many of our team members moved to remote work settings. We are reevaluating how and where
team members work to provide flexibility, increase effectiveness and optimize our workspaces.

Tenure, Promotion and Turnover

Every day, we work hard to earn and maintain the loyalty of our team members by creating a workplace culture that supports their
aspirations and provides benefits and opportunities to support their quality of life and development. Globally, FedEx hired more than
300,000 full- and part-time team members in 2020. Excluding TNT Express employees and U.S.-based FedEx Supply Chain
employees, in 2021 turnover for part-time team members, primarily package handlers, was 183%, while full-time team member
turnover was 23%.

Our Community

FedEx is committed to actively supporting the communities we serve worldwide through the strategic investment of our people,
resources and network. FedEx Cares, our global community engagement program, is one way we work to connect people and
possibilities. We provide financial contributions, in-kind charitable shipping services and team member volunteering to help non-
profit organizations achieve their goals and make a measurable impact on the world. We focus our effort in the following three areas:

• Delivering for Good: Lending our global network and our unparalleled logistics expertise to organizations with mission-

critical needs and helping communities before, during and after crises.

• Global Entrepreneurship: Advancing women and minority-owned small businesses globally through training and increased

access to resources, capital and new markets.

• Sustainable Logistics: Helping scale existing solutions and investing in new ideas to improve mobility, reduce congestion and

decrease pollution in communities around the world.

In 2020 we launched FedEx Cares 50 by 50 with the goal of positively impacting 50 million people around the world by our 50th
anniversary in 2023. FedEx also supports communities throughout the U.S. with its annual FedEx Cares United Way giving campaign.
For additional information on our community involvement and our FedEx Cares strategy, visit fedexcares.com.

- 6 -

- 7 -

Through our environmental, social and governance (“ESG”) strategies, FedEx connects the communities where we live and work in

remarkable ways. Our 2021 ESG Report is available at fedex.com/en-us/sustainability/reports.html. This report discusses our ESG

strategies and programs and includes important goals and metrics that demonstrate our commitment to fulfilling our responsibilities in

these areas. Information in our ESG Report is not incorporated by reference in, and does not form part of, this Annual Report.

The COVID-19 pandemic took an unprecedented toll on the emotional and mental welfare of many. To support team members’
The COVID-19 pandemic took an unprecedented toll on the emotional and mental welfare of many. To support team members’
mental health, we offer 24/7 confidential counseling services to employees, eligible dependents and all household members, even if
mental health, we offer 24/7 confidential counseling services to employees, eligible dependents and all household members, even if
they are not participating plan members. We frequently communicate with employees on how to access these resources to promote
they are not participating plan members. We frequently communicate with employees on how to access these resources to promote
their use across the enterprise, with an increased focus on mental health resources this year.
their use across the enterprise, with an increased focus on mental health resources this year.

Human Resource Management

Our Culture

At FedEx, it is our people—our greatest asset—that give us our strong reputation and stand at the heart of our success. In addition to

our superior physical and information networks, FedEx has an exemplary human network. Across the globe, our 570,000 team

members are united by our passion to deliver the FedEx Purple Promise—to make every FedEx experience outstanding—and our

People–Service–Profit principles.

Our success depends on the talent, dedication and well-being of our people. As we grow, we strive to recruit, retain, develop and

provide advancement opportunities for our team members. We continually work to make FedEx an inclusive, equitable and growth-

focused workplace where all team members have the opportunity to flourish.

Safety

Our longstanding “Safety Above All” philosophy is the first and foremost value in every aspect of our business. It is backed by strict

policies, robust team member education, safety recognition awards and continued investment in technology. Across the enterprise, we

are committed to making our workplaces and communities safer for our team members, customers and the public. During the COVID-

19 pandemic, we implemented numerous measures to keep our team members, customers and communities safe while on the front

lines operating in impacted areas and providing connectivity and delivery of critical medical supplies around the world.

Diversity, Equity & Inclusion

We believe that DEI delivers a better future for all team members, customers, suppliers and

communities. As a global company, we see exceptional business and community value in the

diversity of perspectives and experiences that our team members bring to work every day. While

we are proud of what we have achieved during our almost 50-year history, we know that DEI must

always be at the forefront of our business strategy.

The FedEx workforce is as diverse as the world we serve, and we believe that everyone deserves

respect. We are committed to be a diverse, equitable and inclusive employer. This year, we added

the word equity to the title of our enterprise-wide efforts, formalizing our commitment to creating

a workplace where everyone has fair treatment and equal opportunity to succeed. We also

established four consistent, strategic pillars across our enterprise to frame our DEI work and share

our progress: Our People; Our Education and Engagement; Our Communities, Customers, and

Suppliers; and Our Story. While we provide a consistent framework for DEI, each operating

company structures and operationalizes its approach separately to account for regional differences

in regulations and cultures.

Compensation and Benefits

We provide our team members with competitive healthcare, wellness and other benefits to support

their quality of life and enable them to thrive in the workplace. In addition, we offer competitive

retirement benefits to eligible U.S. team members.

We conduct periodic benchmarking analyses to ensure our pay remains competitive. In addition,

FedEx regularly assesses internal pay equity. In each pay analysis, we adjust for job tenure,

region, performance and other variables that can influence pay over time.

All eligible full-time and part-time employees and their eligible dependents receive competitive

health benefits. In the U.S., we cover approximately 70% of total eligible health and disability

costs for part- and full-time employees at the plan level for our approximately 219,000

participating employees.

Learning and Development
Learning and Development

As our team members commit to delivering the Purple Promise, we remain committed to providing all our people with learning and
As our team members commit to delivering the Purple Promise, we remain committed to providing all our people with learning and
development opportunities to advance their careers at FedEx. Training and development begins with our enterprise-wide content for
development opportunities to advance their careers at FedEx. Training and development begins with our enterprise-wide content for
new employees—Core New Employee Orientation—which provides a consistent onboarding experience across our operating
new employees—Core New Employee Orientation—which provides a consistent onboarding experience across our operating
companies on topics such as safety, security, compliance, sustainability and DEI. Beyond training opportunities, we provide ongoing
companies on topics such as safety, security, compliance, sustainability and DEI. Beyond training opportunities, we provide ongoing
career development tools, opportunities and education for all full-time employees. Each operating company designs and manages its
career development tools, opportunities and education for all full-time employees. Each operating company designs and manages its
own leadership and development programs in support of its unique needs.
own leadership and development programs in support of its unique needs.

We are committed to supporting team members who wish to pursue higher education in a variety of ways. In 2020, we provided over
We are committed to supporting team members who wish to pursue higher education in a variety of ways. In 2020, we provided over
$15 million in tuition assistance to nearly 10,000 employees to further their education. In addition, Learning inspired by FedEx
$15 million in tuition assistance to nearly 10,000 employees to further their education. In addition, Learning inspired by FedEx
(LiFE)—a partnership between multiple FedEx operating companies and The University of Memphis—allows many employees the
(LiFE)—a partnership between multiple FedEx operating companies and The University of Memphis—allows many employees the
opportunity to earn a tuition-free, fully online degree. Eligible employees include all U.S.-based FedEx Logistics and FedEx Trade
opportunity to earn a tuition-free, fully online degree. Eligible employees include all U.S.-based FedEx Logistics and FedEx Trade
Networks Transport & Brokerage employees, all Memphis-based FedEx Supply Chain employees and FedEx Express employees at 16
Networks Transport & Brokerage employees, all Memphis-based FedEx Supply Chain employees and FedEx Express employees at 16
major hub locations in the U.S.
major hub locations in the U.S.

Employee Engagement
Employee Engagement

We value feedback from our team members, looking to understand their concerns and expectations and, where possible, acting on
We value feedback from our team members, looking to understand their concerns and expectations and, where possible, acting on
them. We provide several avenues to listen to and engage with our team, including annual surveys, employee networks and direct
them. We provide several avenues to listen to and engage with our team, including annual surveys, employee networks and direct
feedback. FedEx conducts annual engagement surveys to measure employee satisfaction on Culture, Engagement and Diversity and
feedback. FedEx conducts annual engagement surveys to measure employee satisfaction on Culture, Engagement and Diversity and
we share the results with senior leaders to inform leadership development plans and additional changes as needed.
we share the results with senior leaders to inform leadership development plans and additional changes as needed.

Due to the COVID-19 pandemic, many of our team members moved to remote work settings. We are reevaluating how and where
Due to the COVID-19 pandemic, many of our team members moved to remote work settings. We are reevaluating how and where
team members work to provide flexibility, increase effectiveness and optimize our workspaces.
team members work to provide flexibility, increase effectiveness and optimize our workspaces.

Tenure, Promotion and Turnover
Tenure, Promotion and Turnover

Every day, we work hard to earn and maintain the loyalty of our team members by creating a workplace culture that supports their
Every day, we work hard to earn and maintain the loyalty of our team members by creating a workplace culture that supports their
aspirations and provides benefits and opportunities to support their quality of life and development. Globally, FedEx hired more than
aspirations and provides benefits and opportunities to support their quality of life and development. Globally, FedEx hired more than
300,000 full- and part-time team members in 2020. Excluding TNT Express employees and U.S.-based FedEx Supply Chain
300,000 full- and part-time team members in 2020. Excluding TNT Express employees and U.S.-based FedEx Supply Chain
employees, in 2021 turnover for part-time team members, primarily package handlers, was 183%, while full-time team member
employees, in 2021 turnover for part-time team members, primarily package handlers, was 183%, while full-time team member
turnover was 23%.
turnover was 23%.

Our Community
Our Community

FedEx is committed to actively supporting the communities we serve worldwide through the strategic investment of our people,
FedEx is committed to actively supporting the communities we serve worldwide through the strategic investment of our people,
resources and network. FedEx Cares, our global community engagement program, is one way we work to connect people and
resources and network. FedEx Cares, our global community engagement program, is one way we work to connect people and
possibilities. We provide financial contributions, in-kind charitable shipping services and team member volunteering to help non-
possibilities. We provide financial contributions, in-kind charitable shipping services and team member volunteering to help non-
profit organizations achieve their goals and make a measurable impact on the world. We focus our effort in the following three areas:
profit organizations achieve their goals and make a measurable impact on the world. We focus our effort in the following three areas:

• Delivering for Good: Lending our global network and our unparalleled logistics expertise to organizations with mission-
• Delivering for Good: Lending our global network and our unparalleled logistics expertise to organizations with mission-

critical needs and helping communities before, during and after crises.
critical needs and helping communities before, during and after crises.

• Global Entrepreneurship: Advancing women and minority-owned small businesses globally through training and increased
• Global Entrepreneurship: Advancing women and minority-owned small businesses globally through training and increased

access to resources, capital and new markets.
access to resources, capital and new markets.

• Sustainable Logistics: Helping scale existing solutions and investing in new ideas to improve mobility, reduce congestion and
• Sustainable Logistics: Helping scale existing solutions and investing in new ideas to improve mobility, reduce congestion and

decrease pollution in communities around the world.
decrease pollution in communities around the world.

In 2020 we launched FedEx Cares 50 by 50 with the goal of positively impacting 50 million people around the world by our 50th
In 2020 we launched FedEx Cares 50 by 50 with the goal of positively impacting 50 million people around the world by our 50th
anniversary in 2023. FedEx also supports communities throughout the U.S. with its annual FedEx Cares United Way giving campaign.
anniversary in 2023. FedEx also supports communities throughout the U.S. with its annual FedEx Cares United Way giving campaign.
For additional information on our community involvement and our FedEx Cares strategy, visit fedexcares.com.
For additional information on our community involvement and our FedEx Cares strategy, visit fedexcares.com.

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We also work to optimize packaging, including through reusable options, reduce packaging waste and maximize recycling to make the

best use of our resources, reduce emissions and ship packages more efficiently. FedEx Office carefully manages the responsible

sourcing, use and recycling of paper used for commercial copy and print services. During 2020, 99.8% of all paper purchased by

FedEx Office was third-party certified. Our operating companies are optimizing their recycling programs through close collaboration

with their waste management vendors. We are also working with our customers to reduce packaging materials to decrease their waste

For additional information on the ways we are minimizing our impact on the environment, see fedex.com/en-us/sustainability.html.

management costs.

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 ESG heading on the Investor Relations page of our

website at investors.fedex.com. We will post under the ESG 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.

The following describes in more detail the operations of each of our principal operating segments:

Business Segments

FedEx Express Segment

FedEx Express

Overview

transportation company.

We remain committed to helping lift local economies by investing in people and communities where we live and work. In the U.S.,
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
this includes seeking diverse suppliers and strengthening our supply chain by sourcing from small, minority- and women-owned
businesses. We are also proud of our long-standing history of supporting and fostering relationships with organizations that are
businesses. We are also proud of our long-standing history of supporting and fostering relationships with organizations that are
working to make our society more equitable and just, such as the National Association for the Advancement of Colored People and the
working to make our society more equitable and just, such as the National Association for the Advancement of Colored People and the
National Civil Rights Museum. In 2021 we announced the launch of the FedEx E-Commerce Learning Lab, which is designed to help
National Civil Rights Museum. In 2021 we announced the launch of the FedEx E-Commerce Learning Lab, which is designed to help
diverse small business owners looking to develop or expand their e-commerce operations, with a focus on women and entrepreneurs
diverse small business owners looking to develop or expand their e-commerce operations, with a focus on women and entrepreneurs
of color.
of color.

The Environment
The Environment

At FedEx, we remain steadfast in our commitment to minimize the impacts our business has on the environment. In March 2021 we
At FedEx, we remain steadfast in our commitment to minimize the impacts our business has on the environment. In March 2021 we
announced our goal to achieve carbon neutrality for our global operations by calendar 2040. To help reach this goal, we are
announced our goal to achieve carbon neutrality for our global operations by calendar 2040. To help reach this goal, we are
designating more than $2.0 billion of initial investment in vehicle electrification, sustainable energy and carbon sequestration,
designating more than $2.0 billion of initial investment in vehicle electrification, sustainable energy and carbon sequestration,
including a pledge of $100 million to Yale University to help establish the Yale Center for Natural Carbon Capture.
including a pledge of $100 million to Yale University to help establish the Yale Center for Natural Carbon Capture.

Our “Practical Sustainability” philosophy and “Reduce, Replace, Revolutionize” approach guide our environmental strategy across
Our “Practical Sustainability” philosophy and “Reduce, Replace, Revolutionize” approach guide our environmental strategy across
three key areas of our environmental footprint: our aviation fleet, our vehicle fleet and our facilities. Throughout FedEx, team
three key areas of our environmental footprint: our aviation fleet, our vehicle fleet and our facilities. Throughout FedEx, team
members are encouraged to implement our sustainability strategy and achieve our goals. We equip team members with a variety of
members are encouraged to implement our sustainability strategy and achieve our goals. We equip team members with a variety of
internal programs to advance our progress in reducing fuel emissions, energy use and waste in the workplace.
internal programs to advance our progress in reducing fuel emissions, energy use and waste in the workplace.

To reduce the cost of fuel use and associated greenhouse gas (“GHG”) emissions, we are replacing many of our older airplanes with
To reduce the cost of fuel use and associated greenhouse gas (“GHG”) emissions, we are replacing many of our older airplanes with
more fuel-efficient models, and we have implemented efficiencies in flight operations through our global FedEx Fuel Sense program.
more fuel-efficient models, and we have implemented efficiencies in flight operations through our global FedEx Fuel Sense program.
These two initiatives saved more than 255 million gallons of jet fuel and avoided more than 2.0 million metric tons of carbon dioxide
These two initiatives saved more than 255 million gallons of jet fuel and avoided more than 2.0 million metric tons of carbon dioxide
equivalent emissions in 2020. A global increase in volume exacerbated by the COVID-19 pandemic delayed the retirement of certain
equivalent emissions in 2020. A global increase in volume exacerbated by the COVID-19 pandemic delayed the retirement of certain
older aircraft and led us to fall short of our goal to reduce aircraft emissions intensity by 30% from a 2005 baseline by calendar 2020.
older aircraft and led us to fall short of our goal to reduce aircraft emissions intensity by 30% from a 2005 baseline by calendar 2020.
However, in 2020, we achieved a 27% reduction in aircraft emissions intensity since 2005 through a combination of our aircraft fleet
However, in 2020, we achieved a 27% reduction in aircraft emissions intensity since 2005 through a combination of our aircraft fleet
modernization and operational programs. We have also established a goal of obtaining 30% of our jet fuel from alternative fuels by
modernization and operational programs. We have also established a goal of obtaining 30% of our jet fuel from alternative fuels by
calendar 2030.
calendar 2030.

We strive to employ the most advanced vehicle technologies to efficiently and safely move packages across our networks. FedEx
We strive to employ the most advanced vehicle technologies to efficiently and safely move packages across our networks. FedEx
Express has established a goal to increase vehicle fuel efficiency by 50% from a 2005 baseline by calendar 2025. Through 2020, our
Express has established a goal to increase vehicle fuel efficiency by 50% from a 2005 baseline by calendar 2025. Through 2020, our
efforts collectively resulted in a 45% improvement in FedEx Express vehicle fuel efficiency from our 2005 baseline.
efforts collectively resulted in a 45% improvement in FedEx Express vehicle fuel efficiency from our 2005 baseline.

FedEx Express invented express distribution nearly 50 years ago in 1973 and remains the industry leader, providing rapid, reliable,

time-definite delivery of packages and freight to more than 220 countries and territories through an integrated global network. In

2016, we acquired TNT Express, a leading international express transportation, small-package ground delivery and freight

We have an impressive global alternative fuel fleet with nearly 4,100 alternative fuel vehicles, including hybrid, electric, liquified or
We have an impressive global alternative fuel fleet with nearly 4,100 alternative fuel vehicles, including hybrid, electric, liquified or
compressed natural gas, liquefied petroleum gas and hydrogen fuel cell vehicles. In 2021 FedEx Express agreed to purchase 500
compressed natural gas, liquefied petroleum gas and hydrogen fuel cell vehicles. In 2021 FedEx Express agreed to purchase 500
electric vehicles from General Motors’ BrightDrop, and we recently conducted several successful initiatives involving electric
electric vehicles from General Motors’ BrightDrop, and we recently conducted several successful initiatives involving electric
vehicles in our operations. We plan to transition the entire FedEx parcel pickup-and-delivery fleet to zero-emission electric vehicles
vehicles in our operations. We plan to transition the entire FedEx parcel pickup-and-delivery fleet to zero-emission electric vehicles
by calendar 2040, using a phased approach to replace existing vehicles. For example, by calendar 2025, we expect 50% of FedEx
by calendar 2040, using a phased approach to replace existing vehicles. For example, by calendar 2025, we expect 50% of FedEx
Express global pickup-and-delivery vehicle purchases will be electric, rising to 100% of all purchases by calendar 2030, subject to
Express global pickup-and-delivery vehicle purchases will be electric, rising to 100% of all purchases by calendar 2030, subject to
availability. We are developing innovative charging infrastructures to support the continued rollout of our electric vehicle fleet, and
availability. We are developing innovative charging infrastructures to support the continued rollout of our electric vehicle fleet, and
across our operating companies we continue to electrify our forklift, airport ground service equipment and other non-road vehicles.
across our operating companies we continue to electrify our forklift, airport ground service equipment and other non-road vehicles.

Our zero-emission FedEx SameDay Bot and pilot drone delivery service, which are discussed in more detail below under “FedEx
Our zero-emission FedEx SameDay Bot and pilot drone delivery service, which are discussed in more detail below under “FedEx
Services Segment — Customer-Driven Technology,” have potential to serve as environmentally friendly alternatives for last-mile
Services Segment — Customer-Driven Technology,” have potential to serve as environmentally friendly alternatives for last-mile
residential package deliveries. We also continue to leverage the efficiency of intermodal rail transport for long-haul shipping at FedEx
residential package deliveries. We also continue to leverage the efficiency of intermodal rail transport for long-haul shipping at FedEx
Ground and FedEx Freight, and promote the use of electric vehicles and alternative fuels by independent service providers in our
Ground and FedEx Freight, and promote the use of electric vehicles and alternative fuels by independent service providers in our
shipping network. Additionally, we are working with manufacturers to test and pilot zero-emission vehicle technology for long-haul
shipping network. Additionally, we are working with manufacturers to test and pilot zero-emission vehicle technology for long-haul
trucks, and strive to implement the optimal technology and drive operational efficiency across our long-haul fleet.
trucks, and strive to implement the optimal technology and drive operational efficiency across our long-haul fleet.

The efficient operation of our more than 5,000 air and ground hubs, local stations, freight service centers and retail locations is critical
The efficient operation of our more than 5,000 air and ground hubs, local stations, freight service centers and retail locations is critical
to achieving our business and sustainability goals. Where appropriate, we adopt the Leadership in Energy and Environmental Design
to achieving our business and sustainability goals. Where appropriate, we adopt the Leadership in Energy and Environmental Design
(“LEED”) standard in the U.S. and the Building Research Establishment Environmental Assessment Method (“BREEAM”) in Europe
(“LEED”) standard in the U.S. and the Building Research Establishment Environmental Assessment Method (“BREEAM”) in Europe
to guide efficient facility design and construction of state-of-the-art facilities. FedEx Express has committed to seek LEED or
to guide efficient facility design and construction of state-of-the-art facilities. FedEx Express has committed to seek LEED or
BREEAM certification on all new U.S. and European FedEx Express buildings where appropriate. FedEx has 32 LEED-certified
BREEAM certification on all new U.S. and European FedEx Express buildings where appropriate. FedEx has 32 LEED-certified
facilities across all of our operating companies. At the end of 2020, approximately 450 FedEx facilities were certified to the ISO
facilities across all of our operating companies. At the end of 2020, approximately 450 FedEx facilities were certified to the ISO
14001 environmental management system standard.
14001 environmental management system standard.

As part of our goal to become carbon neutral by calendar 2040, we are advancing on-site renewable energy generation and procuring
As part of our goal to become carbon neutral by calendar 2040, we are advancing on-site renewable energy generation and procuring
renewable energy to help us to continue reducing our GHG footprint. Across our operating companies, 26 FedEx locations generate
renewable energy to help us to continue reducing our GHG footprint. Across our operating companies, 26 FedEx locations generate
on-site renewable energy, and we are evaluating opportunities to purchase off-site renewable energy.
on-site renewable energy, and we are evaluating opportunities to purchase off-site renewable energy.

FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight,

connecting markets that generate more than 99% of the world’s gross domestic product through door-to-door, customs-cleared service,

historically with a money-back guarantee. In response to the COVID-19 pandemic, in March 2020 we temporarily suspended our

money-back guarantee for all FedEx Express services. In April 2021 we reinstated the money-back guarantee for select FedEx

Express U.S. domestic and U.S. import/export services. However, as of July 15, 2021, the money-back guarantee remains suspended

for other FedEx Express services as we continue to experience unprecedented volume and customer demand as well as limited aircraft

capacity. FedEx Express’s unmatched air route authorities and extensive transportation infrastructure, combined with leading-edge

information technologies, make it the world’s largest express transportation company. As of May 31, 2021, FedEx Express employed

approximately 289,000 employees and had approximately 77,000 drop-off locations (including FedEx Office stores and FedEx OnSite

locations, such as approximately 18,000 Walgreens, Dollar General and Albertsons stores), 684 aircraft and approximately 87,000

vehicles in its global network.

FedEx Express also provides time-critical shipment services through FedEx Custom Critical, Inc. (“FedEx Custom Critical”) and

cross-border enablement and technology solutions and e-commerce transportation solutions through FedEx Cross Border Holdings,

Inc. (“FedEx Cross Border”) and its subsidiary FedEx Cross Border (UK) Limited (formerly P2P Mailing Limited).

Services

market.

FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight. FedEx

Express offers three U.S. domestic overnight package delivery services: FedEx First Overnight, FedEx Priority Overnight and FedEx

Standard Overnight. FedEx SameDay service is available 365 days a year throughout all 50 states for urgent shipments up to 150

pounds. FedEx Express also offers U.S. express overnight and deferred freight services to handle the needs of the time-definite freight

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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 are also proud of our long-standing history of supporting and fostering relationships with organizations that are

working to make our society more equitable and just, such as the National Association for the Advancement of Colored People and the

National Civil Rights Museum. In 2021 we announced the launch of the FedEx E-Commerce Learning Lab, which is designed to help

diverse small business owners looking to develop or expand their e-commerce operations, with a focus on women and entrepreneurs

We also work to optimize packaging, including through reusable options, reduce packaging waste and maximize recycling to make the
We also work to optimize packaging, including through reusable options, reduce packaging waste and maximize recycling to make the
best use of our resources, reduce emissions and ship packages more efficiently. FedEx Office carefully manages the responsible
best use of our resources, reduce emissions and ship packages more efficiently. FedEx Office carefully manages the responsible
sourcing, use and recycling of paper used for commercial copy and print services. During 2020, 99.8% of all paper purchased by
sourcing, use and recycling of paper used for commercial copy and print services. During 2020, 99.8% of all paper purchased by
FedEx Office was third-party certified. Our operating companies are optimizing their recycling programs through close collaboration
FedEx Office was third-party certified. Our operating companies are optimizing their recycling programs through close collaboration
with their waste management vendors. We are also working with our customers to reduce packaging materials to decrease their waste
with their waste management vendors. We are also working with our customers to reduce packaging materials to decrease their waste
management costs.
management costs.

For additional information on the ways we are minimizing our impact on the environment, see fedex.com/en-us/sustainability.html.
For additional information on the ways we are minimizing our impact on the environment, see fedex.com/en-us/sustainability.html.

Governance
Governance

The FedEx Board of Directors is comprised of a majority of independent directors and is committed to the highest quality corporate
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
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
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
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
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 ESG heading on the Investor Relations page of our
principal executive officer and senior financial officers, are available under the ESG heading on the Investor Relations page of our
website at investors.fedex.com. We will post under the ESG heading on the Investor Relations page of our website information
website at investors.fedex.com. We will post under the ESG 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.
regarding any amendment to, or waiver from, the provisions of the Code of Conduct to the extent such disclosure is required.

To reduce the cost of fuel use and associated greenhouse gas (“GHG”) emissions, we are replacing many of our older airplanes with

Business Segments
Business Segments

The following describes in more detail the operations of each of our principal operating segments:
The following describes in more detail the operations of each of our principal operating segments:

FedEx Express Segment
FedEx Express Segment

FedEx Express
FedEx Express

Overview
Overview

FedEx Express invented express distribution nearly 50 years ago in 1973 and remains the industry leader, providing rapid, reliable,
FedEx Express invented express distribution nearly 50 years ago in 1973 and remains the industry leader, providing rapid, reliable,
time-definite delivery of packages and freight to more than 220 countries and territories through an integrated global network. In
time-definite delivery of packages and freight to more than 220 countries and territories through an integrated global network. In
2016, we acquired TNT Express, a leading international express transportation, small-package ground delivery and freight
2016, we acquired TNT Express, a leading international express transportation, small-package ground delivery and freight
transportation company.
transportation company.

FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight,
FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight,
connecting markets that generate more than 99% of the world’s gross domestic product through door-to-door, customs-cleared service,
connecting markets that generate more than 99% of the world’s gross domestic product through door-to-door, customs-cleared service,
historically with a money-back guarantee. In response to the COVID-19 pandemic, in March 2020 we temporarily suspended our
historically with a money-back guarantee. In response to the COVID-19 pandemic, in March 2020 we temporarily suspended our
money-back guarantee for all FedEx Express services. In April 2021 we reinstated the money-back guarantee for select FedEx
money-back guarantee for all FedEx Express services. In April 2021 we reinstated the money-back guarantee for select FedEx
Express U.S. domestic and U.S. import/export services. However, as of July 15, 2021, the money-back guarantee remains suspended
Express U.S. domestic and U.S. import/export services. However, as of July 15, 2021, the money-back guarantee remains suspended
for other FedEx Express services as we continue to experience unprecedented volume and customer demand as well as limited aircraft
for other FedEx Express services as we continue to experience unprecedented volume and customer demand as well as limited aircraft
capacity. FedEx Express’s unmatched air route authorities and extensive transportation infrastructure, combined with leading-edge
capacity. FedEx Express’s unmatched air route authorities and extensive transportation infrastructure, combined with leading-edge
information technologies, make it the world’s largest express transportation company. As of May 31, 2021, FedEx Express employed
information technologies, make it the world’s largest express transportation company. As of May 31, 2021, FedEx Express employed
approximately 289,000 employees and had approximately 77,000 drop-off locations (including FedEx Office stores and FedEx OnSite
approximately 289,000 employees and had approximately 77,000 drop-off locations (including FedEx Office stores and FedEx OnSite
locations, such as approximately 18,000 Walgreens, Dollar General and Albertsons stores), 684 aircraft and approximately 87,000
locations, such as approximately 18,000 Walgreens, Dollar General and Albertsons stores), 684 aircraft and approximately 87,000
vehicles in its global network.
vehicles in its global network.

FedEx Express also provides time-critical shipment services through FedEx Custom Critical, Inc. (“FedEx Custom Critical”) and
FedEx Express also provides time-critical shipment services through FedEx Custom Critical, Inc. (“FedEx Custom Critical”) and
cross-border enablement and technology solutions and e-commerce transportation solutions through FedEx Cross Border Holdings,
cross-border enablement and technology solutions and e-commerce transportation solutions through FedEx Cross Border Holdings,
Inc. (“FedEx Cross Border”) and its subsidiary FedEx Cross Border (UK) Limited (formerly P2P Mailing Limited).
Inc. (“FedEx Cross Border”) and its subsidiary FedEx Cross Border (UK) Limited (formerly P2P Mailing Limited).

Services
Services

FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight. FedEx
FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight. FedEx
Express offers three U.S. domestic overnight package delivery services: FedEx First Overnight, FedEx Priority Overnight and FedEx
Express offers three U.S. domestic overnight package delivery services: FedEx First Overnight, FedEx Priority Overnight and FedEx
Standard Overnight. FedEx SameDay service is available 365 days a year throughout all 50 states for urgent shipments up to 150
Standard Overnight. FedEx SameDay service is available 365 days a year throughout all 50 states for urgent shipments up to 150
pounds. FedEx Express also offers U.S. express overnight and deferred freight services to handle the needs of the time-definite freight
pounds. FedEx Express also offers U.S. express overnight and deferred freight services to handle the needs of the time-definite freight
market.
market.

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of color.

The Environment

At FedEx, we remain steadfast in our commitment to minimize the impacts our business has on the environment. In March 2021 we

announced our goal to achieve carbon neutrality for our global operations by calendar 2040. To help reach this goal, we are

designating more than $2.0 billion of initial investment in vehicle electrification, sustainable energy and carbon sequestration,

including a pledge of $100 million to Yale University to help establish the Yale Center for Natural Carbon Capture.

Our “Practical Sustainability” philosophy and “Reduce, Replace, Revolutionize” approach guide our environmental strategy across

three key areas of our environmental footprint: our aviation fleet, our vehicle fleet and our facilities. Throughout FedEx, team

members are encouraged to implement our sustainability strategy and achieve our goals. We equip team members with a variety of

internal programs to advance our progress in reducing fuel emissions, energy use and waste in the workplace.

more fuel-efficient models, and we have implemented efficiencies in flight operations through our global FedEx Fuel Sense program.

These two initiatives saved more than 255 million gallons of jet fuel and avoided more than 2.0 million metric tons of carbon dioxide

equivalent emissions in 2020. A global increase in volume exacerbated by the COVID-19 pandemic delayed the retirement of certain

older aircraft and led us to fall short of our goal to reduce aircraft emissions intensity by 30% from a 2005 baseline by calendar 2020.

However, in 2020, we achieved a 27% reduction in aircraft emissions intensity since 2005 through a combination of our aircraft fleet

modernization and operational programs. We have also established a goal of obtaining 30% of our jet fuel from alternative fuels by

calendar 2030.

We strive to employ the most advanced vehicle technologies to efficiently and safely move packages across our networks. FedEx

Express has established a goal to increase vehicle fuel efficiency by 50% from a 2005 baseline by calendar 2025. Through 2020, our

efforts collectively resulted in a 45% improvement in FedEx Express vehicle fuel efficiency from our 2005 baseline.

We have an impressive global alternative fuel fleet with nearly 4,100 alternative fuel vehicles, including hybrid, electric, liquified or

compressed natural gas, liquefied petroleum gas and hydrogen fuel cell vehicles. In 2021 FedEx Express agreed to purchase 500

electric vehicles from General Motors’ BrightDrop, and we recently conducted several successful initiatives involving electric

vehicles in our operations. We plan to transition the entire FedEx parcel pickup-and-delivery fleet to zero-emission electric vehicles

by calendar 2040, using a phased approach to replace existing vehicles. For example, by calendar 2025, we expect 50% of FedEx

Express global pickup-and-delivery vehicle purchases will be electric, rising to 100% of all purchases by calendar 2030, subject to

availability. We are developing innovative charging infrastructures to support the continued rollout of our electric vehicle fleet, and

across our operating companies we continue to electrify our forklift, airport ground service equipment and other non-road vehicles.

Our zero-emission FedEx SameDay Bot and pilot drone delivery service, which are discussed in more detail below under “FedEx

Services Segment — Customer-Driven Technology,” have potential to serve as environmentally friendly alternatives for last-mile

residential package deliveries. We also continue to leverage the efficiency of intermodal rail transport for long-haul shipping at FedEx

Ground and FedEx Freight, and promote the use of electric vehicles and alternative fuels by independent service providers in our

shipping network. Additionally, we are working with manufacturers to test and pilot zero-emission vehicle technology for long-haul

trucks, and strive to implement the optimal technology and drive operational efficiency across our long-haul fleet.

The efficient operation of our more than 5,000 air and ground hubs, local stations, freight service centers and retail locations is critical

to achieving our business and sustainability goals. Where appropriate, we adopt the Leadership in Energy and Environmental Design

(“LEED”) standard in the U.S. and the Building Research Establishment Environmental Assessment Method (“BREEAM”) in Europe

to guide efficient facility design and construction of state-of-the-art facilities. FedEx Express has committed to seek LEED or

BREEAM certification on all new U.S. and European FedEx Express buildings where appropriate. FedEx has 32 LEED-certified

facilities across all of our operating companies. At the end of 2020, approximately 450 FedEx facilities were certified to the ISO

14001 environmental management system standard.

As part of our goal to become carbon neutral by calendar 2040, we are advancing on-site renewable energy generation and procuring

renewable energy to help us to continue reducing our GHG footprint. Across our operating companies, 26 FedEx locations generate

on-site renewable energy, and we are evaluating opportunities to purchase off-site renewable energy.

International express and deferred package delivery is available to more than 220 countries and territories, with a variety of time-
International express and deferred package delivery is available to more than 220 countries and territories, with a variety of time-
definite services to meet distinct customer needs. FedEx International Economy provides time-definite delivery typically in two to five
definite services to meet distinct customer needs. FedEx International Economy provides time-definite delivery typically in two to five
business days. FedEx International First provides time-definite delivery to select postal codes in more than 25 countries and territories,
business days. FedEx International First 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 nearly 200 countries and territories in one or two business days,
with delivery to select U.S. ZIP Codes as early as 8:00 a.m. from nearly 200 countries and territories in one or two business days,
delivery by 10:00 a.m. in one business day from the U.S. to Canada and by 11:00 a.m. in one business day from the U.S. to Mexico.
delivery by 10:00 a.m. in one business day from the U.S. to Canada and by 11:00 a.m. in one business day from the U.S. to Mexico.
FedEx Express also offers domestic pickup-and-delivery services within certain non-U.S. countries, including France, the United
FedEx Express also offers domestic pickup-and-delivery services within certain non-U.S. countries, including France, the United
Kingdom, Australia, Brazil, Italy, Canada, Mexico, Poland, India, China and South Africa. In addition, FedEx Express offers
Kingdom, Australia, Brazil, Italy, Canada, Mexico, Poland, India, China and South Africa. In addition, FedEx Express offers
comprehensive international express and deferred freight services, real-time tracking and advanced customs clearance.
comprehensive international express and deferred freight services, real-time tracking and advanced customs clearance.

In 2021 we introduced new service offerings to enhance our international portfolio. Our enhanced FedEx International Priority service
In 2021 we introduced new service offerings to enhance our international portfolio. Our enhanced 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
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 20 countries
International Priority Express service provides midday time-definite delivery in one to three business days to more than 20 countries
and territories. Additionally, FedEx International Connect Plus, a contractual e-commerce service currently available from ten origin
and territories. Additionally, FedEx International Connect Plus, a contractual e-commerce service currently available from ten origin
countries to 25 destination countries, provides day-definite delivery typically within two to five business days.
countries to 25 destination countries, provides day-definite delivery typically within two to five business days.

We are currently in the process of migrating customers from services offered by TNT Express to the FedEx Express portfolio of
We are currently in the process of migrating customers from services offered by TNT Express to the FedEx Express portfolio of
services.
services.

For information regarding FedEx Express e-commerce tools and solutions, such as FedEx Delivery Manager and FedEx Returns
For information regarding FedEx Express e-commerce tools and solutions, such as FedEx Delivery Manager and FedEx Returns
Technology, see “FedEx Services Segment — Customer-Driven Technology.”
Technology, see “FedEx Services Segment — Customer-Driven Technology.”

International Expansion
International Expansion

Over the years, acquisitions have given us more robust global transportation networks and added capabilities in important international
Over the years, acquisitions have given us more robust global transportation networks and added capabilities in important international
markets. In 2016 we acquired TNT Express, which is the largest acquisition in FedEx history. This acquisition rapidly accelerates our
markets. In 2016 we acquired TNT Express, which is the largest acquisition in FedEx history. This acquisition rapidly accelerates our
European and global growth, substantially enhances our global footprint through TNT Express’s lower-cost road networks in Europe,
European and global growth, substantially enhances our global footprint through TNT Express’s lower-cost road networks in Europe,
the Middle East and Asia, and expands our capabilities and solutions for our customers. During 2020 we substantially completed
the Middle East and Asia, and expands our capabilities and solutions for our customers. During 2020 we substantially completed
projects across our European hub and station locations that allow interoperability between the ground networks for both FedEx
projects across our European hub and station locations that allow interoperability between the ground networks for both FedEx
Express and TNT Express packages. In 2021 we completed the integration of the FedEx Express and TNT Express linehaul and
Express and TNT Express packages. In 2021 we completed the integration of the FedEx Express and TNT Express linehaul and
pickup-and-delivery operations and began offering an enhanced portfolio of international services. We expect to complete the final
pickup-and-delivery operations and began offering an enhanced portfolio of international services. We expect to complete the final
phase of international air network interoperability in early calendar 2022.
phase of international air network interoperability in early calendar 2022.

As we approach the completion of the physical network integration of TNT Express in 2022, we continue to execute initiatives in
As we approach the completion of the physical network integration of TNT Express in 2022, we continue to execute initiatives in
addition to the integration to transform and optimize the FedEx Express international business, particularly in Europe. For more
addition to the integration to transform and optimize the FedEx Express international business, particularly in Europe. For more
information about the integration of TNT Express, our international strategy and related costs, see “Item 1A. Risk Factors” and “Item
information about the integration of TNT Express, our international strategy and related costs, see “Item 1A. Risk Factors” and “Item
7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report. During 2021 we
7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report. During 2021 we
also enhanced our Europe-to-the-U.S. overnight and European e-commerce service portfolio with FedEx International Priority Express
also enhanced our Europe-to-the-U.S. overnight and European e-commerce service portfolio with FedEx International Priority Express
and FedEx International Connect Plus, which are discussed above under “Services.”
and FedEx International Connect Plus, which are discussed above under “Services.”

We also have expanded our capabilities in the Asia-Pacific markets, including through the establishment of: our Asia-Pacific hub at
We also have expanded our capabilities in the Asia-Pacific markets, including through the establishment of: our Asia-Pacific hub at
the Guangzhou Baiyun International Airport in southern China, which began operations in 2009; our North Pacific regional hub at the
the Guangzhou Baiyun International Airport in southern China, which began operations in 2009; our North Pacific regional hub at the
Kansai International Airport in Osaka, Japan, which opened in 2014 and serves as a consolidation point for shipments from northern
Kansai International Airport in Osaka, Japan, which opened in 2014 and serves as a consolidation point for shipments from northern
Asia to the U.S.; and our International Express and Cargo Hub in Shanghai, which opened in 2018 at Shanghai’s Pudong International
Asia to the U.S.; and our International Express and Cargo Hub in Shanghai, which opened in 2018 at Shanghai’s Pudong International
Airport. During 2020, we added 14 new Asia-Pacific origin markets for FedEx International First service to the U.S. and Canada.
Airport. During 2020, we added 14 new Asia-Pacific origin markets for FedEx International First service to the U.S. and Canada.
These developments allow us to continue to better serve our global customers doing business in the Asia-Pacific markets.
These developments allow us to continue to better serve our global customers doing business in the Asia-Pacific markets.

To facilitate the use of our growing international network, we offer a full range of international trade consulting services and a variety
To facilitate the use of our growing international network, we offer a full range of international trade consulting services and a variety
of online tools that enable customers to more easily determine and comply with international shipping requirements.
of online tools that enable customers to more easily determine and comply with international shipping requirements.

U.S. Postal Service Agreement
U.S. Postal Service Agreement

In 2013, FedEx Express entered into a new seven-year agreement with the USPS under which FedEx Express provides airport-to-
In 2013, FedEx Express entered into a new seven-year agreement with the USPS under which FedEx Express provides airport-to-
airport transportation of USPS First Class Mail, Priority Mail Express and Priority Mail within the U.S. In 2017, the parties entered
airport transportation of USPS First Class Mail, Priority Mail Express and Priority Mail within the U.S. In 2017, the parties entered
into an amendment to the agreement whereby the initial renewal period provided in the agreement was exercised in part and the
into an amendment to the agreement whereby the initial renewal period provided in the agreement was exercised in part and the
agreement’s period of performance was extended through September 29, 2024. FedEx Express also provides transportation and
agreement’s period of performance was extended through September 29, 2024. FedEx Express also provides transportation and
delivery for the USPS’s international delivery service called Global Express Guaranteed under a separate agreement. For more
delivery for the USPS’s international delivery service called Global Express Guaranteed under a separate agreement. For more
information about our relationship with the USPS, see “Item 1A. Risk Factors” of this Annual Report.
information about our relationship with the USPS, see “Item 1A. Risk Factors” of this Annual Report.

and corporate or industrial parks.

Fuel Supplies and Costs

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Pricing

FedEx 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 charge and whether the

customer charged the shipment to a FedEx account. Effective January 4, 2021, FedEx Express implemented a 4.9% average list price

increase for U.S. domestic, U.S. export and U.S. import services.

In order to manage demand and capacity constraints in connection with the COVID-19 pandemic, between April 6, 2020 and

November 1, 2020 FedEx Express implemented temporary surcharges on all international package and airfreight shipments. These

surcharges continued as peak surcharges beginning November 2, 2020 and remain in effect. Additionally, beginning June 8, 2020

FedEx Express has implemented a series of peak surcharges generally applying to shipments that are oversized or require additional

handling, and to residential packages for customers meeting a certain volume threshold. Specific applicable surcharges have been

adjusted periodically since their implementation, and higher surcharges applied during the 2021 holiday peak season. Effective

January 18, 2021, FedEx Express made general changes to the surcharge criteria for certain packages that require additional handling

and for packages that are picked up from or delivered to remote and less accessible locations.

FedEx Express has an indexed fuel surcharge for U.S. domestic and U.S. outbound shipments and for shipments originating

internationally, where legally and contractually possible. FedEx Express fuel surcharges are adjusted on a weekly basis. The fuel

surcharge is based on a weekly fuel price from two weeks prior to the week in which it is assessed. Some FedEx Express international

fuel surcharges incorporate a timing lag of approximately six to eight weeks. On June 21, 2021, we updated the tables used to

determine our fuel surcharges at FedEx Express. Beginning February 1, 2021, the fuel surcharge for U.S. domestic freight services is

assessed per pound of shipment. The weighted-average U.S. domestic and outbound fuel surcharges for the past three years were:

2021 — 4.9%; 2020 — 6.3%; and 2019 — 7.5%. 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 a description and discussion of the net impact of fuel on our operating results.

Operations

FedEx Express’s primary sorting facility, located in Memphis, serves as the center of the company’s multiple hub-and-spoke system.

A second national hub facility is located in Indianapolis. We are making investments over multiple years in our facilities of

approximately $1.5 billion to significantly expand the Indianapolis hub and approximately $1.5 billion to modernize the Memphis

World Hub. In addition to these national hubs, FedEx Express operates regional hubs in Fort Worth, Newark, Oakland and

Greensboro and major metropolitan sorting facilities in Chicago and Los Angeles.

Facilities in Anchorage, Paris, Cologne, Guangzhou and Osaka serve as sorting facilities for express package and freight traffic

moving to and from Asia, Europe and North America. Additional major sorting and freight handling facilities are located at Narita

Airport in Tokyo and Stansted Airport outside London. The facilities in Paris, Cologne, Guangzhou and Osaka are also designed to

serve as regional hubs for their respective market areas. A facility in Miami — the Miami Gateway Hub — serves our South Florida,

Latin American and Caribbean markets. TNT Express operates a central air hub near Liege, Belgium.

In addition to its worldwide air network, FedEx Express operates road networks in North America, Europe, the Middle East, Asia,

Australia and South America. FedEx Express’s unique European road network, harnessing the integration of TNT Express, connects

more than 40 countries through 34 road hubs and over 570 direct served stations.

Throughout its worldwide network, FedEx Express operates city stations and employs a staff of customer service agents, cargo

handlers and couriers who pick up and deliver shipments in the station’s service area. In some international areas, independent agents

(“Global Service Participants”) have been selected to complete deliveries and to pick up packages. For more information about our

sorting and handling facilities, see “Item 2. Properties” of this Annual Report under the caption “FedEx Express Segment.”

FedEx Office offers retail access to FedEx Express shipping services at all of its retail locations. FedEx Express also has alliances with

certain other retailers to provide in-store drop-off sites, including at more than 18,000 Walgreens, Dollar General and Albertsons

stores. Our unstaffed FedEx Drop Boxes provide customers the opportunity to drop off packages in office buildings, shopping centers

During 2021, FedEx 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. See “Pricing” above.

International express and deferred package delivery is available to more than 220 countries and territories, with a variety of time-

Pricing
Pricing

definite services to meet distinct customer needs. FedEx International Economy provides time-definite delivery typically in two to five

business days. FedEx International First 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 nearly 200 countries and territories in one or two business days,

delivery by 10:00 a.m. in one business day from the U.S. to Canada and by 11:00 a.m. in one business day from the U.S. to Mexico.

FedEx Express also offers domestic pickup-and-delivery services within certain non-U.S. countries, including France, the United

Kingdom, Australia, Brazil, Italy, Canada, Mexico, Poland, India, China and South Africa. In addition, FedEx Express offers

comprehensive international express and deferred freight services, real-time tracking and advanced customs clearance.

In 2021 we introduced new service offerings to enhance our international portfolio. Our enhanced 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 20 countries

and territories. Additionally, FedEx International Connect Plus, a contractual e-commerce service currently available from ten origin

countries to 25 destination countries, provides day-definite delivery typically within two to five business days.

We are currently in the process of migrating customers from services offered by TNT Express to the FedEx Express portfolio of

For information regarding FedEx Express e-commerce tools and solutions, such as FedEx Delivery Manager and FedEx Returns

Technology, see “FedEx Services Segment — Customer-Driven Technology.”

services.

International Expansion

Over the years, acquisitions have given us more robust global transportation networks and added capabilities in important international

markets. In 2016 we acquired TNT Express, which is the largest acquisition in FedEx history. This acquisition rapidly accelerates our

European and global growth, substantially enhances our global footprint through TNT Express’s lower-cost road networks in Europe,

the Middle East and Asia, and expands our capabilities and solutions for our customers. During 2020 we substantially completed

projects across our European hub and station locations that allow interoperability between the ground networks for both FedEx

Express and TNT Express packages. In 2021 we completed the integration of the FedEx Express and TNT Express linehaul and

pickup-and-delivery operations and began offering an enhanced portfolio of international services. We expect to complete the final

phase of international air network interoperability in early calendar 2022.

As we approach the completion of the physical network integration of TNT Express in 2022, we continue to execute initiatives in

addition to the integration to transform and optimize the FedEx Express international business, particularly in Europe. For more

information about the integration of TNT Express, our international strategy and related costs, see “Item 1A. Risk Factors” and “Item

7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report. During 2021 we

also enhanced our Europe-to-the-U.S. overnight and European e-commerce service portfolio with FedEx International Priority Express

and FedEx International Connect Plus, which are discussed above under “Services.”

We also have expanded our capabilities in the Asia-Pacific markets, including through the establishment of: our Asia-Pacific hub at

the Guangzhou Baiyun International Airport in southern China, which began operations in 2009; our North Pacific regional hub at the

Kansai International Airport in Osaka, Japan, which opened in 2014 and serves as a consolidation point for shipments from northern

Asia to the U.S.; and our International Express and Cargo Hub in Shanghai, which opened in 2018 at Shanghai’s Pudong International

Airport. During 2020, we added 14 new Asia-Pacific origin markets for FedEx International First service to the U.S. and Canada.

These developments allow us to continue to better serve our global customers doing business in the Asia-Pacific markets.

To facilitate the use of our growing international network, we offer a full range of international trade consulting services and a variety

of online tools that enable customers to more easily determine and comply with international shipping requirements.

U.S. Postal Service Agreement

In 2013, FedEx Express entered into a new seven-year agreement with the USPS under which FedEx Express provides airport-to-

airport transportation of USPS First Class Mail, Priority Mail Express and Priority Mail within the U.S. In 2017, the parties entered

into an amendment to the agreement whereby the initial renewal period provided in the agreement was exercised in part and the

agreement’s period of performance was extended through September 29, 2024. FedEx Express also provides transportation and

delivery for the USPS’s international delivery service called Global Express Guaranteed under a separate agreement. For more

information about our relationship with the USPS, see “Item 1A. Risk Factors” of this Annual Report.

FedEx Express periodically publishes updates to the list prices for the majority of its services in its Service Guides. In general,
FedEx 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 charge and whether the
shipping rates are based on the service selected, origin, destination, weight, size, any ancillary service charge and whether the
customer charged the shipment to a FedEx account. Effective January 4, 2021, FedEx Express implemented a 4.9% average list price
customer charged the shipment to a FedEx account. Effective January 4, 2021, FedEx Express implemented a 4.9% average list price
increase for U.S. domestic, U.S. export and U.S. import services.
increase for U.S. domestic, U.S. export and U.S. import services.

In order to manage demand and capacity constraints in connection with the COVID-19 pandemic, between April 6, 2020 and
In order to manage demand and capacity constraints in connection with the COVID-19 pandemic, between April 6, 2020 and
November 1, 2020 FedEx Express implemented temporary surcharges on all international package and airfreight shipments. These
November 1, 2020 FedEx Express implemented temporary surcharges on all international package and airfreight shipments. These
surcharges continued as peak surcharges beginning November 2, 2020 and remain in effect. Additionally, beginning June 8, 2020
surcharges continued as peak surcharges beginning November 2, 2020 and remain in effect. Additionally, beginning June 8, 2020
FedEx Express has implemented a series of peak surcharges generally applying to shipments that are oversized or require additional
FedEx Express has implemented a series of peak surcharges generally applying to shipments that are oversized or require additional
handling, and to residential packages for customers meeting a certain volume threshold. Specific applicable surcharges have been
handling, and to residential packages for customers meeting a certain volume threshold. Specific applicable surcharges have been
adjusted periodically since their implementation, and higher surcharges applied during the 2021 holiday peak season. Effective
adjusted periodically since their implementation, and higher surcharges applied during the 2021 holiday peak season. Effective
January 18, 2021, FedEx Express made general changes to the surcharge criteria for certain packages that require additional handling
January 18, 2021, FedEx Express made general changes to the surcharge criteria for certain packages that require additional handling
and for packages that are picked up from or delivered to remote and less accessible locations.
and for packages that are picked up from or delivered to remote and less accessible locations.

FedEx Express has an indexed fuel surcharge for U.S. domestic and U.S. outbound shipments and for shipments originating
FedEx Express has an indexed fuel surcharge for U.S. domestic and U.S. outbound shipments and for shipments originating
internationally, where legally and contractually possible. FedEx Express fuel surcharges are adjusted on a weekly basis. The fuel
internationally, where legally and contractually possible. FedEx Express fuel surcharges are adjusted on a weekly basis. The fuel
surcharge is based on a weekly fuel price from two weeks prior to the week in which it is assessed. Some FedEx Express international
surcharge is based on a weekly fuel price from two weeks prior to the week in which it is assessed. Some FedEx Express international
fuel surcharges incorporate a timing lag of approximately six to eight weeks. On June 21, 2021, we updated the tables used to
fuel surcharges incorporate a timing lag of approximately six to eight weeks. On June 21, 2021, we updated the tables used to
determine our fuel surcharges at FedEx Express. Beginning February 1, 2021, the fuel surcharge for U.S. domestic freight services is
determine our fuel surcharges at FedEx Express. Beginning February 1, 2021, the fuel surcharge for U.S. domestic freight services is
assessed per pound of shipment. The weighted-average U.S. domestic and outbound fuel surcharges for the past three years were:
assessed per pound of shipment. The weighted-average U.S. domestic and outbound fuel surcharges for the past three years were:
2021 — 4.9%; 2020 — 6.3%; and 2019 — 7.5%. See the “Results of Operations and Outlook — Consolidated Results — Fuel”
2021 — 4.9%; 2020 — 6.3%; and 2019 — 7.5%. 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
section of “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report
for a description and discussion of the net impact of fuel on our operating results.
for a description and discussion of the net impact of fuel on our operating results.

Operations
Operations

FedEx Express’s primary sorting facility, located in Memphis, serves as the center of the company’s multiple hub-and-spoke system.
FedEx Express’s primary sorting facility, located in Memphis, serves as the center of the company’s multiple hub-and-spoke system.
A second national hub facility is located in Indianapolis. We are making investments over multiple years in our facilities of
A second national hub facility is located in Indianapolis. We are making investments over multiple years in our facilities of
approximately $1.5 billion to significantly expand the Indianapolis hub and approximately $1.5 billion to modernize the Memphis
approximately $1.5 billion to significantly expand the Indianapolis hub and approximately $1.5 billion to modernize the Memphis
World Hub. In addition to these national hubs, FedEx Express operates regional hubs in Fort Worth, Newark, Oakland and
World Hub. In addition to these national hubs, FedEx Express operates regional hubs in Fort Worth, Newark, Oakland and
Greensboro and major metropolitan sorting facilities in Chicago and Los Angeles.
Greensboro and major metropolitan sorting facilities in Chicago and Los Angeles.

Facilities in Anchorage, Paris, Cologne, Guangzhou and Osaka serve as sorting facilities for express package and freight traffic
Facilities in Anchorage, Paris, Cologne, Guangzhou and Osaka serve as sorting facilities for express package and freight traffic
moving to and from Asia, Europe and North America. Additional major sorting and freight handling facilities are located at Narita
moving to and from Asia, Europe and North America. Additional major sorting and freight handling facilities are located at Narita
Airport in Tokyo and Stansted Airport outside London. The facilities in Paris, Cologne, Guangzhou and Osaka are also designed to
Airport in Tokyo and Stansted Airport outside London. The facilities in Paris, Cologne, Guangzhou and Osaka are also designed to
serve as regional hubs for their respective market areas. A facility in Miami — the Miami Gateway Hub — serves our South Florida,
serve as regional hubs for their respective market areas. A facility in Miami — the Miami Gateway Hub — serves our South Florida,
Latin American and Caribbean markets. TNT Express operates a central air hub near Liege, Belgium.
Latin American and Caribbean markets. TNT Express operates a central air hub near Liege, Belgium.

In addition to its worldwide air network, FedEx Express operates road networks in North America, Europe, the Middle East, Asia,
In addition to its worldwide air network, FedEx Express operates road networks in North America, Europe, the Middle East, Asia,
Australia and South America. FedEx Express’s unique European road network, harnessing the integration of TNT Express, connects
Australia and South America. FedEx Express’s unique European road network, harnessing the integration of TNT Express, connects
more than 40 countries through 34 road hubs and over 570 direct served stations.
more than 40 countries through 34 road hubs and over 570 direct served stations.

Throughout its worldwide network, FedEx Express operates city stations and employs a staff of customer service agents, cargo
Throughout its worldwide network, FedEx Express operates city stations and employs a staff of customer service agents, cargo
handlers and couriers who pick up and deliver shipments in the station’s service area. In some international areas, independent agents
handlers and couriers who pick up and deliver shipments in the station’s service area. In some international areas, independent agents
(“Global Service Participants”) have been selected to complete deliveries and to pick up packages. For more information about our
(“Global Service Participants”) have been selected to complete deliveries and to pick up packages. For more information about our
sorting and handling facilities, see “Item 2. Properties” of this Annual Report under the caption “FedEx Express Segment.”
sorting and handling facilities, see “Item 2. Properties” of this Annual Report under the caption “FedEx Express Segment.”

FedEx Office offers retail access to FedEx Express shipping services at all of its retail locations. FedEx Express also has alliances with
FedEx Office offers retail access to FedEx Express shipping services at all of its retail locations. FedEx Express also has alliances with
certain other retailers to provide in-store drop-off sites, including at more than 18,000 Walgreens, Dollar General and Albertsons
certain other retailers to provide in-store drop-off sites, including at more than 18,000 Walgreens, Dollar General and Albertsons
stores. Our unstaffed FedEx Drop Boxes provide customers the opportunity to drop off packages in office buildings, shopping centers
stores. Our unstaffed FedEx Drop Boxes provide customers the opportunity to drop off packages in office buildings, shopping centers
and corporate or industrial parks.
and corporate or industrial parks.

Fuel Supplies and Costs
Fuel Supplies and Costs

During 2021, FedEx Express purchased jet fuel from various suppliers under contracts that vary in length and which provide for
During 2021, FedEx 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
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. See “Pricing” above.
jet fuel hedging contracts. See “Pricing” above.

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The following table sets forth FedEx Express’s costs for jet fuel and its percentage of FedEx Corporation consolidated revenues for
The following table sets forth FedEx Express’s costs for jet fuel and its percentage of FedEx Corporation consolidated revenues for
the last five fiscal years (amounts include TNT Express):
the last five fiscal years (amounts include TNT Express):

FedEx Cross Border

Fiscal Year
Fiscal Year
2021
2021
2020
2020
2019
2019
2018
2018
2017
2017

$
$

Total Jet
Total Jet
Fuel Cost
Fuel Cost
(in millions)
(in millions)

Percentage of
Percentage of
Consolidated
Consolidated
Revenue
Revenue

2,065
2,065
2,265
2,265
2,847
2,847
2,460
2,460
1,999
1,999

2.5 %
2.5 %
3.3
3.3
4.1
4.1
3.8
3.8
3.3
3.3

international e-commerce customers.

FedEx Ground Segment

Overview

FedEx Cross Border is an e-commerce enabler that provides international cross-border enablement and technology solutions such as

duty calculations, package tracking, international shipping costs and currency conversion calculations. Additionally, FedEx Cross

Border publishes customs duty and tax information for approximately 200 customs areas worldwide through WorldTariff. The

offerings of FedEx Cross Border strategically fit into our global portfolio by allowing us to help retailers and e-tailers reach

Most of FedEx Express’s vehicle fuel needs are satisfied by retail purchases with various discounts.
Most of FedEx Express’s vehicle fuel needs are satisfied by retail purchases with various discounts.

Competition
Competition

As described in “Item 1A. Risk Factors” of this Annual Report, the express package and freight markets are both highly competitive
As described in “Item 1A. Risk Factors” of this Annual Report, the express package and 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
and sensitive to price and service, especially in periods of little or no macroeconomic growth. The ability to compete effectively
depends upon price, frequency, capacity and speed of scheduled service, ability to track packages, extent of geographic coverage,
depends upon price, frequency, capacity and speed of scheduled service, ability to track packages, extent of geographic coverage,
reliability, innovative service offerings and the fit within the customer’s overall supply chain.
reliability, innovative service offerings and the fit within the customer’s overall supply chain.

Competitors within the U.S. include other package delivery concerns, principally United Parcel Service, Inc. (“UPS”), passenger
Competitors within the U.S. 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. FedEx Express’s
airlines offering express package services, regional delivery companies, air freight forwarders and the USPS. FedEx Express’s
principal international competitors are DHL, UPS, DPD (a subsidiary of France’s La Poste’s GeoPost), General Logistics Systems (a
principal international competitors are 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
Royal Mail-owned parcel delivery group), foreign postal authorities, passenger airlines, air freight forwarders, regional carriers, and
all-cargo airlines. FedEx Express also competes with startup companies that combine technology with crowdsourcing to focus on local
all-cargo airlines. FedEx Express also competes 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
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 for deliveries, and may be considered competitors. For example,
delivery capabilities and utilizing independent contractors for deliveries, and may be considered competitors. For example,
Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles. Many of FedEx Express’s
Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles. Many of FedEx Express’s
international competitors are government-owned, -controlled or -subsidized carriers, which may have greater resources, lower costs,
international competitors are government-owned, -controlled or -subsidized carriers, which may have greater resources, lower costs,
less profit sensitivity and more favorable operating conditions than FedEx Express.
less profit sensitivity and more favorable operating conditions than FedEx Express.

Employees
Employees

Donald F. Colleran is the President and Chief Executive Officer of FedEx Express, which is headquartered in Memphis, Tennessee.
Donald F. Colleran is the President and Chief Executive Officer of FedEx Express, which is headquartered in Memphis, Tennessee.
As of May 31, 2021, FedEx Express employed approximately 228,000 permanent full-time and approximately 61,000 permanent part-
As of May 31, 2021, FedEx Express employed approximately 228,000 permanent full-time and approximately 61,000 permanent part-
time employees.
time employees.

The pilots of FedEx Express, who are a small number of its total employees, are represented by the Air Line Pilots Association,
The pilots of FedEx 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 collective bargaining agreement that took effect in November 2015. The collective
International (“ALPA”) and are employed under a collective bargaining agreement that took effect in November 2015. The collective
bargaining agreement is scheduled to become amendable in November 2021, and bargaining for a successor agreement began in May
bargaining agreement is scheduled to become amendable in November 2021, and bargaining for a successor agreement began in May
2021. See “Item 1A. Risk Factors” of this Annual Report for more information. In addition to our pilots at FedEx Express, certain of
2021. See “Item 1A. Risk Factors” of this Annual Report for more information. In addition to our pilots at FedEx Express, certain of
FedEx Express’s non-U.S. employees are unionized.
FedEx Express’s non-U.S. employees are unionized.

Pricing

Attempts by other labor organizations to organize certain other groups of FedEx Express employees occur from time to time.
Attempts by other labor organizations to organize certain other groups of FedEx Express employees occur from time to time.
Although these organizing attempts have not resulted in any certification of a U.S. domestic collective bargaining representative of
Although these organizing attempts have not resulted in any certification of a U.S. domestic collective bargaining representative of
FedEx Express employees (other than ALPA), we cannot predict the outcome of these labor activities or their effect, if any, on FedEx
FedEx Express employees (other than ALPA), we cannot predict the outcome of these labor activities or their effect, if any, on FedEx
Express or its employees. For more information, see “Item 1A. Risk Factors” of this Annual Report. FedEx Express believes its
Express or its employees. For more information, see “Item 1A. Risk Factors” of this Annual Report. FedEx Express believes its
employee relations are excellent.
employee relations are excellent.

FedEx Custom Critical
FedEx Custom Critical

FedEx Custom Critical provides a range of expedited, time-specific freight-shipping services throughout the U.S., Canada and
FedEx Custom Critical provides a range of expedited, time-specific freight-shipping services throughout the U.S., Canada and
Mexico. Among its services are Surface Expedite, providing exclusive-use shipping and time-definite services; Air Expedite, offering
Mexico. Among its services are Surface Expedite, providing exclusive-use shipping and time-definite services; Air Expedite, offering
an array of expedited air solutions to meet customers’ critical delivery times; and White Glove Services, for shipments that require
an array of expedited air solutions to meet customers’ critical delivery times; and White Glove Services, for shipments that require
extra care in handling, temperature control or specialized security. Service from FedEx Custom Critical is available 24 hours a day,
extra care in handling, temperature control or specialized security. Service from FedEx Custom Critical is available 24 hours a day,
365 days a year. FedEx Custom Critical continuously monitors shipments through an integrated proprietary shipment-control system,
365 days a year. FedEx Custom Critical continuously monitors shipments through an integrated proprietary shipment-control system,
including two-way satellite communications on exclusive-use shipments.
including two-way satellite communications on exclusive-use shipments.

By leveraging the FedEx brand, maintaining a low cost structure and efficiently using information technology and advanced

automation systems, FedEx Ground continues to enhance its competitive position as a leading provider of business and residential

money-back guaranteed ground package delivery services. As of July 15, 2021, the money-back guarantee for all FedEx Ground

services remains temporarily suspended as we continue to experience unprecedented volume and customer demand. FedEx Ground

serves customers in the North American small-package market, focusing on business and residential delivery of packages weighing up

to 150 pounds. Ground service is provided to 100% of the continental U.S. population and overnight service of up to 400 miles to

nearly 100% of the continental U.S. population. Service is also provided to nearly 100% of the Canadian population. In addition,

FedEx Ground offers service to Alaska and Hawaii through a ground and air network operation coordinated with other transportation

providers. In 2021 FedEx Ground expanded seven-day-per-week residential delivery coverage to virtually all of the U.S. population.

FedEx Ground continues to improve the speed, reach and service capabilities of its network by reducing transit time for many of its

lanes and introducing and expanding overnight ground service in many metropolitan areas. FedEx Ground’s network expansion has

substantially increased the company’s daily pickup capacity through the addition of new hubs featuring the latest automated sorting

technology and the expansion or relocation of existing hubs and other facilities. Additionally, FedEx Ground is repurposing former

FedEx SmartPost facilities for standard or large package sortation, and adding capacity through new regional sort facilities designed to

handle shorter zone volumes into certain markets. FedEx Ground is also making significant operational enhancements to ensure safe

and reliable handling of large and heavy items. These changes include designing new facilities, adding equipment to certain facilities

and making other operational adjustments.

The company offers our FedEx Home Delivery service, which reaches 100% of U.S. residences. FedEx Home Delivery is dedicated to

meeting the delivery needs of residential customers and provides routine Saturday and evening delivery and premium options such as

day-specific, appointment and signature delivery. Sunday delivery is also provided for virtually all of the U.S. population. FedEx

Home Delivery brings unmatched services to residential shippers and their customers and is the first residential ground package

delivery service to have offered a money-back guarantee. The FedEx Ground Economy (formerly FedEx SmartPost) service

specializes in the consolidation and delivery of high volumes of low-weight, less time-sensitive business-to-consumer packages to any

residential address or PO Box in the U.S. During 2021 we completed the integration of FedEx Ground Economy packages into the

standard FedEx Ground operations, generating last-mile efficiency through increased delivery density.

FedEx Ground periodically publishes updates to the list prices for the majority of its services in its Service Guide. In general, U.S.

shipping rates are based on the service selected, origin, destination, weight, size, any ancillary service charge and whether the

customer charged the shipment to a FedEx account. Effective January 4, 2021, FedEx Ground and FedEx Home Delivery

implemented a 4.9% average list price increase. FedEx Ground Economy average list prices also increased.

In order to manage demand and capacity constraints in connection with the COVID-19 pandemic, beginning June 8, 2020 FedEx

Ground implemented a series of surcharges generally applying to shipments that are oversized, unauthorized or require additional

handling; to residential packages for customers meeting a certain volume threshold; and to FedEx Ground Economy shipments.

Specific applicable surcharges have been adjusted periodically since their implementation, and higher rates applied during the 2021

holiday peak season. Effective January 18, 2021, FedEx Ground made general changes to surcharge criteria for certain packages that

require additional handling.

FedEx Ground has an indexed fuel surcharge, which is adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price

from two weeks prior to the week in which it is assessed. On June 21, 2021, we updated the tables used to determine our fuel

surcharges at FedEx Ground. 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 a description and

discussion of the net impact of fuel on our operating results.

- 12 -
- 12 -

- 13 -

The following table sets forth FedEx Express’s costs for jet fuel and its percentage of FedEx Corporation consolidated revenues for

FedEx Cross Border
FedEx Cross Border

Total Jet

Fuel Cost

(in millions)

Percentage of

Consolidated

Revenue

2,065

2,265

2,847

2,460

1,999

2.5 %

3.3

4.1

3.8

3.3

the last five fiscal years (amounts include TNT Express):

Fiscal Year

2021

2020

2019

2018

2017

Competition

Most of FedEx Express’s vehicle fuel needs are satisfied by retail purchases with various discounts.

As described in “Item 1A. Risk Factors” of this Annual Report, the express package and 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, capacity and speed of scheduled service, ability to track packages, extent of geographic coverage,

reliability, innovative service offerings and the fit within the customer’s overall supply chain.

Competitors within the U.S. 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. FedEx Express’s

principal international competitors are 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. FedEx Express also competes 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 for deliveries, and may be considered competitors. For example,

Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles. Many of FedEx Express’s

international competitors are government-owned, -controlled or -subsidized carriers, which may have greater resources, lower costs,

less profit sensitivity and more favorable operating conditions than FedEx Express.

Employees

time employees.

Donald F. Colleran is the President and Chief Executive Officer of FedEx Express, which is headquartered in Memphis, Tennessee.

As of May 31, 2021, FedEx Express employed approximately 228,000 permanent full-time and approximately 61,000 permanent part-

The pilots of FedEx 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 collective bargaining agreement that took effect in November 2015. The collective

bargaining agreement is scheduled to become amendable in November 2021, and bargaining for a successor agreement began in May

2021. See “Item 1A. Risk Factors” of this Annual Report for more information. In addition to our pilots at FedEx Express, certain of

FedEx Express’s non-U.S. employees are unionized.

Attempts by other labor organizations to organize certain other groups of FedEx Express employees occur from time to time.

Although these organizing attempts have not resulted in any certification of a U.S. domestic collective bargaining representative of

FedEx Express employees (other than ALPA), we cannot predict the outcome of these labor activities or their effect, if any, on FedEx

Express or its employees. For more information, see “Item 1A. Risk Factors” of this Annual Report. FedEx Express believes its

employee relations are excellent.

FedEx Custom Critical

FedEx Custom Critical provides a range of expedited, time-specific freight-shipping services throughout the U.S., Canada and

Mexico. Among its services are Surface Expedite, providing exclusive-use shipping and time-definite services; Air Expedite, offering

an array of expedited air solutions to meet customers’ critical delivery times; and White Glove Services, for shipments that require

extra care in handling, temperature control or specialized security. Service from FedEx Custom Critical is available 24 hours a day,

365 days a year. FedEx Custom Critical continuously monitors shipments through an integrated proprietary shipment-control system,

including two-way satellite communications on exclusive-use shipments.

FedEx Cross Border is an e-commerce enabler that provides international cross-border enablement and technology solutions such as
FedEx Cross Border is an e-commerce enabler that provides international cross-border enablement and technology solutions such as
duty calculations, package tracking, international shipping costs and currency conversion calculations. Additionally, FedEx Cross
duty calculations, package tracking, international shipping costs and currency conversion calculations. Additionally, FedEx Cross
Border publishes customs duty and tax information for approximately 200 customs areas worldwide through WorldTariff. The
Border publishes customs duty and tax information for approximately 200 customs areas worldwide through WorldTariff. The
offerings of FedEx Cross Border strategically fit into our global portfolio by allowing us to help retailers and e-tailers reach
offerings of FedEx Cross Border strategically fit into our global portfolio by allowing us to help retailers and e-tailers reach
international e-commerce customers.
international e-commerce customers.

FedEx Ground Segment
FedEx Ground Segment

Overview
Overview

By leveraging the FedEx brand, maintaining a low cost structure and efficiently using information technology and advanced
By leveraging the FedEx brand, maintaining a low cost structure and efficiently using information technology and advanced
automation systems, FedEx Ground continues to enhance its competitive position as a leading provider of business and residential
automation systems, FedEx Ground continues to enhance its competitive position as a leading provider of business and residential
money-back guaranteed ground package delivery services. As of July 15, 2021, the money-back guarantee for all FedEx Ground
money-back guaranteed ground package delivery services. As of July 15, 2021, the money-back guarantee for all FedEx Ground
services remains temporarily suspended as we continue to experience unprecedented volume and customer demand. FedEx Ground
services remains temporarily suspended as we continue to experience unprecedented volume and customer demand. FedEx Ground
serves customers in the North American small-package market, focusing on business and residential delivery of packages weighing up
serves customers in the North American small-package market, focusing on business and residential delivery of packages weighing up
to 150 pounds. Ground service is provided to 100% of the continental U.S. population and overnight service of up to 400 miles to
to 150 pounds. Ground service is provided to 100% of the continental U.S. population and overnight service of up to 400 miles to
nearly 100% of the continental U.S. population. Service is also provided to nearly 100% of the Canadian population. In addition,
nearly 100% of the continental U.S. population. Service is also provided to nearly 100% of the Canadian population. In addition,
FedEx Ground offers service to Alaska and Hawaii through a ground and air network operation coordinated with other transportation
FedEx Ground offers service to Alaska and Hawaii through a ground and air network operation coordinated with other transportation
providers. In 2021 FedEx Ground expanded seven-day-per-week residential delivery coverage to virtually all of the U.S. population.
providers. In 2021 FedEx Ground expanded seven-day-per-week residential delivery coverage to virtually all of the U.S. population.

FedEx Ground continues to improve the speed, reach and service capabilities of its network by reducing transit time for many of its
FedEx Ground continues to improve the speed, reach and service capabilities of its network by reducing transit time for many of its
lanes and introducing and expanding overnight ground service in many metropolitan areas. FedEx Ground’s network expansion has
lanes and introducing and expanding overnight ground service in many metropolitan areas. FedEx Ground’s network expansion has
substantially increased the company’s daily pickup capacity through the addition of new hubs featuring the latest automated sorting
substantially increased the company’s daily pickup capacity through the addition of new hubs featuring the latest automated sorting
technology and the expansion or relocation of existing hubs and other facilities. Additionally, FedEx Ground is repurposing former
technology and the expansion or relocation of existing hubs and other facilities. Additionally, FedEx Ground is repurposing former
FedEx SmartPost facilities for standard or large package sortation, and adding capacity through new regional sort facilities designed to
FedEx SmartPost facilities for standard or large package sortation, and adding capacity through new regional sort facilities designed to
handle shorter zone volumes into certain markets. FedEx Ground is also making significant operational enhancements to ensure safe
handle shorter zone volumes into certain markets. FedEx Ground is also making significant operational enhancements to ensure safe
and reliable handling of large and heavy items. These changes include designing new facilities, adding equipment to certain facilities
and reliable handling of large and heavy items. These changes include designing new facilities, adding equipment to certain facilities
and making other operational adjustments.
and making other operational adjustments.

The company offers our FedEx Home Delivery service, which reaches 100% of U.S. residences. FedEx Home Delivery is dedicated to
The company offers our FedEx Home Delivery service, which reaches 100% of U.S. residences. FedEx Home Delivery is dedicated to
meeting the delivery needs of residential customers and provides routine Saturday and evening delivery and premium options such as
meeting the delivery needs of residential customers and provides routine Saturday and evening delivery and premium options such as
day-specific, appointment and signature delivery. Sunday delivery is also provided for virtually all of the U.S. population. FedEx
day-specific, appointment and signature delivery. Sunday delivery is also provided for virtually all of the U.S. population. FedEx
Home Delivery brings unmatched services to residential shippers and their customers and is the first residential ground package
Home Delivery brings unmatched services to residential shippers and their customers and is the first residential ground package
delivery service to have offered a money-back guarantee. The FedEx Ground Economy (formerly FedEx SmartPost) service
delivery service to have offered a money-back guarantee. The FedEx Ground Economy (formerly FedEx SmartPost) service
specializes in the consolidation and delivery of high volumes of low-weight, less time-sensitive business-to-consumer packages to any
specializes in the consolidation and delivery of high volumes of low-weight, less time-sensitive business-to-consumer packages to any
residential address or PO Box in the U.S. During 2021 we completed the integration of FedEx Ground Economy packages into the
residential address or PO Box in the U.S. During 2021 we completed the integration of FedEx Ground Economy packages into the
standard FedEx Ground operations, generating last-mile efficiency through increased delivery density.
standard FedEx Ground operations, generating last-mile efficiency through increased delivery density.

Pricing
Pricing

FedEx Ground periodically publishes updates to the list prices for the majority of its services in its Service Guide. In general, U.S.
FedEx Ground periodically publishes updates to the list prices for the majority of its services in its Service Guide. In general, U.S.
shipping rates are based on the service selected, origin, destination, weight, size, any ancillary service charge and whether the
shipping rates are based on the service selected, origin, destination, weight, size, any ancillary service charge and whether the
customer charged the shipment to a FedEx account. Effective January 4, 2021, FedEx Ground and FedEx Home Delivery
customer charged the shipment to a FedEx account. Effective January 4, 2021, FedEx Ground and FedEx Home Delivery
implemented a 4.9% average list price increase. FedEx Ground Economy average list prices also increased.
implemented a 4.9% average list price increase. FedEx Ground Economy average list prices also increased.

In order to manage demand and capacity constraints in connection with the COVID-19 pandemic, beginning June 8, 2020 FedEx
In order to manage demand and capacity constraints in connection with the COVID-19 pandemic, beginning June 8, 2020 FedEx
Ground implemented a series of surcharges generally applying to shipments that are oversized, unauthorized or require additional
Ground implemented a series of surcharges generally applying to shipments that are oversized, unauthorized or require additional
handling; to residential packages for customers meeting a certain volume threshold; and to FedEx Ground Economy shipments.
handling; to residential packages for customers meeting a certain volume threshold; and to FedEx Ground Economy shipments.
Specific applicable surcharges have been adjusted periodically since their implementation, and higher rates applied during the 2021
Specific applicable surcharges have been adjusted periodically since their implementation, and higher rates applied during the 2021
holiday peak season. Effective January 18, 2021, FedEx Ground made general changes to surcharge criteria for certain packages that
holiday peak season. Effective January 18, 2021, FedEx Ground made general changes to surcharge criteria for certain packages that
require additional handling.
require additional handling.

FedEx Ground has an indexed fuel surcharge, which is adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price
FedEx Ground has an indexed fuel surcharge, which is adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price
from two weeks prior to the week in which it is assessed. On June 21, 2021, we updated the tables used to determine our fuel
from two weeks prior to the week in which it is assessed. On June 21, 2021, we updated the tables used to determine our fuel
surcharges at FedEx Ground. See the “Results of Operations and Outlook — Consolidated Results — Fuel” section of “Item 7.
surcharges at FedEx Ground. 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 a description and
Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report for a description and
discussion of the net impact of fuel on our operating results.
discussion of the net impact of fuel on our operating results.

- 12 -

- 13 -
- 13 -

Operations
Operations

FedEx Ground operates a multiple hub-and-spoke sorting and distribution system that consisted of 625 facilities, including 40 hubs, in
FedEx Ground operates a multiple hub-and-spoke sorting and distribution system that consisted of 625 facilities, including 40 hubs, in
the U.S. and Canada as of May 31, 2021. FedEx Ground conducts its operations primarily with approximately 96,000 vehicles owned
the U.S. and Canada as of May 31, 2021. FedEx Ground conducts its operations primarily with approximately 96,000 vehicles owned
or leased by separate service providers. To provide FedEx Home Delivery service and FedEx Ground Economy service, FedEx
or leased by separate service providers. To provide FedEx Home Delivery service and FedEx Ground Economy service, FedEx
Ground leverages its pickup operation and hub and linehaul network.
Ground leverages its pickup operation and hub and linehaul network.

Advanced automated unloading and sorting technology is used to streamline the handling of millions of packages daily. FedEx
Advanced automated unloading and sorting technology is used to streamline the handling of millions of packages daily. FedEx
Ground yard management systems, which interact with GPS tags on each trailer and create geofences around FedEx Ground facilities,
Ground yard management systems, which interact with GPS tags on each trailer and create geofences around FedEx Ground facilities,
automatically notify the control center when a trailer arrives and departs. Using overhead laser and six-sided camera-based bar code
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
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. Autonomous, driverless technologies enable FedEx Ground to
transport to their respective destination stations for local delivery. Autonomous, driverless technologies enable FedEx Ground to
handle large, non-conveyable packages. FedEx Ground is also implementing dynamic scheduling tools to match sort staffing
handle large, non-conveyable packages. FedEx Ground is also implementing dynamic scheduling tools to match sort staffing
headcount with volumes, and is introducing capabilities to allow certain packages to bypass station sortation and proceed directly to
headcount 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.
vehicles, which helps to maximize station capacity.

During 2021 FedEx Ground finalized the rollout of dynamic route optimization technology, which provides service providers near
During 2021 FedEx Ground finalized the rollout of dynamic route optimization technology, which provides service providers near
real-time data that can be used to plan efficient delivery routes and make decisions about vehicle mix and workforce to accommodate
real-time data that can be used to plan efficient delivery routes and make decisions about vehicle mix and workforce to accommodate
the volume associated with e-commerce growth. Additionally, software systems and internet-based applications are deployed to offer
the volume associated with e-commerce growth. Additionally, software systems and internet-based applications are deployed to offer
customers new ways to connect internal package data with external delivery information. FedEx Ground provides shipment tracing
customers new ways to connect internal package data with external delivery information. FedEx Ground provides shipment tracing
and proof-of-delivery signature functionality through the FedEx website, fedex.com. For additional information regarding FedEx
and proof-of-delivery signature functionality through the FedEx website, fedex.com. For additional information regarding FedEx
Ground e-commerce tools and solutions, including FedEx Delivery Manager and FedEx Returns Technology, see “FedEx Services
Ground e-commerce tools and solutions, including FedEx Delivery Manager and FedEx Returns Technology, see “FedEx Services
Segment — Customer-Driven Technology.”
Segment — Customer-Driven Technology.”

FedEx Office offers retail access to FedEx Ground shipping services at all of its retail locations. FedEx Ground is also available as a
FedEx Office offers retail access to FedEx Ground shipping services at all of its retail locations. FedEx Ground is also available as a
service option at all FedEx Authorized ShipCenters and other FedEx OnSite locations, including at approximately 18,000 Walgreens,
service option at all FedEx Authorized ShipCenters and other FedEx OnSite locations, including at approximately 18,000 Walgreens,
Dollar General and Albertsons stores.
Dollar General and Albertsons stores.

As of May 31, 2021, FedEx Ground employed approximately 56,000 permanent full-time and approximately 125,000 permanent part-
As of May 31, 2021, FedEx Ground employed approximately 56,000 permanent full-time and approximately 125,000 permanent part-
time employees. During 2021 we have continued to increase hiring at FedEx Ground to keep pace with demand for residential services
time employees. During 2021 we have continued to increase hiring at FedEx Ground to keep pace with demand for residential services
caused by the COVID-19 pandemic. In addition, FedEx Ground relies on independent small businesses to conduct its linehaul and
caused by the COVID-19 pandemic. In addition, FedEx Ground relies on independent small businesses to conduct its linehaul and
pickup-and-delivery operations, as the use of these service providers is well suited to the needs of the ground delivery business and its
pickup-and-delivery operations, as the use of these service providers is well suited to the needs of the ground delivery business and its
customers.
customers.

FedEx Ground is defending lawsuits in which it is alleged that FedEx Ground should be treated as an employer of drivers employed
FedEx Ground is defending lawsuits in which it is alleged that FedEx Ground should be treated as an employer of drivers employed
by service providers engaged by FedEx Ground. We continue to believe that FedEx Ground is not an employer or joint employer of
by service providers engaged by FedEx Ground. We continue to believe that FedEx Ground is not an employer or joint employer of
the drivers of these independent businesses. For a description of these proceedings, see “Item 1A. Risk Factors” of this Annual Report
the drivers of these independent businesses. For a description of these proceedings, see “Item 1A. Risk Factors” of this Annual Report
and Note 19 of the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this
and Note 19 of the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this
Annual Report.
Annual Report.

John A. Smith is the President and Chief Executive Officer of FedEx Ground. FedEx Ground is headquartered in the Pittsburgh,
John A. Smith is the President and Chief Executive Officer of FedEx Ground. FedEx Ground is headquartered in the Pittsburgh,
Pennsylvania area, and its primary competitors are UPS, the USPS and regional delivery carriers. FedEx Ground also competes with
Pennsylvania area, and its primary competitors are UPS, the USPS and regional delivery carriers. FedEx Ground also competes with
startup companies that combine technology with crowdsourcing to focus on local market needs. In addition, some high volume
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
package shippers, such as Amazon.com, are developing and implementing in-house delivery capabilities and utilizing independent
contractors for deliveries, and may be considered competitors. For example, Amazon.com is investing significant capital to establish a
contractors for deliveries, and may be considered competitors. For example, Amazon.com is investing significant capital to establish a
network of hubs and vehicles.
network of hubs and vehicles.

FedEx Freight Segment
FedEx Freight Segment

FedEx Freight is a leading North American provider of LTL freight services, offering choice, simplicity and reliability to meet the
FedEx Freight is a leading North American provider of LTL freight services, offering choice, simplicity and reliability to meet the
needs of LTL shippers — FedEx Freight Priority, when speed is critical to meet a customer’s supply chain needs; FedEx Freight
needs of LTL shippers — FedEx Freight Priority, when speed is critical to meet a customer’s supply chain needs; FedEx Freight
Economy, when a customer can trade time for cost savings; and FedEx Freight Direct, a service to meet the needs of the growing e-
Economy, when a customer can trade time for cost savings; and FedEx Freight Direct, a service to meet the needs of the growing e-
commerce market for delivery of heavy, bulky products to or through the door for residences and businesses. Through one
commerce market for delivery of heavy, bulky products to or through the door for residences and businesses. Through one
comprehensive network of service centers and advanced information systems, FedEx Freight provides service to virtually every U.S.
comprehensive network of service centers and advanced information systems, FedEx Freight provides service to virtually every U.S.
ZIP Code (including Alaska and Hawaii) with industry-leading transit times. FedEx Freight Priority has the fastest published transit
ZIP Code (including Alaska and Hawaii) with industry-leading transit times. FedEx Freight Priority has the fastest published transit
times of any nationwide LTL service. Internationally, FedEx Freight Canada offers FedEx Freight Priority service, serving most points
times of any nationwide LTL service. Internationally, FedEx Freight Canada offers FedEx Freight Priority service, serving most points
in Canada, as well as FedEx Freight Priority and FedEx Freight Economy service between Canada and the U.S. In addition, FedEx
in Canada, as well as FedEx Freight Priority and FedEx Freight Economy service between Canada and the U.S. In addition, FedEx
Freight serves Mexico, Puerto Rico and the U.S. Virgin Islands via alliances. As of July 15, 2021, the money-back guarantee for all
Freight serves Mexico, Puerto Rico and the U.S. Virgin Islands via alliances. As of July 15, 2021, the money-back guarantee for all
FedEx Freight services remains temporarily suspended as we continue to experience unprecedented volume and customer demand.
FedEx Freight services remains temporarily suspended as we continue to experience unprecedented volume and customer demand.

Through its many service offerings, FedEx Freight can match customers’ time-critical needs with industry-leading transit times. With

the expansion of FedEx electronic solutions, LTL shippers have the convenience of a single shipping and tracking solution for FedEx

Freight, FedEx Express and FedEx Ground. These solutions make freight shipping easier and provide customers easy access to their

account information. The FedEx Freight Advance Notice feature available on FedEx Freight Priority shipments uses the company’s

innovative technology systems to proactively notify FedEx Freight customers via the internet, e-mail or fax when a shipment may be

delayed beyond its estimated delivery date, providing customers with greater visibility and control of their LTL freight shipments.

Customers can also process cross-border LTL shipments to and from Canada and Mexico, as well as intra-Canada and -Mexico

shipments, through FedEx Ship Manager at fedex.com, FedEx Ship Manager Software, FedEx Ship Manager Server and FedEx Web

Services. Additionally, FedEx Freight A.M. Delivery offers freight delivery by 10:30 a.m. within and between the U.S. and Canada.

FedEx Freight also offers LTL Select, a free cloud-based, multi-carrier transportation management system that provides customers

with visibility into all available carriers and their pricing in one location, as well as the ability to book service and make payments.

FedEx Freight Direct addresses the large, bulky and hard-to-handle surging e-commerce market and supports ongoing collaboration

between FedEx Freight and FedEx Ground. It has three service levels to meet speed and budget needs, with the basic service level

available to 100 percent of the contiguous U.S. population and standard and premium service level offerings available to 90% of the

U.S. population.

FedEx Freight periodically publishes updates to the list prices for the majority of its services in its 100 Rules Tariff. In general,

shipping rates are based on the service selected, origin, destination, weight, class, any ancillary service charge and whether the

customer charged the shipment to a FedEx account. On January 4, 2021, FedEx Freight implemented a 4.9% average list price

increase for customers who use FXF PZONE and FXF FZONE rates, and a 5.9% average list price increase for customers who use

FXF 1000 and FXF 501 rates for shipments within the U.S. and between the contiguous U.S. and Canada. Effective January 18, 2021,

FedEx Freight added a surcharge for shipments under a certain classification of base rates and within select U.S. zip codes.

FedEx Freight has an indexed fuel surcharge, which is adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price

from two days prior to the day in which it is assessed. 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 a description and discussion of the net impact of fuel on our operating results.

As of May 31, 2021, the FedEx Freight segment was operating approximately 29,000 vehicles from a network of nearly 400 service

centers and had approximately 44,000 employees. Lance D. Moll is the President and Chief Executive Officer of FedEx Freight,

which is based in Memphis, Tennessee. FedEx Freight’s primary competitors are YRC Worldwide Inc. (which includes YRC

Regional Transportation and YRC Freight), XPO Logistics, Inc., Old Dominion Freight Line, Inc., ABF Freight (an ArcBest

company), SAIA, Inc. and TFI International Inc.

In 2014 and 2015, the International Brotherhood of Teamsters (“Teamsters”) petitioned for National Labor Relations Board (“NLRB”)

elections at sixteen FedEx Freight facilities. The Teamsters lost the vote or withdrew the petition prior to the election at twelve

facilities and won the vote at four facilities. To date, at three of the four FedEx Freight facilities that originally voted for Teamster

representation, the Teamsters have either been decertified by employee vote or voluntarily withdrawn as bargaining representative.

We are currently bargaining with the union at the other facility.

FedEx Services Segment

FedEx Services provides our other companies with sales, marketing, information technology, communications, customer service,

technical support, billing and collection services, and certain other back-office support. Through FedEx Services, we provide a

convenient single point of access for many customer support functions, enabling us to more effectively sell the entire portfolio of

transportation services and to help ensure a consistent and outstanding experience for our customers.

Rajesh Subramaniam and Robert B. Carter each serve as the Co-President and Co-Chief Executive Officer of FedEx Services, which

is based in Memphis, Tennessee. As of May 31, 2021, the FedEx Services segment had approximately 15,000 employees.

Customer-Driven Technology

FedEx is a world leader in technology, and FedEx founder 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

deliveries. We continue to expand our e-commerce convenience network and explore innovative alternatives to help customers and

businesses deliver. During 2021 we continued to advance a major information technology transition from traditional mainframe

computing to cloud-based systems, which is delivering significant benefits in terms of flexibility, security, speed to market and

resiliency.

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Operations

FedEx Ground operates a multiple hub-and-spoke sorting and distribution system that consisted of 625 facilities, including 40 hubs, in

the U.S. and Canada as of May 31, 2021. FedEx Ground conducts its operations primarily with approximately 96,000 vehicles owned

or leased by separate service providers. To provide FedEx Home Delivery service and FedEx Ground Economy service, FedEx

Ground leverages its pickup operation and hub and linehaul network.

Advanced automated unloading and sorting technology is used to streamline the handling of millions of packages daily. FedEx

Ground yard management systems, which interact with GPS tags on each trailer and create geofences around FedEx Ground facilities,

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. Autonomous, driverless technologies enable FedEx Ground to

handle large, non-conveyable packages. FedEx Ground is also implementing dynamic scheduling tools to match sort staffing

headcount 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.

During 2021 FedEx Ground finalized the rollout of dynamic route optimization technology, which provides service providers near

real-time data that can be used to plan efficient delivery routes and make decisions about vehicle mix and workforce to accommodate

the volume associated with e-commerce growth. Additionally, software systems and internet-based applications are deployed to offer

customers new ways to connect internal package data with external delivery information. FedEx Ground provides shipment tracing

and proof-of-delivery signature functionality through the FedEx website, fedex.com. For additional information regarding FedEx

Ground e-commerce tools and solutions, including FedEx Delivery Manager and FedEx Returns Technology, see “FedEx Services

Segment — Customer-Driven Technology.”

FedEx Office offers retail access to FedEx Ground shipping services at all of its retail locations. FedEx Ground is also available as a

service option at all FedEx Authorized ShipCenters and other FedEx OnSite locations, including at approximately 18,000 Walgreens,

Dollar General and Albertsons stores.

As of May 31, 2021, FedEx Ground employed approximately 56,000 permanent full-time and approximately 125,000 permanent part-

time employees. During 2021 we have continued to increase hiring at FedEx Ground to keep pace with demand for residential services

caused by the COVID-19 pandemic. In addition, FedEx Ground relies on independent small businesses to conduct its linehaul and

pickup-and-delivery operations, as the use of these service providers is well suited to the needs of the ground delivery business and its

customers.

Annual Report.

FedEx Ground is defending lawsuits in which it is alleged that FedEx Ground should be treated as an employer of drivers employed

by service providers engaged by FedEx Ground. We continue to believe that FedEx Ground is not an employer or joint employer of

the drivers of these independent businesses. For a description of these proceedings, see “Item 1A. Risk Factors” of this Annual Report

and Note 19 of the consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this

John A. Smith is the President and Chief Executive Officer of FedEx Ground. FedEx Ground is headquartered in the Pittsburgh,

Pennsylvania area, and its primary competitors are UPS, the USPS and regional delivery carriers. FedEx Ground also competes 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 for deliveries, and may be considered competitors. For example, Amazon.com is investing significant capital to establish a

network of hubs and vehicles.

FedEx Freight Segment

FedEx Freight is a leading North American provider of LTL freight services, offering choice, simplicity and reliability to meet the

needs of LTL shippers — FedEx Freight Priority, when speed is critical to meet a customer’s supply chain needs; FedEx Freight

Economy, when a customer can trade time for cost savings; and FedEx Freight Direct, a service to meet the needs of the growing e-

commerce market for delivery of heavy, bulky products to or through the door for residences and businesses. Through one

comprehensive network of service centers and advanced information systems, FedEx Freight provides service to virtually every U.S.

ZIP Code (including Alaska and Hawaii) with industry-leading transit times. FedEx Freight Priority has the fastest published transit

times of any nationwide LTL service. Internationally, FedEx Freight Canada offers FedEx Freight Priority service, serving most points

in Canada, as well as FedEx Freight Priority and FedEx Freight Economy service between Canada and the U.S. In addition, FedEx

Freight serves Mexico, Puerto Rico and the U.S. Virgin Islands via alliances. As of July 15, 2021, the money-back guarantee for all

FedEx Freight services remains temporarily suspended as we continue to experience unprecedented volume and customer demand.

Through its many service offerings, FedEx Freight can match customers’ time-critical needs with industry-leading transit times. With
Through its many service offerings, FedEx Freight can match customers’ time-critical needs with industry-leading transit times. With
the expansion of FedEx electronic solutions, LTL shippers have the convenience of a single shipping and tracking solution for FedEx
the expansion of FedEx electronic solutions, LTL shippers have the convenience of a single shipping and tracking solution for FedEx
Freight, FedEx Express and FedEx Ground. These solutions make freight shipping easier and provide customers easy access to their
Freight, FedEx Express and FedEx Ground. These solutions make freight shipping easier and provide customers easy access to their
account information. The FedEx Freight Advance Notice feature available on FedEx Freight Priority shipments uses the company’s
account information. The FedEx Freight Advance Notice feature available on FedEx Freight Priority shipments uses the company’s
innovative technology systems to proactively notify FedEx Freight customers via the internet, e-mail or fax when a shipment may be
innovative technology systems to proactively notify FedEx Freight customers via the internet, e-mail or fax when a shipment may be
delayed beyond its estimated delivery date, providing customers with greater visibility and control of their LTL freight shipments.
delayed beyond its estimated delivery date, providing customers with greater visibility and control of their LTL freight shipments.
Customers can also process cross-border LTL shipments to and from Canada and Mexico, as well as intra-Canada and -Mexico
Customers can also process cross-border LTL shipments to and from Canada and Mexico, as well as intra-Canada and -Mexico
shipments, through FedEx Ship Manager at fedex.com, FedEx Ship Manager Software, FedEx Ship Manager Server and FedEx Web
shipments, through FedEx Ship Manager at fedex.com, FedEx Ship Manager Software, FedEx Ship Manager Server and FedEx Web
Services. Additionally, FedEx Freight A.M. Delivery offers freight delivery by 10:30 a.m. within and between the U.S. and Canada.
Services. Additionally, FedEx Freight A.M. Delivery offers freight delivery by 10:30 a.m. within and between the U.S. and Canada.
FedEx Freight also offers LTL Select, a free cloud-based, multi-carrier transportation management system that provides customers
FedEx Freight also offers LTL Select, a free cloud-based, multi-carrier transportation management system that provides customers
with visibility into all available carriers and their pricing in one location, as well as the ability to book service and make payments.
with visibility into all available carriers and their pricing in one location, as well as the ability to book service and make payments.

FedEx Freight Direct addresses the large, bulky and hard-to-handle surging e-commerce market and supports ongoing collaboration
FedEx Freight Direct addresses the large, bulky and hard-to-handle surging e-commerce market and supports ongoing collaboration
between FedEx Freight and FedEx Ground. It has three service levels to meet speed and budget needs, with the basic service level
between FedEx Freight and FedEx Ground. It has three service levels to meet speed and budget needs, with the basic service level
available to 100 percent of the contiguous U.S. population and standard and premium service level offerings available to 90% of the
available to 100 percent of the contiguous U.S. population and standard and premium service level offerings available to 90% of the
U.S. population.
U.S. population.

FedEx Freight periodically publishes updates to the list prices for the majority of its services in its 100 Rules Tariff. In general,
FedEx Freight periodically publishes updates to the list prices for the majority of its services in its 100 Rules Tariff. In general,
shipping rates are based on the service selected, origin, destination, weight, class, any ancillary service charge and whether the
shipping rates are based on the service selected, origin, destination, weight, class, any ancillary service charge and whether the
customer charged the shipment to a FedEx account. On January 4, 2021, FedEx Freight implemented a 4.9% average list price
customer charged the shipment to a FedEx account. On January 4, 2021, FedEx Freight implemented a 4.9% average list price
increase for customers who use FXF PZONE and FXF FZONE rates, and a 5.9% average list price increase for customers who use
increase for customers who use FXF PZONE and FXF FZONE rates, and a 5.9% average list price increase for customers who use
FXF 1000 and FXF 501 rates for shipments within the U.S. and between the contiguous U.S. and Canada. Effective January 18, 2021,
FXF 1000 and FXF 501 rates for shipments within the U.S. and between the contiguous U.S. and Canada. Effective January 18, 2021,
FedEx Freight added a surcharge for shipments under a certain classification of base rates and within select U.S. zip codes.
FedEx Freight added a surcharge for shipments under a certain classification of base rates and within select U.S. zip codes.

FedEx Freight has an indexed fuel surcharge, which is adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price
FedEx Freight has an indexed fuel surcharge, which is adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price
from two days prior to the day in which it is assessed. See the “Results of Operations and Outlook — Consolidated Results — Fuel”
from two days prior to the day in which it is assessed. 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
section of “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual Report
for a description and discussion of the net impact of fuel on our operating results.
for a description and discussion of the net impact of fuel on our operating results.

As of May 31, 2021, the FedEx Freight segment was operating approximately 29,000 vehicles from a network of nearly 400 service
As of May 31, 2021, the FedEx Freight segment was operating approximately 29,000 vehicles from a network of nearly 400 service
centers and had approximately 44,000 employees. Lance D. Moll is the President and Chief Executive Officer of FedEx Freight,
centers and had approximately 44,000 employees. Lance D. Moll is the President and Chief Executive Officer of FedEx Freight,
which is based in Memphis, Tennessee. FedEx Freight’s primary competitors are YRC Worldwide Inc. (which includes YRC
which is based in Memphis, Tennessee. FedEx Freight’s primary competitors are YRC Worldwide Inc. (which includes YRC
Regional Transportation and YRC Freight), XPO Logistics, Inc., Old Dominion Freight Line, Inc., ABF Freight (an ArcBest
Regional Transportation and YRC Freight), XPO Logistics, Inc., Old Dominion Freight Line, Inc., ABF Freight (an ArcBest
company), SAIA, Inc. and TFI International Inc.
company), SAIA, Inc. and TFI International Inc.

In 2014 and 2015, the International Brotherhood of Teamsters (“Teamsters”) petitioned for National Labor Relations Board (“NLRB”)
In 2014 and 2015, the International Brotherhood of Teamsters (“Teamsters”) petitioned for National Labor Relations Board (“NLRB”)
elections at sixteen FedEx Freight facilities. The Teamsters lost the vote or withdrew the petition prior to the election at twelve
elections at sixteen FedEx Freight facilities. The Teamsters lost the vote or withdrew the petition prior to the election at twelve
facilities and won the vote at four facilities. To date, at three of the four FedEx Freight facilities that originally voted for Teamster
facilities and won the vote at four facilities. To date, at three of the four FedEx Freight facilities that originally voted for Teamster
representation, the Teamsters have either been decertified by employee vote or voluntarily withdrawn as bargaining representative.
representation, the Teamsters have either been decertified by employee vote or voluntarily withdrawn as bargaining representative.
We are currently bargaining with the union at the other facility.
We are currently bargaining with the union at the other facility.

FedEx Services Segment
FedEx Services Segment

FedEx Services provides our other companies with sales, marketing, information technology, communications, customer service,
FedEx Services provides our other companies with sales, marketing, information technology, communications, customer service,
technical support, billing and collection services, and certain other back-office support. Through FedEx Services, we provide a
technical support, billing and collection services, and certain other back-office support. Through FedEx Services, we provide a
convenient single point of access for many customer support functions, enabling us to more effectively sell the entire portfolio of
convenient single point of access for many customer support functions, enabling us to more effectively sell the entire portfolio of
transportation services and to help ensure a consistent and outstanding experience for our customers.
transportation services and to help ensure a consistent and outstanding experience for our customers.

Rajesh Subramaniam and Robert B. Carter each serve as the Co-President and Co-Chief Executive Officer of FedEx Services, which
Rajesh Subramaniam and Robert B. Carter each serve as the Co-President and Co-Chief Executive Officer of FedEx Services, which
is based in Memphis, Tennessee. As of May 31, 2021, the FedEx Services segment had approximately 15,000 employees.
is based in Memphis, Tennessee. As of May 31, 2021, the FedEx Services segment had approximately 15,000 employees.

Customer-Driven Technology
Customer-Driven Technology

FedEx is a world leader in technology, and FedEx founder Frederick W. Smith’s vision that “the information about a package is as
FedEx is a world leader in technology, and FedEx founder 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
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.
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
Additionally, FedEx stands at the nexus of digital and physical networks, a crucial intersection for the success of e-commerce
deliveries. We continue to expand our e-commerce convenience network and explore innovative alternatives to help customers and
deliveries. We continue to expand our e-commerce convenience network and explore innovative alternatives to help customers and
businesses deliver. During 2021 we continued to advance a major information technology transition from traditional mainframe
businesses deliver. During 2021 we continued to advance a major information technology transition from traditional mainframe
computing to cloud-based systems, which is delivering significant benefits in terms of flexibility, security, speed to market and
computing to cloud-based systems, which is delivering significant benefits in terms of flexibility, security, speed to market and
resiliency.
resiliency.

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Shipping Management and Precision Tracking
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
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. FedEx Virtual Assistant on
within FedEx Tracking provides customers with a consolidated view of inbound and outbound shipments. FedEx Virtual Assistant on
fedex.com is an artificial-intelligence-enabled service that provides answers to customer shipping questions, allowing our customer
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. International Shipping Assist on
service representatives and sales professionals to focus on higher-value customer interactions. International Shipping Assist on
fedex.com uses artificial intelligence to continually improve the process of completing the complicated paperwork required for
fedex.com uses artificial intelligence to continually improve the process of completing the complicated paperwork required for
international shipping.
international shipping.

FedEx Surround allows any business to enhance visibility into its supply chain by leveraging data to provide near-real-time analytics
FedEx Surround allows any business to enhance visibility into its supply chain by leveraging data to provide near-real-time analytics
into shipment tracking, which will drive more precise logistics and inventory management. SenseAware, a FedEx innovation currently
into shipment tracking, which will drive more precise logistics and inventory management. SenseAware, a FedEx innovation currently
available in nearly 90 countries worldwide, allows customers to stay connected to their critical shipments by providing real-time
available in nearly 90 countries worldwide, allows customers to stay connected to their critical shipments by providing real-time
updates regarding current location, precise temperature, relative humidity, barometric pressure readings, light exposure and shock
updates regarding current location, precise temperature, relative humidity, barometric pressure readings, light exposure and shock
events. Additionally, in 2021 we launched FedEx SenseAware ID, a lightweight sensor-based logistics device that delivers a new level
events. Additionally, in 2021 we launched FedEx SenseAware ID, a lightweight sensor-based logistics device that delivers a new level
of precision tracking. The enhanced location visibility provided by FedEx SenseAware ID will create opportunities for FedEx
of precision tracking. The enhanced location visibility provided by FedEx SenseAware ID will create opportunities for FedEx
customers to reimagine their supply chains through real-time updates on a package’s location within the FedEx Express network. An
customers to reimagine their supply chains through real-time updates on a package’s location within the FedEx Express network. An
initial round of customers in the healthcare, aerospace and retail industries received access to FedEx SenseAware ID data in
initial round of customers in the healthcare, aerospace and retail industries received access to FedEx SenseAware ID data in
November 2020, and FedEx is currently expanding access to additional customers. We plan to eventually make FedEx SenseAware ID
November 2020, and FedEx is currently expanding access to additional customers. We plan to eventually make FedEx SenseAware ID
available for a broad range of premium FedEx Express services.
available for a broad range of premium FedEx Express services.

FedEx Mobile is a suite of solutions including the FedEx mobile application, FedEx mobile website and SMS text messaging. The
FedEx Mobile is a suite of solutions including the FedEx mobile application, FedEx mobile website and SMS text messaging. The
FedEx Mobile app provides convenience for recipients to track packages, get quick rates and estimated delivery times, quickly find
FedEx Mobile app provides convenience for recipients to track packages, get quick rates and estimated delivery times, quickly find
the nearest FedEx location and easily access FedEx Delivery Manager to customize home deliveries. It is available on Android™ and
the nearest FedEx location and easily access FedEx Delivery Manager to customize home deliveries. It is available on Android™ and
Apple devices. The FedEx mobile website has expanded to more than 220 countries and territories and 40 languages. FedEx Mobile
Apple devices. The FedEx mobile website has expanded to more than 220 countries and territories and 40 languages. FedEx Mobile
allows customers to track packages, create shipping labels, view account-specific rate quotes and access drop-off location information.
allows customers to track packages, create shipping labels, view account-specific rate quotes and access drop-off location information.
SMS Notifications allows customers to track or follow a package via text messaging, and it is currently available in five countries.
SMS Notifications allows customers to track or follow a package via text messaging, and it is currently available in five countries.

Our FedEx Ship Manager suite of solutions offers a wide range of options to help our customers manage their parcel and LTL
Our FedEx Ship Manager suite of solutions offers a wide range of options to help our customers manage their parcel and LTL
shipping and associated processes. Additionally, our state-of-the-art Packaging Lab designs innovative custom packaging solutions to
shipping and associated processes. Additionally, our state-of-the-art Packaging Lab designs innovative custom packaging solutions to
keep shipments protected through transit.
keep shipments protected through transit.

E-Commerce Solutions
E-Commerce Solutions

FedEx Delivery Manager allows our U.S. residential customers to customize home deliveries to fit their schedule by providing a range
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
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
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.
shipments, manage inventory, analyze returns trends and make more informed decisions based on shoppers’ returns behaviors.

FedEx OnSite, our retail convenience network, utilizes third-party retailers to receive and hold packages for FedEx customers. As of
FedEx OnSite, our retail convenience network, utilizes third-party retailers to receive and hold packages for FedEx customers. As of
July 15, 2021, the FedEx OnSite network has grown to include approximately 18,000 Walgreens, Dollar General and Albertsons
July 15, 2021, the FedEx OnSite network has grown to include approximately 18,000 Walgreens, Dollar General and Albertsons
stores in addition to our more than 2,200 FedEx Office locations. In addition to allowing for an easy returns and drop-off experience
stores in addition to our more than 2,200 FedEx Office locations. In addition to allowing for an easy returns and drop-off experience
for shoppers, the FedEx OnSite network is well positioned to serve as a “buy online, pickup in store” network for small and medium
for shoppers, the FedEx OnSite 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 to the Walgreens retail network, which
merchants without brick-and-mortar locations. We have also added FedEx Returns Technology to the Walgreens retail network, which
allows for in-store printing of return shipping labels and eliminates the need to include a return label in every package.
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
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 FedEx Express, with next-day local delivery and two-day
fulfill e-commerce orders into the evening and receive late pickups by FedEx Express, 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
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
extend evening order cutoff times by five to eight hours, with some as late as midnight, depending on their current order fulfillment
process.
process.

FedEx Dataworks
FedEx Dataworks

The size and scale of our global network, and the more than 19 million packages that traverse it every day, gives us a bird’s-eye view
The size and scale of our global network, and the more than 19 million packages that traverse it every day, gives us a bird’s-eye view
of global supply chains and trends. This foundation provides an immense amount of data we can use to build better insights, increase
of global supply chains and trends. This foundation provides an immense amount of data we can use to build better insights, increase
visibility and improve the customer experience. To fully harness the power of this data, in 2021 we launched FedEx Dataworks, a new
visibility and improve the customer experience. To fully harness the power of this data, in 2021 we launched FedEx Dataworks, a new
organization focused on putting our data into context and using it to transform the digital and physical experiences of our customers
organization focused on putting our data into context and using it to transform the digital and physical experiences of our customers
and team members. FedEx Dataworks will create solutions that build “the network for what’s next” by collaborating across the FedEx
and team members. FedEx Dataworks will create solutions that build “the network for what’s next” by collaborating across the FedEx
enterprise to integrate the technology and services integral to the success of our customers. Further, FedEx Dataworks will help to
enterprise to integrate the technology and services integral to the success of our customers. Further, FedEx Dataworks will help to
facilitate an open and collaborative e-commerce ecosystem that helps merchants provide seamless end-to-end experiences for their
facilitate an open and collaborative e-commerce ecosystem that helps merchants provide seamless end-to-end experiences for their
customers.
customers.

ShopRunner, which we acquired in December 2020, is an e-commerce platform that directly connects brands and merchants with

online shoppers. ShopRunner members enjoy benefits that include free two-day shipping, free returns, member-exclusive discounts

and seamless checkout. ShopRunner’s data-driven marketing and omnichannel enablement capabilities also help brands and

merchants acquire high-value customers and accelerate their digital innovation by using ShopRunner’s e-commerce platform. We

believe the complementary nature of ShopRunner’s pre-purchase offerings combined with FedEx’s post-purchase logistics

intelligence will enable brands and merchants to attract and engage consumers at scale by providing innovative online shopping

experiences.

In April 2021, we announced a new, multi-year collaboration with Adobe, starting with the integration of ShopRunner with Adobe

Commerce’s Magento platform, which we expect will be available to Adobe merchants in late calendar 2021. By integrating their

online storefronts with ShopRunner, Adobe merchants will be able to offer seamless checkout, two-day shipping, easy returns and

exclusive offers to shippers. The collaboration will also give merchants access to FedEx post-purchase logistics intelligence, allowing

for better management of supply chains.

Autonomous Delivery Technology

FedEx is exploring the use of autonomous delivery technologies within its operations. Roxo, the FedEx SameDay Bot, an autonomous

delivery device designed to help retailers make on-demand same-day and last-mile deliveries to their customers, continues

development and testing in select markets. In 2020, we announced our collaboration with two business partners to launch a pilot drone

delivery service to explore methods of enhancing last-mile residential delivery service and in June 2021 announced a multi-year,

multi-phase agreement to test Nuro’s next-generation autonomous delivery vehicle within FedEx operations. The collaboration with

Nuro will explore various use cases for on-road autonomous vehicle logistics such as multi-stop and appointment-based deliveries. We

are also working with major national retailers, fast food restaurants and drug stores to help assess different customers’ autonomous

delivery needs.

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:

• The UEFA Champions League, which is broadcast in over 200 countries and territories worldwide.

• The season-long FedExCup competition on the PGA TOUR.

• The World Golf Championships FedEx St. Jude Invitational, a PGA TOUR event that has raised millions of dollars for St.

Jude Children’s Research Hospital and is one of four annual World Golf Championships events.

• FedExField in the Washington, DC area.

• The #11 Joe Gibbs Racing Toyota Camry driven by Denny Hamlin in the NASCAR Cup Series.

• ATP Tour men’s professional tennis circuit.

• FedExForum in Memphis, TN.

• The NBA’s Memphis Grizzlies as the team’s official jersey sponsor.

Additionally, 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.

Information Security

FedEx Services 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 —

including, for example, the Payment Card Industry Data Security Standard, a set of comprehensive requirements for enhancing

payment account data security developed by the Payment Card Industry Security Standards Council, as well as compliance with the

Health Insurance Portability and Accountability Act of 1996, which enforces the security and confidentiality of employee health

information. For a description of risks related to information security, see “Item 1A. Risk Factors” of this Annual Report.

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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. 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. International Shipping Assist on

fedex.com uses artificial intelligence to continually improve the process of completing the complicated paperwork required for

international shipping.

FedEx Surround allows any business to enhance visibility into its supply chain by leveraging data to provide near-real-time analytics

into shipment tracking, which will drive more precise logistics and inventory management. SenseAware, a FedEx innovation currently

available in nearly 90 countries worldwide, allows customers to stay connected to their critical shipments by providing real-time

updates regarding current location, precise temperature, relative humidity, barometric pressure readings, light exposure and shock

events. Additionally, in 2021 we launched FedEx SenseAware ID, a lightweight sensor-based logistics device that delivers a new level

of precision tracking. The enhanced location visibility provided by FedEx SenseAware ID will create opportunities for FedEx

customers to reimagine their supply chains through real-time updates on a package’s location within the FedEx Express network. An

initial round of customers in the healthcare, aerospace and retail industries received access to FedEx SenseAware ID data in

November 2020, and FedEx is currently expanding access to additional customers. We plan to eventually make FedEx SenseAware ID

available for a broad range of premium FedEx Express services.

FedEx Mobile is a suite of solutions including the FedEx mobile application, FedEx mobile website and SMS text messaging. The

FedEx Mobile app provides convenience for recipients to track packages, get quick rates and estimated delivery times, quickly find

the nearest FedEx location and easily access FedEx Delivery Manager to customize home deliveries. It is available on Android™ and

Apple devices. The FedEx mobile website has expanded to more than 220 countries and territories and 40 languages. FedEx Mobile

allows customers to track packages, create shipping labels, view account-specific rate quotes and access drop-off location information.

SMS Notifications allows customers to track or follow a package via text messaging, and it is currently available in five countries.

Our FedEx Ship Manager suite of solutions offers a wide range of options to help our customers manage their parcel and LTL

shipping and associated processes. Additionally, our state-of-the-art Packaging Lab designs innovative custom packaging solutions to

keep shipments protected through transit.

E-Commerce 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.

FedEx OnSite, our retail convenience network, utilizes third-party retailers to receive and hold packages for FedEx customers. As of

July 15, 2021, the FedEx OnSite network has grown to include approximately 18,000 Walgreens, Dollar General and Albertsons

stores in addition to our more than 2,200 FedEx Office locations. In addition to allowing for an easy returns and drop-off experience

for shoppers, the FedEx OnSite 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 to the Walgreens retail network, 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 FedEx Express, 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.

FedEx Dataworks

The size and scale of our global network, and the more than 19 million packages that traverse it every day, gives us a bird’s-eye view

of global supply chains and trends. This foundation provides an immense amount of data we can use to build better insights, increase

visibility and improve the customer experience. To fully harness the power of this data, in 2021 we launched FedEx Dataworks, a new

organization focused on putting our data into context and using it to transform the digital and physical experiences of our customers

and team members. FedEx Dataworks will create solutions that build “the network for what’s next” by collaborating across the FedEx

enterprise to integrate the technology and services integral to the success of our customers. Further, FedEx Dataworks will help to

facilitate an open and collaborative e-commerce ecosystem that helps merchants provide seamless end-to-end experiences for their

customers.

ShopRunner, which we acquired in December 2020, is an e-commerce platform that directly connects brands and merchants with
ShopRunner, which we acquired in December 2020, is an e-commerce platform that directly connects brands and merchants with
online shoppers. ShopRunner members enjoy benefits that include free two-day shipping, free returns, member-exclusive discounts
online shoppers. ShopRunner members enjoy benefits that include free two-day shipping, free returns, member-exclusive discounts
and seamless checkout. ShopRunner’s data-driven marketing and omnichannel enablement capabilities also help brands and
and seamless checkout. ShopRunner’s data-driven marketing and omnichannel enablement capabilities also help brands and
merchants acquire high-value customers and accelerate their digital innovation by using ShopRunner’s e-commerce platform. We
merchants acquire high-value customers and accelerate their digital innovation by using ShopRunner’s e-commerce platform. We
believe the complementary nature of ShopRunner’s pre-purchase offerings combined with FedEx’s post-purchase logistics
believe the complementary nature of ShopRunner’s pre-purchase offerings combined with FedEx’s post-purchase logistics
intelligence will enable brands and merchants to attract and engage consumers at scale by providing innovative online shopping
intelligence will enable brands and merchants to attract and engage consumers at scale by providing innovative online shopping
experiences.
experiences.

In April 2021, we announced a new, multi-year collaboration with Adobe, starting with the integration of ShopRunner with Adobe
In April 2021, we announced a new, multi-year collaboration with Adobe, starting with the integration of ShopRunner with Adobe
Commerce’s Magento platform, which we expect will be available to Adobe merchants in late calendar 2021. By integrating their
Commerce’s Magento platform, which we expect will be available to Adobe merchants in late calendar 2021. By integrating their
online storefronts with ShopRunner, Adobe merchants will be able to offer seamless checkout, two-day shipping, easy returns and
online storefronts with ShopRunner, Adobe merchants will be able to offer seamless checkout, two-day shipping, easy returns and
exclusive offers to shippers. The collaboration will also give merchants access to FedEx post-purchase logistics intelligence, allowing
exclusive offers to shippers. The collaboration will also give merchants access to FedEx post-purchase logistics intelligence, allowing
for better management of supply chains.
for better management of supply chains.

Autonomous Delivery Technology
Autonomous Delivery Technology

FedEx is exploring the use of autonomous delivery technologies within its operations. Roxo, the FedEx SameDay Bot, an autonomous
FedEx is exploring the use of autonomous delivery technologies within its operations. Roxo, the FedEx SameDay Bot, an autonomous
delivery device designed to help retailers make on-demand same-day and last-mile deliveries to their customers, continues
delivery device designed to help retailers make on-demand same-day and last-mile deliveries to their customers, continues
development and testing in select markets. In 2020, we announced our collaboration with two business partners to launch a pilot drone
development and testing in select markets. In 2020, we announced our collaboration with two business partners to launch a pilot drone
delivery service to explore methods of enhancing last-mile residential delivery service and in June 2021 announced a multi-year,
delivery service to explore methods of enhancing last-mile residential delivery service and in June 2021 announced a multi-year,
multi-phase agreement to test Nuro’s next-generation autonomous delivery vehicle within FedEx operations. The collaboration with
multi-phase agreement to test Nuro’s next-generation autonomous delivery vehicle within FedEx operations. The collaboration with
Nuro will explore various use cases for on-road autonomous vehicle logistics such as multi-stop and appointment-based deliveries. We
Nuro will explore various use cases for on-road autonomous vehicle logistics such as multi-stop and appointment-based deliveries. We
are also working with major national retailers, fast food restaurants and drug stores to help assess different customers’ autonomous
are also working with major national retailers, fast food restaurants and drug stores to help assess different customers’ autonomous
delivery needs.
delivery needs.

Marketing
Marketing

The FedEx brand name symbolizes outstanding service, reliability and speed. Emphasis is continually placed on promoting and
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
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.
world. In addition to television, print and digital advertising, we promote the FedEx brand through sponsorships and special events.
For example, FedEx sponsors:
For example, FedEx sponsors:

• The UEFA Champions League, which is broadcast in over 200 countries and territories worldwide.
• The UEFA Champions League, which is broadcast in over 200 countries and territories worldwide.

• The season-long FedExCup competition on the PGA TOUR.
• The season-long FedExCup competition on the PGA TOUR.

• The World Golf Championships FedEx St. Jude Invitational, a PGA TOUR event that has raised millions of dollars for St.
• The World Golf Championships FedEx St. Jude Invitational, a PGA TOUR event that has raised millions of dollars for St.

Jude Children’s Research Hospital and is one of four annual World Golf Championships events.
Jude Children’s Research Hospital and is one of four annual World Golf Championships events.

• FedExField in the Washington, DC area.
• FedExField in the Washington, DC area.

• The #11 Joe Gibbs Racing Toyota Camry driven by Denny Hamlin in the NASCAR Cup Series.
• The #11 Joe Gibbs Racing Toyota Camry driven by Denny Hamlin in the NASCAR Cup Series.

• ATP Tour men’s professional tennis circuit.
• ATP Tour men’s professional tennis circuit.

• FedExForum in Memphis, TN.
• FedExForum in Memphis, TN.

• The NBA’s Memphis Grizzlies as the team’s official jersey sponsor.
• The NBA’s Memphis Grizzlies as the team’s official jersey sponsor.

Additionally, FedEx is the “Official Delivery Service Sponsor” and “Official Office Services Provider” of the NFL, through which we
Additionally, 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
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.
Players of the Year Awards.

Information Security
Information Security

FedEx Services has a team of highly qualified professionals dedicated to securing information about our customers’ shipments and
FedEx Services 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
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 —
customers. We are committed to compliance with applicable information security laws, regulations and industry standards —
including, for example, the Payment Card Industry Data Security Standard, a set of comprehensive requirements for enhancing
including, for example, the Payment Card Industry Data Security Standard, a set of comprehensive requirements for enhancing
payment account data security developed by the Payment Card Industry Security Standards Council, as well as compliance with the
payment account data security developed by the Payment Card Industry Security Standards Council, as well as compliance with the
Health Insurance Portability and Accountability Act of 1996, which enforces the security and confidentiality of employee health
Health Insurance Portability and Accountability Act of 1996, which enforces the security and confidentiality of employee health
information. For a description of risks related to information security, see “Item 1A. Risk Factors” of this Annual Report.
information. For a description of risks related to information security, see “Item 1A. Risk Factors” of this Annual Report.

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Global ISO 9001 Certification
Global ISO 9001 Certification

FedEx Services provides our customers with a high level of service quality, as evidenced by our ISO 9001 certifications for our global
FedEx Services provides our customers with a high level of service quality, as evidenced by our ISO 9001 certifications for our global
express, ground and freight operations. ISO 9001 registration is required by thousands of customers around the world. FedEx’s global
express, ground and freight operations. ISO 9001 registration is required by thousands of customers around the world. FedEx’s global
certifications, encompassing the processes of FedEx Express, FedEx Ground, FedEx Freight and FedEx Services, enhance our single-
certifications, encompassing the processes of FedEx Express, FedEx Ground, FedEx Freight and FedEx Services, enhance our single-
point-of-access strategy and solidify our reputation as the quality leader in the transportation industry. ISO 9001 is the international
point-of-access strategy and solidify our reputation as the quality leader in the transportation industry. ISO 9001 is the international
standard for Quality Management Systems. ISO standards were developed by the International Organization for Standardization in
standard for Quality Management Systems. ISO standards were developed by the International Organization for Standardization in
Geneva, Switzerland to promote and facilitate international trade. Approximately 170 countries, including European Union (“EU”)
Geneva, Switzerland to promote and facilitate international trade. Approximately 170 countries, including European Union (“EU”)
members, the U.S. and Japan, recognize ISO standards.
members, the U.S. and Japan, recognize ISO standards.

FedEx Office Operating Segment
FedEx Office Operating Segment

As of May 31, 2021, FedEx Office operated approximately 2,200 customer-facing stores, providing convenient access to printing and
As of May 31, 2021, FedEx Office operated approximately 2,200 customer-facing stores, providing convenient access to printing and
shipping expertise with reliable service. In response to the COVID-19 pandemic, beginning in the fourth quarter of 2020, we
shipping expertise with reliable service. In response to the COVID-19 pandemic, beginning in the fourth quarter of 2020, we
temporarily closed a small number of FedEx Office stores, and operated other FedEx Office stores at reduced hours. Normal
temporarily closed a small number of FedEx Office stores, and operated other FedEx Office stores at reduced hours. Normal
operations were substantially resumed throughout the course of 2021. As of July 15, 2021, the money-back guarantee for all FedEx
operations were substantially resumed throughout the course of 2021. As of July 15, 2021, the money-back guarantee for all FedEx
Office services remains temporarily suspended.
Office services remains temporarily suspended.

The FedEx Office brick-and-mortar network features retail stores, centralized production centers, corporate on-site print centers, and
The FedEx Office brick-and-mortar network features retail stores, centralized production centers, corporate on-site print centers, and
on-site business centers at colleges and universities, hotels, convention centers, corporate campuses and healthcare campuses. Many of
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 has
these locations are open later in the evenings to accommodate urgent printing projects and delivery drop-offs. FedEx Office has
designed a suite of printing and shipping management solutions that are flexible and scalable, allowing customers to meet their unique
designed 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
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
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,
our enterprise customers looking to outsource their print supply chain. Services include digital printing, professional finishing,
document creation, design services, direct mail, signs and graphics, custom-printed boxes, copying, computer rental, free Wi-Fi,
document creation, design services, direct mail, signs and graphics, custom-printed boxes, copying, computer rental, free Wi-Fi,
corporate print solutions and expedited U.S. passport processing and renewal through a collaboration with a registered U.S. passport
corporate print solutions and expedited U.S. passport processing and renewal through a collaboration with a registered U.S. passport
agency.
agency.

With the FedEx Office Print Online solution, customers can use their laptops or mobile devices to design their print needs or access
With the FedEx Office Print Online 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
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
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,
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.
Microsoft OneDrive® and from FedEx Office’s own My Online Documents, making printing easy.

FedEx Office has prioritized our e-commerce offerings as a growth opportunity for the enterprise/large, medium and small business
FedEx Office has prioritized our e-commerce offerings as a growth opportunity for the enterprise/large, medium and small business
and individual customers we serve. FedEx Office has also made significant investments in new machines and technology, enhancing
and individual customers we serve. FedEx Office has also made significant investments in new machines and technology, enhancing
capabilities in narrow format color, grand format, large format, color management, enhanced finishing and other technologies. FedEx
capabilities in narrow format color, grand format, large format, color management, enhanced finishing and other technologies. FedEx
Office has partnered with a content and creative design platform to form a digital design-to-print marketplace offering millions of
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
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, in 2021 FedEx
from fedex.com on any device, with next-day printing on many requests available at FedEx Office stores. Additionally, in 2021 FedEx
Office partnered with a leading marketing solutions company to introduce an online branded promotional products marketplace that
Office 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.
allows businesses to customize and purchase high-quality promotional products.

FedEx Office provides customers convenient access to the full range of FedEx Express and FedEx Ground shipping services.
FedEx Office provides customers convenient access to the full range of FedEx Express and FedEx Ground shipping services.
Customers may have their FedEx Express and FedEx Ground packages delivered to any FedEx Office customer-facing location
Customers may have their FedEx Express and FedEx Ground 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
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 facilitates e-commerce and returns through FedEx Returns Technology,
to Hold or AutoRedirect to Hold services. FedEx Office facilitates e-commerce and returns through FedEx Returns Technology,
which allows for in-store printing of return shipping labels. Additionally, FedEx SameDay City is available in over 1,800 cities in 34
which allows for in-store printing of return shipping labels. Additionally, FedEx SameDay City is available in over 1,800 cities in 34
markets across the U.S., offering door-to-door residential and business delivery of time-sensitive parcels within hours by FedEx Office
markets across the U.S., offering door-to-door residential and business delivery of time-sensitive parcels within hours by FedEx Office
uniformed team members in branded FedEx Office delivery vehicles. Increasingly, industries such as healthcare, life sciences,
uniformed team members in branded FedEx Office delivery vehicles. Increasingly, industries such as healthcare, life sciences,
manufacturing, finance, perishables, travel and automotive are relying on same-day services for critical delivery needs.
manufacturing, finance, perishables, travel and automotive are relying on same-day services for critical delivery needs.

FedEx Office also offers packing services, and packing supplies and boxes are included in its retail offerings. By allowing customers
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 using FedEx Ground day-
to have items professionally packed by specially trained FedEx Office team members and then shipped using FedEx Ground day-
definite shipping or time-definite global FedEx Express shipping services, FedEx Office offers a complete “pack-and-ship” solution.
definite shipping or time-definite global FedEx Express shipping services, 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
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.
specialty boxes and additional packing supplies, equipment and tools to serve our customers’ needs.

Almost all FedEx Office locations provide local pickup-and-delivery service for print jobs completed by FedEx Office. A FedEx

courier picks up a customer’s print job at the customer’s location and then returns the finished product to the customer. Options and

services vary by location.

As of May 31, 2021, we operate over 340 FedEx Office locations inside Walmart stores.

Brian D. Philips is the President and Chief Executive Officer of FedEx Office, which is based in Plano, Texas. As of May 31, 2021,

FedEx Office had approximately 13,000 employees.

FedEx Office is an operating segment that is included in “Corporate, other and eliminations” in our segment reporting.

FedEx Logistics Operating Segment

The FedEx Logistics operating segment leverages the power of the extensive international FedEx transportation network to provide

specialty solutions that complete a simple, seamless and powerful global trade experience for FedEx customers around the world,

including customs brokerage and global ocean and air freight forwarding through FedEx Trade Networks Transport & Brokerage and

integrated supply chain management solutions through FedEx Supply Chain. Additionally, FedEx Logistics provides international

trade advisory services, including assistance with the Customs-Trade Partnership Against Terrorism program.

Dr. Udo Lange is the President and Chief Executive Officer of FedEx Logistics, which is based in Memphis, Tennessee. As of

May 31, 2021, the FedEx Logistics organization had approximately 21,000 employees. FedEx Supply Chain has a small number of

employees who are members of unions.

FedEx Logistics is an operating segment that is included in “Corporate, other and eliminations” in our segment reporting.

FedEx Trade Networks Transport & Brokerage

FedEx Trade Networks Transport & Brokerage provides international trade services, specializing in customs brokerage, global ocean

and air freight forwarding and managed transportation. Additionally, FedEx Trade Networks Transport & Brokerage provides customs

clearance services for FedEx Express at its major U.S. hub facilities and border customs clearance for FedEx Ground and FedEx

Freight. FedEx Trade Networks Transport & Brokerage also offers global door-to-door air charter solutions collaborating with FedEx

Express and U.S. import door-to-door less-than-container load ocean solutions collaborating with FedEx Freight.

As trade throughout the world grows, so does the FedEx Trade Networks Transport & Brokerage solutions portfolio. As of May 31,

2021, value-added services of FedEx Trade Networks Transport & Brokerage included approximately 110 freight forwarding offices

in 30 countries and Global Trade Data, an information tool that allows customers to track and manage imports. In total, as of May 31,

2021, FedEx Trade Networks Transport & Brokerage had approximately 130 offices in 110 service locations throughout North

America and in Africa, Asia-Pacific, Europe, India, Latin America, the Middle East and Australia/New Zealand. FedEx Trade

Networks Transport & Brokerage maintains a network of air and ocean freight-forwarding service providers and has entered into

strategic alliances to provide services in certain countries in which it does not have owned offices.

In July 2021, FedEx Trade Networks Transport & Brokerage launched FedEx Trade Solutions, which offers customized trade

solutions that enable improved compliance practices.

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 more than 14,000 employees at approximately 110 facilities as of May 31, 2021,

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.

spending behaviors.

FedEx Fulfillment is an e-commerce solution that 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’

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Global ISO 9001 Certification

FedEx Services provides our customers with a high level of service quality, as evidenced by our ISO 9001 certifications for our global

express, ground and freight operations. ISO 9001 registration is required by thousands of customers around the world. FedEx’s global

point-of-access strategy and solidify our reputation as the quality leader in the transportation industry. ISO 9001 is the international

standard for Quality Management Systems. ISO standards were developed by the International Organization for Standardization in

Geneva, Switzerland to promote and facilitate international trade. Approximately 170 countries, including European Union (“EU”)

members, the U.S. and Japan, recognize ISO standards.

FedEx Office Operating Segment

As of May 31, 2021, FedEx Office operated approximately 2,200 customer-facing stores, providing convenient access to printing and

shipping expertise with reliable service. In response to the COVID-19 pandemic, beginning in the fourth quarter of 2020, we

temporarily closed a small number of FedEx Office stores, and operated other FedEx Office stores at reduced hours. Normal

operations were substantially resumed throughout the course of 2021. As of July 15, 2021, the money-back guarantee for all FedEx

Office services remains temporarily suspended.

The FedEx Office brick-and-mortar network features retail stores, centralized production centers, corporate on-site print centers, 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 has

designed 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 services, direct mail, signs and graphics, custom-printed boxes, copying, computer rental, free Wi-Fi,

corporate print solutions and expedited U.S. passport processing and renewal through a collaboration with a registered U.S. passport

agency.

With the FedEx Office Print Online 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.

FedEx Office has prioritized our e-commerce offerings as a growth opportunity for the enterprise/large, medium and small business

and individual customers we serve. FedEx Office has also made significant 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 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, in 2021 FedEx

Office 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 provides customers convenient access to the full range of FedEx Express and FedEx Ground shipping services.

Customers may have their FedEx Express and FedEx Ground 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 facilitates e-commerce and returns through FedEx Returns Technology,

which allows for in-store printing of return shipping labels. Additionally, FedEx SameDay City is available in over 1,800 cities in 34

markets across the U.S., offering door-to-door residential and business delivery of time-sensitive parcels within hours by FedEx Office

uniformed team members in branded FedEx Office delivery vehicles. Increasingly, industries such as healthcare, life sciences,

manufacturing, finance, perishables, travel and automotive are relying on same-day services for critical delivery needs.

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 using FedEx Ground day-

definite shipping or time-definite global FedEx Express shipping services, 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.

certifications, encompassing the processes of FedEx Express, FedEx Ground, FedEx Freight and FedEx Services, enhance our single-

As of May 31, 2021, we operate over 340 FedEx Office locations inside Walmart stores.
As of May 31, 2021, we operate over 340 FedEx Office locations inside Walmart stores.

Almost all FedEx Office locations provide local pickup-and-delivery service for print jobs completed by FedEx Office. A FedEx
Almost all FedEx Office locations provide local pickup-and-delivery service for print jobs completed by FedEx Office. A FedEx
courier picks up a customer’s print job at the customer’s location and then returns the finished product to the customer. Options and
courier picks up a customer’s print job at the customer’s location and then returns the finished product to the customer. Options and
services vary by location.
services vary by location.

Brian D. Philips is the President and Chief Executive Officer of FedEx Office, which is based in Plano, Texas. As of May 31, 2021,
Brian D. Philips is the President and Chief Executive Officer of FedEx Office, which is based in Plano, Texas. As of May 31, 2021,
FedEx Office had approximately 13,000 employees.
FedEx Office had approximately 13,000 employees.

FedEx Office is an operating segment that is included in “Corporate, other and eliminations” in our segment reporting.
FedEx Office is an operating segment that is included in “Corporate, other and eliminations” in our segment reporting.

FedEx Logistics Operating Segment
FedEx Logistics Operating Segment

The FedEx Logistics operating segment leverages the power of the extensive international FedEx transportation network to provide
The FedEx Logistics operating segment leverages the power of the extensive international FedEx transportation network to provide
specialty solutions that complete a simple, seamless and powerful global trade experience for FedEx customers around the world,
specialty solutions that complete a simple, seamless and powerful global trade experience for FedEx customers around the world,
including customs brokerage and global ocean and air freight forwarding through FedEx Trade Networks Transport & Brokerage and
including customs brokerage and global ocean and air freight forwarding through FedEx Trade Networks Transport & Brokerage and
integrated supply chain management solutions through FedEx Supply Chain. Additionally, FedEx Logistics provides international
integrated supply chain management solutions through FedEx Supply Chain. Additionally, FedEx Logistics provides international
trade advisory services, including assistance with the Customs-Trade Partnership Against Terrorism program.
trade advisory services, including assistance with the Customs-Trade Partnership Against Terrorism program.

Dr. Udo Lange is the President and Chief Executive Officer of FedEx Logistics, which is based in Memphis, Tennessee. As of
Dr. Udo Lange is the President and Chief Executive Officer of FedEx Logistics, which is based in Memphis, Tennessee. As of
May 31, 2021, the FedEx Logistics organization had approximately 21,000 employees. FedEx Supply Chain has a small number of
May 31, 2021, the FedEx Logistics organization had approximately 21,000 employees. FedEx Supply Chain has a small number of
employees who are members of unions.
employees who are members of unions.

FedEx Logistics is an operating segment that is included in “Corporate, other and eliminations” in our segment reporting.
FedEx Logistics is an operating segment that is included in “Corporate, other and eliminations” in our segment reporting.

FedEx Trade Networks Transport & Brokerage
FedEx Trade Networks Transport & Brokerage

FedEx Trade Networks Transport & Brokerage provides international trade services, specializing in customs brokerage, global ocean
FedEx Trade Networks Transport & Brokerage provides international trade services, specializing in customs brokerage, global ocean
and air freight forwarding and managed transportation. Additionally, FedEx Trade Networks Transport & Brokerage provides customs
and air freight forwarding and managed transportation. Additionally, FedEx Trade Networks Transport & Brokerage provides customs
clearance services for FedEx Express at its major U.S. hub facilities and border customs clearance for FedEx Ground and FedEx
clearance services for FedEx Express at its major U.S. hub facilities and border customs clearance for FedEx Ground and FedEx
Freight. FedEx Trade Networks Transport & Brokerage also offers global door-to-door air charter solutions collaborating with FedEx
Freight. FedEx Trade Networks Transport & Brokerage also offers global door-to-door air charter solutions collaborating with FedEx
Express and U.S. import door-to-door less-than-container load ocean solutions collaborating with FedEx Freight.
Express and U.S. import door-to-door less-than-container load ocean solutions collaborating with FedEx Freight.

As trade throughout the world grows, so does the FedEx Trade Networks Transport & Brokerage solutions portfolio. As of May 31,
As trade throughout the world grows, so does the FedEx Trade Networks Transport & Brokerage solutions portfolio. As of May 31,
2021, value-added services of FedEx Trade Networks Transport & Brokerage included approximately 110 freight forwarding offices
2021, value-added services of FedEx Trade Networks Transport & Brokerage included approximately 110 freight forwarding offices
in 30 countries and Global Trade Data, an information tool that allows customers to track and manage imports. In total, as of May 31,
in 30 countries and Global Trade Data, an information tool that allows customers to track and manage imports. In total, as of May 31,
2021, FedEx Trade Networks Transport & Brokerage had approximately 130 offices in 110 service locations throughout North
2021, FedEx Trade Networks Transport & Brokerage had approximately 130 offices in 110 service locations throughout North
America and in Africa, Asia-Pacific, Europe, India, Latin America, the Middle East and Australia/New Zealand. FedEx Trade
America and in Africa, Asia-Pacific, Europe, India, Latin America, the Middle East and Australia/New Zealand. FedEx Trade
Networks Transport & Brokerage maintains a network of air and ocean freight-forwarding service providers and has entered into
Networks Transport & Brokerage maintains a network of air and ocean freight-forwarding service providers and has entered into
strategic alliances to provide services in certain countries in which it does not have owned offices.
strategic alliances to provide services in certain countries in which it does not have owned offices.

In July 2021, FedEx Trade Networks Transport & Brokerage launched FedEx Trade Solutions, which offers customized trade
In July 2021, FedEx Trade Networks Transport & Brokerage launched FedEx Trade Solutions, which offers customized trade
solutions that enable improved compliance practices.
solutions that enable improved compliance practices.

FedEx Supply Chain
FedEx Supply Chain

FedEx Supply Chain is a supply chain solutions provider specializing in Product Lifecycle Logistics® for technology, retail, consumer
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 more than 14,000 employees at approximately 110 facilities as of May 31, 2021,
and industrial goods and healthcare industries. With more than 14,000 employees at approximately 110 facilities as of May 31, 2021,
FedEx Supply Chain provides a comprehensive range of integrated logistics services to enable growth, minimize cost, mitigate supply
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,
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
contract packaging and product configuration, systems integration, returns process and disposition, test, repair, refurbishment and
product liquidation.
product liquidation.

FedEx Fulfillment is an e-commerce solution that helps small and medium-sized businesses fulfill orders from multiple channels,
FedEx Fulfillment is an e-commerce solution that 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
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
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’
an easy way to track items, manage inventory, analyze trends and make more informed decisions by better understanding shoppers’
spending behaviors.
spending behaviors.

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Seasonality
Seasonality

For information on the seasonality of our business, see the “Results of Operations and Outlook — Consolidated Results — 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
of Business” section of “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this
Annual Report.
Annual Report.

Trademarks
Trademarks

The “FedEx” trademark, service mark and trade name are essential to our worldwide business. FedEx, FedEx Express, FedEx Ground,
The “FedEx” trademark, service mark and trade name are essential to our worldwide business. FedEx, FedEx Express, FedEx Ground,
FedEx Freight, FedEx Office, FedEx Services, FedEx Logistics, FedEx Trade Networks Transport & Brokerage, FedEx Cross Border,
FedEx Freight, FedEx Office, FedEx Services, FedEx Logistics, FedEx Trade Networks Transport & Brokerage, FedEx Cross Border,
FedEx Supply Chain, FedEx Custom Critical, FedEx Dataworks, ShopRunner and TNT Express, among others, are trademarks,
FedEx Supply Chain, FedEx Custom Critical, FedEx Dataworks, ShopRunner and TNT Express, among others, are trademarks,
service marks and trade names of Federal Express Corporation or the respective companies for which registrations, or applications for
service marks and trade names of Federal Express Corporation or the respective companies for which registrations, or applications for
registration, are on file, as applicable. We have authorized, through licensing arrangements, the use of certain of our trademarks,
registration, are on file, as applicable. We have authorized, through licensing arrangements, the use of certain of our trademarks,
service marks and trade names by our contractors and Global Service Participants to support our business. In addition, we license the
service marks and trade names by our contractors and Global Service Participants to support our business. In addition, we license the
use of certain of our trademarks, service marks and trade names on promotional items for the primary purpose of enhancing brand
use of certain of our trademarks, service marks and trade names on promotional items for the primary purpose of enhancing brand
awareness.
awareness.

Regulation
Regulation

Air. Under the Federal Aviation Act of 1958, as amended (the “Federal Aviation Act”), both the U.S. Department of Transportation
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 Express.
(“DOT”) and the Federal Aviation Administration (“FAA”) exercise regulatory authority over FedEx Express.

The FAA’s regulatory authority relates primarily to operational aspects of air transportation, including aircraft standards and
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 Express to operate its
maintenance, as well as personnel and ground facilities, which may from time to time affect the ability of FedEx Express to operate its
aircraft in the most efficient manner. FedEx Express holds an air carrier certificate granted by the FAA pursuant to Part 119 of the
aircraft in the most efficient manner. FedEx Express 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 Express maintains its
federal aviation regulations. This certificate is of unlimited duration and remains in effect so long as FedEx Express maintains its
standards of safety and meets the operational requirements of the regulations.
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
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 Express holds various
authority and to other regulatory matters, including the transfer of route authority between carriers. FedEx Express holds various
certificates issued by the DOT, authorizing FedEx Express to engage in U.S. and international air transportation of property and mail
certificates issued by the DOT, authorizing FedEx Express to engage in U.S. and international air transportation of property and mail
on a worldwide basis.
on a worldwide basis.

Under the Aviation and Transportation Security Act of 2001, as amended, the Transportation Security Administration (“TSA”), an
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 Express to
agency within the Department of Homeland Security, has responsibility for aviation security. The TSA requires FedEx Express to
comply with a Full All-Cargo Aircraft Operator Standard Security Plan, which contains evolving and strict security requirements.
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
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
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.
requirements could impose material costs on us.

FedEx Express participates in the Civil Reserve Air Fleet (“CRAF”) program. Under this program, the U.S. Department of Defense
FedEx Express 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 Express’s wide-bodied aircraft in the event of a declared need, including a national
may requisition for military use certain of FedEx Express’s wide-bodied aircraft in the event of a declared need, including a national
emergency. FedEx Express is compensated for the operation of any aircraft requisitioned under the CRAF program at standard
emergency. FedEx Express is 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,
contract rates established each year in the normal course of awarding contracts. Through its participation in the CRAF program,
FedEx Express is entitled to bid on peacetime military cargo charter business. FedEx Express, together with a consortium of other
FedEx Express is entitled to bid on peacetime military cargo charter business. FedEx Express, together with a consortium of other
carriers, currently contracts with the U.S. government for such charter flights.
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
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.
and duty time regulations, that could affect our business.

Ground. The ground transportation performed by FedEx Express is integral to its air transportation services. The enactment of the
Ground. The ground transportation performed by FedEx Express 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
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
intermodal all-cargo air carriers and most motor carriers. States may now only exercise jurisdiction over safety and insurance. FedEx
Express is registered in those states that require registration.
Express is registered in those states that require registration.

The operations of FedEx Ground, FedEx Freight and FedEx Custom Critical in interstate commerce are currently regulated by the
The operations of FedEx Ground, FedEx Freight and FedEx Custom Critical in interstate commerce are currently regulated by the
DOT and the Federal Motor Carrier Safety Administration, which retain limited oversight authority over motor carriers. Federal
DOT and the Federal Motor Carrier Safety Administration, which retain limited oversight authority over motor carriers. Federal
legislation preempts regulation by the states of rates, routes and services in intrastate freight transportation.
legislation preempts regulation by the states of rates, routes and services in intrastate freight transportation.

Like other interstate motor carriers, our operations, including those at FedEx Express, are subject to certain DOT safety requirements
Like other interstate motor carriers, our operations, including those at FedEx Express, are subject to certain DOT safety requirements
governing interstate operations. In addition, vehicle weight and dimensions remain subject to both federal and state regulations.
governing interstate operations. In addition, vehicle weight and dimensions remain subject to both federal and state regulations.

International. FedEx Express’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 Express 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 Express, 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 Express’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 Express to compete effectively in parts of the international domestic transportation

and logistics market.

Communication. Because of the extensive use of radio and other communication facilities in its aircraft and ground transportation

operations, FedEx Express is subject to the Federal Communications Commission Act of 1934, as amended. Additionally, the Federal

Communications Commission regulates and licenses FedEx Express’s activities pertaining to satellite communications.

Environmental. Pursuant to the Federal Aviation Act, the FAA, with the assistance of the U.S. Environmental Protection Agency

(“EPA”), is authorized to establish standards governing aircraft noise. FedEx Express’s aircraft fleet is in compliance with current

noise standards of the federal aviation regulations. In addition to federal regulation of aircraft noise, certain airport operators have

local noise regulations, which limit aircraft operations by type of aircraft and time of day. These regulations have had a restrictive

effect on FedEx Express’s aircraft operations in some of the localities where they apply but do not have a material effect in any of

FedEx Express’s significant markets. Congress’s passage of the Airport Noise and Capacity Act of 1990 established a National Noise

Policy, which enabled FedEx Express to plan for noise reduction and better respond to local noise constraints. FedEx Express’s

international operations are also subject to noise regulations in certain of the countries in which it operates.

Concern over climate change, including the impact of global warming, has led to significant U.S. and international legislative and

regulatory efforts to limit 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. For example, the EU has established the Emissions Trading

System (“ETS”) to regulate GHG emissions in the EU and adopted a directive in 2008 requiring each EU member state to extend the

ETS to aviation operations. Efforts by the EU in 2009 to regulate flights arriving from or departing for airports outside of the EU were

postponed. The EU extended its stay on the extra-territorial application of the EU ETS as applied to international flights to and from

the European Economic Area (“EEA”) through the end of calendar 2023, contingent on successful implementation of the Carbon

Offsetting and Reduction Scheme for International Aviation (“CORSIA”).

In 2016, the International Civil Aviation Organization (“ICAO”) passed a resolution adopting CORSIA, which is a global, market-

based measure for purchasing credits to offset carbon dioxide emissions and intended to aid in meeting the ICAO’s goal of carbon

neutral growth starting in calendar 2020 by complementing industry efforts in infrastructure upgrades, technology, operations and

sustainable aviation fuel. In June 2018, the ICAO adopted standards pertaining to country-by-country implementation including the

collection and reporting of information on international aviation emissions beginning in calendar 2019. In furtherance of these efforts,

in March 2019 the FAA issued notice of a CORSIA program permitting U.S. carriers to submit emissions data on a voluntary basis.

Data reported will be used to set the initial emissions baseline, and beginning in calendar 2021 carriers subject to the requirements of

CORSIA will be responsible for purchasing and retiring carbon credits to offset emissions in excess of the initial baseline. In response

to the creation of the CORSIA program, in December 2017, the EU adopted a proposal that indefinitely excludes from the ETS flights

operating fully or partly outside the EU and gradually reduces the number of aviation allowances from calendar 2021. The EU has

indicated that it will assess CORSIA implementation and determine the future status of the ETS as applied to international aviation to

and from the EEA. We expect compliance with CORSIA to increase FedEx operating expenses beginning in calendar 2021. The

amount of such increase will ultimately depend on a number of factors, including the number of our flights subject to CORSIA, the

fuel efficiency of our fleet, the average growth of the aviation sector, our ability to utilize sustainable aviation fuels in the future and

the price of ICAO-eligible emission units or offsets required to be purchased by FedEx.

- 20 -
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- 21 -

Seasonality

Annual Report.

Trademarks

awareness.

Regulation

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

The “FedEx” trademark, service mark and trade name are essential to our worldwide business. FedEx, FedEx Express, FedEx Ground,

FedEx Freight, FedEx Office, FedEx Services, FedEx Logistics, FedEx Trade Networks Transport & Brokerage, FedEx Cross Border,

FedEx Supply Chain, FedEx Custom Critical, FedEx Dataworks, ShopRunner and TNT Express, among others, are trademarks,

service marks and trade names of Federal Express Corporation or the respective companies for which registrations, or applications for

registration, are on file, as applicable. We have authorized, through licensing arrangements, the use of certain of our trademarks,

service marks and trade names by our contractors and Global Service Participants to support our business. In addition, we license the

use of certain of our trademarks, service marks and trade names on promotional items for the primary purpose of enhancing brand

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 Express.

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 Express to operate its

aircraft in the most efficient manner. FedEx Express 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 Express 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 Express holds various

certificates issued by the DOT, authorizing FedEx Express to engage in U.S. and international air transportation of property and mail

on a worldwide basis.

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 Express 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 Express 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 Express’s wide-bodied aircraft in the event of a declared need, including a national

emergency. FedEx Express is 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 Express is entitled to bid on peacetime military cargo charter business. FedEx Express, 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 FedEx Express 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

Express is registered in those states that require registration.

The operations of FedEx Ground, FedEx Freight and FedEx Custom Critical in interstate commerce are currently regulated by the

DOT and the Federal Motor Carrier Safety Administration, which retain limited oversight authority over motor carriers. Federal

legislation preempts regulation by the states of rates, routes and services in intrastate freight transportation.

Like other interstate motor carriers, our operations, including those at FedEx Express, 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 Express’s international authority permits it to carry cargo and mail from points in its U.S. route system to
International. FedEx Express’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
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
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
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
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 Express to operate its air network in the most efficient
for global aviation rights may from time to time impair the ability of FedEx Express 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,
manner, and efficient operations often utilize open skies provisions of aviation agreements. Additionally, global air cargo carriers,
such as FedEx Express, are subject to current and potential additional aviation security regulation by U.S. and foreign governments.
such as FedEx Express, 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 Express’s international domestic operations, are also subject to current and potential
Our operations outside of the U.S., such as FedEx Express’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
regulations, including certain postal regulations and licensing requirements, that restrict, make difficult and sometimes prohibit, the
ability of foreign-owned companies such as FedEx Express to compete effectively in parts of the international domestic transportation
ability of foreign-owned companies such as FedEx Express to compete effectively in parts of the international domestic transportation
and logistics market.
and logistics market.

Communication. Because of the extensive use of radio and other communication facilities in its aircraft and ground transportation
Communication. Because of the extensive use of radio and other communication facilities in its aircraft and ground transportation
operations, FedEx Express is subject to the Federal Communications Commission Act of 1934, as amended. Additionally, the Federal
operations, FedEx Express is subject to the Federal Communications Commission Act of 1934, as amended. Additionally, the Federal
Communications Commission regulates and licenses FedEx Express’s activities pertaining to satellite communications.
Communications Commission regulates and licenses FedEx Express’s activities pertaining to satellite communications.

Environmental. Pursuant to the Federal Aviation Act, the FAA, with the assistance of the U.S. Environmental Protection Agency
Environmental. Pursuant to the Federal Aviation Act, the FAA, with the assistance of the U.S. Environmental Protection Agency
(“EPA”), is authorized to establish standards governing aircraft noise. FedEx Express’s aircraft fleet is in compliance with current
(“EPA”), is authorized to establish standards governing aircraft noise. FedEx Express’s aircraft fleet is in compliance with current
noise standards of the federal aviation regulations. In addition to federal regulation of aircraft noise, certain airport operators have
noise standards of the federal aviation regulations. In addition to federal regulation of aircraft noise, certain airport operators have
local noise regulations, which limit aircraft operations by type of aircraft and time of day. These regulations have had a restrictive
local noise regulations, which limit aircraft operations by type of aircraft and time of day. These regulations have had a restrictive
effect on FedEx Express’s aircraft operations in some of the localities where they apply but do not have a material effect in any of
effect on FedEx Express’s aircraft operations in some of the localities where they apply but do not have a material effect in any of
FedEx Express’s significant markets. Congress’s passage of the Airport Noise and Capacity Act of 1990 established a National Noise
FedEx Express’s significant markets. Congress’s passage of the Airport Noise and Capacity Act of 1990 established a National Noise
Policy, which enabled FedEx Express to plan for noise reduction and better respond to local noise constraints. FedEx Express’s
Policy, which enabled FedEx Express to plan for noise reduction and better respond to local noise constraints. FedEx Express’s
international operations are also subject to noise regulations in certain of the countries in which it operates.
international operations are also subject to noise regulations in certain of the countries in which it operates.

Concern over climate change, including the impact of global warming, has led to significant U.S. and international legislative and
Concern over climate change, including the impact of global warming, has led to significant U.S. and international legislative and
regulatory efforts to limit GHG emissions, including our aircraft and vehicle engine emissions. Increasingly, state and local
regulatory efforts to limit GHG emissions, including our aircraft and vehicle engine emissions. Increasingly, state and local
governments are also considering GHG regulatory requirements.
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
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. For example, the EU has established the Emissions Trading
following different approaches to the regulation of climate change. For example, the EU has established the Emissions Trading
System (“ETS”) to regulate GHG emissions in the EU and adopted a directive in 2008 requiring each EU member state to extend the
System (“ETS”) to regulate GHG emissions in the EU and adopted a directive in 2008 requiring each EU member state to extend the
ETS to aviation operations. Efforts by the EU in 2009 to regulate flights arriving from or departing for airports outside of the EU were
ETS to aviation operations. Efforts by the EU in 2009 to regulate flights arriving from or departing for airports outside of the EU were
postponed. The EU extended its stay on the extra-territorial application of the EU ETS as applied to international flights to and from
postponed. The EU extended its stay on the extra-territorial application of the EU ETS as applied to international flights to and from
the European Economic Area (“EEA”) through the end of calendar 2023, contingent on successful implementation of the Carbon
the European Economic Area (“EEA”) through the end of calendar 2023, contingent on successful implementation of the Carbon
Offsetting and Reduction Scheme for International Aviation (“CORSIA”).
Offsetting and Reduction Scheme for International Aviation (“CORSIA”).

In 2016, the International Civil Aviation Organization (“ICAO”) passed a resolution adopting CORSIA, which is a global, market-
In 2016, the International Civil Aviation Organization (“ICAO”) passed a resolution adopting CORSIA, which is a global, market-
based measure for purchasing credits to offset carbon dioxide emissions and intended to aid in meeting the ICAO’s goal of carbon
based measure for purchasing credits to offset carbon dioxide emissions and intended to aid in meeting the ICAO’s goal of carbon
neutral growth starting in calendar 2020 by complementing industry efforts in infrastructure upgrades, technology, operations and
neutral growth starting in calendar 2020 by complementing industry efforts in infrastructure upgrades, technology, operations and
sustainable aviation fuel. In June 2018, the ICAO adopted standards pertaining to country-by-country implementation including the
sustainable aviation fuel. In June 2018, the ICAO adopted standards pertaining to country-by-country implementation including the
collection and reporting of information on international aviation emissions beginning in calendar 2019. In furtherance of these efforts,
collection and reporting of information on international aviation emissions beginning in calendar 2019. In furtherance of these efforts,
in March 2019 the FAA issued notice of a CORSIA program permitting U.S. carriers to submit emissions data on a voluntary basis.
in March 2019 the FAA issued notice of a CORSIA program permitting U.S. carriers to submit emissions data on a voluntary basis.
Data reported will be used to set the initial emissions baseline, and beginning in calendar 2021 carriers subject to the requirements of
Data reported will be used to set the initial emissions baseline, and beginning in calendar 2021 carriers subject to the requirements of
CORSIA will be responsible for purchasing and retiring carbon credits to offset emissions in excess of the initial baseline. In response
CORSIA will be responsible for purchasing and retiring carbon credits to offset emissions in excess of the initial baseline. In response
to the creation of the CORSIA program, in December 2017, the EU adopted a proposal that indefinitely excludes from the ETS flights
to the creation of the CORSIA program, in December 2017, the EU adopted a proposal that indefinitely excludes from the ETS flights
operating fully or partly outside the EU and gradually reduces the number of aviation allowances from calendar 2021. The EU has
operating fully or partly outside the EU and gradually reduces the number of aviation allowances from calendar 2021. The EU has
indicated that it will assess CORSIA implementation and determine the future status of the ETS as applied to international aviation to
indicated that it will assess CORSIA implementation and determine the future status of the ETS as applied to international aviation to
and from the EEA. We expect compliance with CORSIA to increase FedEx operating expenses beginning in calendar 2021. The
and from the EEA. We expect compliance with CORSIA to increase FedEx operating expenses beginning in calendar 2021. The
amount of such increase will ultimately depend on a number of factors, including the number of our flights subject to CORSIA, the
amount of such increase will ultimately depend on a number of factors, including the number of our flights subject to CORSIA, the
fuel efficiency of our fleet, the average growth of the aviation sector, our ability to utilize sustainable aviation fuels in the future and
fuel efficiency of our fleet, the average growth of the aviation sector, our ability to utilize sustainable aviation fuels in the future and
the price of ICAO-eligible emission units or offsets required to be purchased by FedEx.
the price of ICAO-eligible emission units or offsets required to be purchased by FedEx.

- 20 -

- 21 -
- 21 -

Additionally, in calendar 2016, the EPA issued a finding that aircraft engine GHG emissions cause or contribute to air pollution that
Additionally, in calendar 2016, the EPA issued a finding that aircraft engine GHG emissions cause or contribute to air pollution that
may reasonably be anticipated to endanger public health or welfare. In March 2017, ICAO adopted new carbon dioxide emissions
may reasonably be anticipated to endanger public health or welfare. In March 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 current in-production
standards that would apply not only to new aircraft types as of calendar 2020, but also to new deliveries of current in-production
aircraft types from calendar 2023. Additionally, a cutoff date of calendar 2028 for production of aircraft that do not comply with
aircraft types from calendar 2023. Additionally, a cutoff date of calendar 2028 for production of aircraft that do not comply with
proposed standards was adopted. These standards are considered to be especially stringent for larger aircraft weighing over 60 tons. In
proposed standards was adopted. These standards are considered to be especially stringent for larger aircraft weighing over 60 tons. In
December 2020, the EPA adopted its own aircraft and aircraft engine GHG emissions standards, which are aligned with the 2017
December 2020, the EPA adopted its own aircraft and aircraft engine GHG emissions standards, which are aligned with the 2017
ICAO emissions standards. In the past, the U.S. Congress has also considered bills that would regulate GHG emissions, and some
ICAO emissions standards. 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 2021 the U.S. reentered the Paris climate accord, an agreement
form of federal climate change legislation is possible in the future. In 2021 the U.S. reentered the Paris climate accord, an agreement
among 197 countries to reduce GHG emissions. The effect of the reentry on future U.S. policy regarding GHG emissions and on other
among 197 countries to reduce GHG emissions. The effect of the reentry on future U.S. policy regarding GHG emissions and on other
GHG regulation is uncertain. Additionally, the extent to which other countries implement that agreement could have an adverse direct
GHG regulation is uncertain. Additionally, the extent to which other countries implement that agreement could have an adverse direct
or indirect effect on our business.
or indirect effect on our business.

We are also subject to federal, state and local environmental laws and regulations relating to, among other things, the shipment of
We are also subject to federal, state and local environmental laws and regulations relating to, among other things, the shipment of
dangerous goods and contingency planning for spills of petroleum products. Additionally, we are subject to numerous regulations
dangerous goods and contingency planning for spills of petroleum products. Additionally, we are subject to numerous regulations
dealing with underground fuel storage tanks, hazardous waste handling, vehicle and equipment emissions and noise and the discharge
dealing with underground fuel storage tanks, hazardous waste handling, vehicle and equipment emissions and noise and the discharge
of effluents from our properties and equipment. We have environmental management programs designed to ensure compliance with
of effluents from our properties and equipment. We have environmental management programs designed to ensure compliance with
these regulations.
these regulations.

Export Controls. In recent years, the U.S. government has increased the number of companies and persons subject to U.S. export
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
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
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 its implementing regulations,
monetary and other penalties. For example, the Export Control Reform Act of 2018 (the “ECRA”) and its implementing regulations,
the Export Administration Regulations (the “EARs”), hold carriers such as FedEx strictly liable for shipments that may violate the
the Export Administration Regulations (the “EARs”), hold carriers such as FedEx strictly liable for shipments that may violate the
EARs without requiring evidence that the carriers had knowledge of any violations. Violations of the ECRA can result in criminal
EARs without requiring evidence that the carriers had knowledge of any violations. Violations of the ECRA can result in criminal
penalties of up to $1 million and civil penalties of $305,000 (or twice the value of the transaction) per individual violation. FedEx is
penalties of up to $1 million and civil penalties of $305,000 (or twice the value of the transaction) per individual violation. FedEx is
investing in improvements and updates to its export control compliance programs. However, the heightened focus on export controls
investing 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.
by the U.S. government increases FedEx’s exposure to potential regulatory penalties and could result in higher compliance costs.

In June 2019 FedEx filed suit in U.S. District Court in the District of Columbia seeking to enjoin the U.S. Department of Commerce
In June 2019 FedEx filed suit in U.S. District Court in the District of Columbia seeking to enjoin the U.S. Department of Commerce
(the “DOC”) from enforcing prohibitions contained in the EARs against FedEx. FedEx believes that the EARs violate common
(the “DOC”) from enforcing prohibitions contained in the EARs against FedEx. FedEx believes that the EARs violate common
carriers’ rights to due process under the Fifth Amendment of the U.S. Constitution as they unreasonably hold common carriers strictly
carriers’ rights to due process under the Fifth Amendment of the U.S. Constitution as they unreasonably hold common carriers strictly
liable for shipments that may violate the EARs without requiring evidence that the carriers had knowledge of any violations. In
liable for shipments that may violate the EARs without requiring evidence that the carriers had knowledge of any violations. In
September 2020 the court granted the DOC’s motion to dismiss the lawsuit. In November 2020 we appealed this decision.
September 2020 the court granted the DOC’s motion to dismiss the lawsuit. In November 2020 we appealed this decision.

Customs. Our activities, including customs brokerage and freight forwarding, are subject to regulation by U.S. Customs and Border
Customs. Our activities, including customs brokerage and freight forwarding, are subject to regulation by U.S. Customs and Border
Protection and the TSA within the Department of Homeland Security (customs brokerage and security issues), the U.S. Federal
Protection and the TSA within the Department of Homeland Security (customs brokerage and security issues), the U.S. Federal
Maritime Commission (ocean freight forwarding) and the DOT (air freight forwarding). Our offshore operations are subject to similar
Maritime Commission (ocean freight forwarding) and the DOT (air freight forwarding). Our offshore operations are subject to similar
regulation by the regulatory authorities of foreign jurisdictions.
regulation by the regulatory authorities of foreign jurisdictions.

Labor. All U.S. employees at FedEx Express are covered by the Railway Labor Act of 1926, as amended (the “RLA”), while labor
Labor. All U.S. employees at FedEx Express 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
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
“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 before a union can strike or an
mandatory government-led mediation of contract disputes supervised by the National Mediation Board 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
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 economy. Under the NLRA, employees can unionize in small localized groups, and government-led
down large portions of the economy. Under the NLRA, employees can unionize in small localized groups, and government-led
mediation is not a required step in the negotiation process.
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
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 the dominant national transportation systems of today. As an air express carrier with an
expanded to cover airlines, which are the dominant national transportation systems of today. As an air express carrier with an
integrated air/ground network, FedEx Express and its employees have been covered by the RLA since the founding of the company in
integrated air/ground network, FedEx Express and its employees have been covered by the RLA since the founding of the company in
1971. The purpose of the RLA is to offer employees a process by which to unionize (if they choose) and engage in collective
1971. The purpose of the RLA is to offer employees a process by which to unionize (if they choose) and engage in collective
bargaining while also protecting global commerce from damaging work stoppages and delays. Specifically, the RLA ensures that an
bargaining while also protecting global commerce from damaging work stoppages and delays. Specifically, the RLA ensures that an
entire transportation system, such as at FedEx Express, cannot be shut down by the actions of a local segment of the network.
entire transportation system, such as at FedEx Express, 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
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 Express employees from the
our employees. For example, there is always a possibility that Congress could remove most FedEx Express employees from the
jurisdiction of the RLA, thereby exposing the FedEx Express network to sporadic labor disputes and the risk that small groups of
jurisdiction of the RLA, thereby exposing the FedEx Express network to sporadic labor disputes and the risk that small groups of
employees could disrupt the entire air/ground network. In addition, federal and state governmental agencies, such as the National
employees could disrupt the entire air/ground network. In addition, federal and state governmental agencies, such as the National
Mediation Board and the NLRB, have and may continue to take actions that could make it easier for our employees to organize under
Mediation Board and the NLRB, have and may continue to take actions that could make it easier for our employees 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
the RLA or NLRA. For a description of these and other potential labor law changes, see “Item 1A. Risk Factors” of this Annual
Report.
Report.

Data Protection. Recently, there has been heightened regulatory and enforcement focus on data protection in the U.S. (at both the

state and federal level) and abroad. For example, the EU’s General Data Protection Regulation (“GDPR”), which became effective in

2018, greatly increases the jurisdictional reach of EU law and adds a broad array of requirements related to personal data, including

individual notice and opt-out preferences and the public disclosure of significant data breaches. Additionally, violations of the GDPR

can result in fines of as much as 4% of a company’s annual revenue. Other governments have enacted or are enacting similar data

protection laws, including data localization laws that require data to stay within their borders. For more information regarding data

protection regulation, see “Item 1A. Risk Factors” of this Annual Report.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Annual Report, you should carefully consider the following factors, which could

materially affect our business, results of operations, financial condition and the price of our common stock. Additional risks not

currently known to us or that we currently deem to be immaterial also may materially affect our business, results of operations,

financial condition and the price of our common stock.

Macroeconomic and Market Risks

We are directly affected by the state of the global economy and anti-trade measures. While macroeconomic risks apply to most

companies, we are particularly vulnerable. The transportation industry is highly cyclical and especially susceptible to trends in

economic activity. Our primary business is to transport goods, so our business levels are directly tied to the purchase and production

of goods — key macroeconomic measurements influenced by, among other things, inflation and deflation, supply chain disruptions,

interest rates and currency exchange rates, labor costs, fuel and energy prices, buying patterns, debt levels, credit availability and

disposable income. When individuals and companies purchase and produce fewer goods, we transport fewer goods, and as companies

move manufacturing closer to consumer markets and expand the number of distribution centers, we transport goods shorter distances.

Certain retailers are making investments to house goods in closer proximity to customers in connection with the recent growth in e-

commerce demand, and we expect this trend to continue. In addition, we have a relatively high fixed-cost structure, which is difficult

to quickly adjust to match shifting volume levels. Moreover, as we continue to grow our international business, we are increasingly

affected by the health of the global economy, the rate of growth of global trade, world trade policies, international taxes, government-

to-government relations and the typically more volatile economies of emerging markets. For instance, anti-trade and protectionist

measures adopted by the U.S. or other countries in which we do business, such as trade controls, tariffs, quotas, embargoes, sanctions,

or retaliation by another country against such measures, could result in economic uncertainty and instability, resulting in fewer goods

being transported globally.

The uncertainty regarding the status of the United Kingdom’s exit from the EU (“Brexit”) has negatively impacted the United

Kingdom’s and the EU’s economies. This negative impact will likely continue until the United Kingdom and EU complete a post-

Brexit trade deal, which is still in the process of being implemented. Any additional impact of Brexit will depend on application of the

terms of the trade deal. Further discussion between the parties on implementation of the trade deal could trigger significant market and

economic disruption, and the demand for our services could be depressed. Following Brexit, the movement of goods between the

United Kingdom and the remaining member states of the EU has become subject to additional inspections and documentation checks,

which may create delays at ports of entry and departure and potentially impact our ability to effectively provide our services.

Additionally, depending on the application of the terms of the trade deal we may face new regulations regarding trade, aviation, tax,

security and employees, among others, in the United Kingdom. Compliance with such regulations could be costly, negatively

impacting our business, results of operations and financial condition. The post-Brexit trade deal could also adversely affect European

and worldwide economic and market conditions and could contribute to instability in global financial and foreign exchange markets,

including volatility in the value of the euro and the British pound.

We expect continued uncertainty in the global economy during 2022. Additionally, we incurred higher costs due to labor market

challenges in 2021, and we expect such conditions to continue to be present in 2022. For more information, see “Our failure to retain

or attract employee talent or maintain our company culture, as well as increases in labor and purchased transportation costs, could

adversely impact our business and results of operations.” below and “Item 7. Management’s Discussion and Analysis of Results of

Operations and Financial Condition” of this Annual Report.

- 22 -
- 22 -

- 23 -

Additionally, in calendar 2016, the EPA issued a finding that aircraft engine GHG emissions cause or contribute to air pollution that

may reasonably be anticipated to endanger public health or welfare. In March 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 current in-production

aircraft types from calendar 2023. Additionally, a cutoff date of calendar 2028 for production of aircraft that do not comply with

proposed standards was adopted. These standards are considered to be especially stringent for larger aircraft weighing over 60 tons. In

December 2020, the EPA adopted its own aircraft and aircraft engine GHG emissions standards, which are aligned with the 2017

ICAO emissions standards. 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 2021 the U.S. reentered the Paris climate accord, an agreement

among 197 countries to reduce GHG emissions. The effect of the reentry on future U.S. policy regarding GHG emissions and on other

GHG regulation is uncertain. Additionally, the extent to which other countries implement that agreement could have an adverse direct

or indirect effect on our business.

We are also subject to federal, state and local environmental laws and regulations relating to, among other things, the shipment of

dangerous goods and contingency planning for spills of petroleum products. Additionally, we are subject to numerous regulations

dealing with underground fuel storage tanks, hazardous waste handling, vehicle and equipment emissions and noise and the discharge

of effluents from our properties and equipment. We have environmental management programs designed to ensure compliance with

these regulations.

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 its implementing regulations,

the Export Administration Regulations (the “EARs”), hold carriers such as FedEx strictly liable for shipments that may violate the

EARs without requiring evidence that the carriers had knowledge of any violations. Violations of the ECRA can result in criminal

penalties of up to $1 million and civil penalties of $305,000 (or twice the value of the transaction) per individual violation. FedEx is

investing 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.

In June 2019 FedEx filed suit in U.S. District Court in the District of Columbia seeking to enjoin the U.S. Department of Commerce

(the “DOC”) from enforcing prohibitions contained in the EARs against FedEx. FedEx believes that the EARs violate common

carriers’ rights to due process under the Fifth Amendment of the U.S. Constitution as they unreasonably hold common carriers strictly

liable for shipments that may violate the EARs without requiring evidence that the carriers had knowledge of any violations. In

September 2020 the court granted the DOC’s motion to dismiss the lawsuit. In November 2020 we appealed this decision.

Customs. Our activities, including customs brokerage and freight forwarding, are subject to regulation by U.S. Customs and Border

Protection and the TSA within the Department of Homeland Security (customs brokerage and security issues), the U.S. Federal

Maritime Commission (ocean freight forwarding) and the DOT (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 Express 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 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 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 the dominant national transportation systems of today. As an air express carrier with an

integrated air/ground network, FedEx Express and its employees have been covered by the RLA since the founding of the company in

1971. The purpose of the RLA is to offer employees a process by which to unionize (if they choose) and engage in collective

bargaining while also protecting global commerce from damaging work stoppages and delays. Specifically, the RLA ensures that an

entire transportation system, such as at FedEx Express, 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 Express employees from the

jurisdiction of the RLA, thereby exposing the FedEx Express network to sporadic labor disputes and the risk that small groups of

employees could disrupt the entire air/ground network. In addition, federal and state governmental agencies, such as the National

Mediation Board and the NLRB, have and may continue to take actions that could make it easier for our employees 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. Recently, there has been heightened regulatory and enforcement focus on data protection in the U.S. (at both the
Data Protection. Recently, there has been heightened regulatory and enforcement focus on data protection in the U.S. (at both the
state and federal level) and abroad. For example, the EU’s General Data Protection Regulation (“GDPR”), which became effective in
state and federal level) and abroad. For example, the EU’s General Data Protection Regulation (“GDPR”), which became effective in
2018, greatly increases the jurisdictional reach of EU law and adds a broad array of requirements related to personal data, including
2018, greatly increases the jurisdictional reach of EU law and adds a broad array of requirements related to personal data, including
individual notice and opt-out preferences and the public disclosure of significant data breaches. Additionally, violations of the GDPR
individual notice and opt-out preferences and the public disclosure of significant data breaches. Additionally, violations of the GDPR
can result in fines of as much as 4% of a company’s annual revenue. Other governments have enacted or are enacting similar data
can result in fines of as much as 4% of a company’s annual revenue. Other governments have enacted or are enacting similar data
protection laws, including data localization laws that require data to stay within their borders. For more information regarding data
protection laws, including data localization laws that require data to stay within their borders. For more information regarding data
protection regulation, see “Item 1A. Risk Factors” of this Annual Report.
protection regulation, see “Item 1A. Risk Factors” of this Annual Report.

ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Annual Report, you should carefully consider the following factors, which could
In addition to the other information set forth in this Annual Report, you should carefully consider the following factors, which could
materially affect our business, results of operations, financial condition and the price of our common stock. Additional risks not
materially affect our business, results of operations, financial condition and the price of our common stock. Additional risks not
currently known to us or that we currently deem to be immaterial also may materially affect our business, results of operations,
currently known to us or that we currently deem to be immaterial also may materially affect our business, results of operations,
financial condition and the price of our common stock.
financial condition and the price of our common stock.

Macroeconomic and Market Risks
Macroeconomic and Market Risks

We are directly affected by the state of the global economy and anti-trade measures. While macroeconomic risks apply to most
We are directly affected by the state of the global economy and anti-trade measures. While macroeconomic risks apply to most
companies, we are particularly vulnerable. The transportation industry is highly cyclical and especially susceptible to trends in
companies, we are particularly vulnerable. The transportation industry is highly cyclical and especially susceptible to trends in
economic activity. Our primary business is to transport goods, so our business levels are directly tied to the purchase and production
economic activity. Our primary business is to transport goods, so our business levels are directly tied to the purchase and production
of goods — key macroeconomic measurements influenced by, among other things, inflation and deflation, supply chain disruptions,
of goods — key macroeconomic measurements influenced by, among other things, inflation and deflation, supply chain disruptions,
interest rates and currency exchange rates, labor costs, fuel and energy prices, buying patterns, debt levels, credit availability and
interest rates and currency exchange rates, labor costs, fuel and energy prices, buying patterns, debt levels, credit availability and
disposable income. When individuals and companies purchase and produce fewer goods, we transport fewer goods, and as companies
disposable income. When individuals and companies purchase and produce fewer goods, we transport fewer goods, and as companies
move manufacturing closer to consumer markets and expand the number of distribution centers, we transport goods shorter distances.
move manufacturing closer to consumer markets and expand the number of distribution centers, we transport goods shorter distances.
Certain retailers are making investments to house goods in closer proximity to customers in connection with the recent growth in e-
Certain retailers are making investments to house goods in closer proximity to customers in connection with the recent growth in e-
commerce demand, and we expect this trend to continue. In addition, we have a relatively high fixed-cost structure, which is difficult
commerce demand, and we expect this trend to continue. In addition, we have a relatively high fixed-cost structure, which is difficult
to quickly adjust to match shifting volume levels. Moreover, as we continue to grow our international business, we are increasingly
to quickly adjust to match shifting volume levels. Moreover, as we continue to grow our international business, we are increasingly
affected by the health of the global economy, the rate of growth of global trade, world trade policies, international taxes, government-
affected by the health of the global economy, the rate of growth of global trade, world trade policies, international taxes, government-
to-government relations and the typically more volatile economies of emerging markets. For instance, anti-trade and protectionist
to-government relations and the typically more volatile economies of emerging markets. For instance, anti-trade and protectionist
measures adopted by the U.S. or other countries in which we do business, such as trade controls, tariffs, quotas, embargoes, sanctions,
measures adopted by the U.S. or other countries in which we do business, such as trade controls, tariffs, quotas, embargoes, sanctions,
or retaliation by another country against such measures, could result in economic uncertainty and instability, resulting in fewer goods
or retaliation by another country against such measures, could result in economic uncertainty and instability, resulting in fewer goods
being transported globally.
being transported globally.

The uncertainty regarding the status of the United Kingdom’s exit from the EU (“Brexit”) has negatively impacted the United
The uncertainty regarding the status of the United Kingdom’s exit from the EU (“Brexit”) has negatively impacted the United
Kingdom’s and the EU’s economies. This negative impact will likely continue until the United Kingdom and EU complete a post-
Kingdom’s and the EU’s economies. This negative impact will likely continue until the United Kingdom and EU complete a post-
Brexit trade deal, which is still in the process of being implemented. Any additional impact of Brexit will depend on application of the
Brexit trade deal, which is still in the process of being implemented. Any additional impact of Brexit will depend on application of the
terms of the trade deal. Further discussion between the parties on implementation of the trade deal could trigger significant market and
terms of the trade deal. Further discussion between the parties on implementation of the trade deal could trigger significant market and
economic disruption, and the demand for our services could be depressed. Following Brexit, the movement of goods between the
economic disruption, and the demand for our services could be depressed. Following Brexit, the movement of goods between the
United Kingdom and the remaining member states of the EU has become subject to additional inspections and documentation checks,
United Kingdom and the remaining member states of the EU has become subject to additional inspections and documentation checks,
which may create delays at ports of entry and departure and potentially impact our ability to effectively provide our services.
which may create delays at ports of entry and departure and potentially impact our ability to effectively provide our services.
Additionally, depending on the application of the terms of the trade deal we may face new regulations regarding trade, aviation, tax,
Additionally, depending on the application of the terms of the trade deal we may face new regulations regarding trade, aviation, tax,
security and employees, among others, in the United Kingdom. Compliance with such regulations could be costly, negatively
security and employees, among others, in the United Kingdom. Compliance with such regulations could be costly, negatively
impacting our business, results of operations and financial condition. The post-Brexit trade deal could also adversely affect European
impacting our business, results of operations and financial condition. The post-Brexit trade deal could also adversely affect European
and worldwide economic and market conditions and could contribute to instability in global financial and foreign exchange markets,
and worldwide economic and market conditions and could contribute to instability in global financial and foreign exchange markets,
including volatility in the value of the euro and the British pound.
including volatility in the value of the euro and the British pound.

We expect continued uncertainty in the global economy during 2022. Additionally, we incurred higher costs due to labor market
We expect continued uncertainty in the global economy during 2022. Additionally, we incurred higher costs due to labor market
challenges in 2021, and we expect such conditions to continue to be present in 2022. For more information, see “Our failure to retain
challenges in 2021, and we expect such conditions to continue to be present in 2022. For more information, see “Our failure to retain
or attract employee talent or maintain our company culture, as well as increases in labor and purchased transportation costs, could
or attract employee talent or maintain our company culture, as well as increases in labor and purchased transportation costs, could
adversely impact our business and results of operations.” below and “Item 7. Management’s Discussion and Analysis of Results of
adversely impact our business and results of operations.” below and “Item 7. Management’s Discussion and Analysis of Results of
Operations and Financial Condition” of this Annual Report.
Operations and Financial Condition” of this Annual Report.

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- 23 -
- 23 -

Additional changes in international trade policies and relations could significantly reduce the volume of goods transported
Additional changes in international trade policies and relations could significantly reduce the volume of goods transported
globally and adversely affect our business and results of operations. The U.S. government has made and maintained significant
globally and adversely affect our business and results of operations. The U.S. government has made and maintained significant
changes in U.S. trade policy and has taken certain actions that have negatively impacted U.S. trade, including imposing tariffs on
changes in U.S. trade policy and has taken certain actions that have negatively impacted U.S. trade, including imposing tariffs on
certain goods imported into the U.S. Several governments, including the EU, China and India, have imposed tariffs on certain goods
certain goods imported into the U.S. Several governments, including the EU, China and India, have imposed tariffs on certain goods
imported from the U.S. These actions contributed to weakness in the global economy that adversely affected our results of operations
imported from the U.S. These actions contributed to weakness in the global economy that adversely affected our results of operations
in recent years. Any further changes in U.S. or international trade policy could trigger additional retaliatory actions by affected
in recent years. Any further changes in U.S. or international trade policy could trigger additional retaliatory actions by affected
countries, resulting in “trade wars” and further increased costs for goods transported globally, which may reduce customer demand for
countries, resulting in “trade wars” and further increased costs for goods transported globally, which may reduce customer demand for
these products if the parties having to pay those tariffs increase their prices, or in trading partners limiting their trade with countries
these products if the parties having to pay those tariffs increase their prices, or in trading partners limiting their trade with countries
that impose anti-trade measures. Political uncertainty surrounding international trade and other disputes could also have a negative
that impose anti-trade measures. Political uncertainty surrounding international trade and other disputes could also have a negative
effect on business and consumer confidence and spending. Such conditions could have an adverse effect on our business, results of
effect on business and consumer confidence and spending. Such conditions could have an adverse effect on our business, results of
operations and financial condition, as well as on the price of our common stock.
operations and financial condition, as well as on the price of our common stock.

We also depend on and interact with the technology and systems of third parties, including our customers and third-party service

providers such as cloud service providers and delivery services. Such third parties may host, process or have access to information we

maintain about our company, customers, employees and vendors or operate systems that are critical to our business operations and

services. Like us, these third parties are subject to risks imposed by data breaches, cyberattacks and other events or actions that could

damage, disrupt or close down their networks or systems. We have security processes, protocols and standards in place, including

contractual provisions requiring such security measures, that are applicable to such third parties and are designed to protect

information that is held by them, or to which they have access, as a result of their engagements with us. Nevertheless, a cyberattack

could defeat one or more of such third parties’ security measures, allowing an attacker to obtain information about our company,

customers, employees and vendors or disrupt our operations. These third parties may also experience operational disruptions or human

error that could result in unauthorized access to sensitive or confidential data regarding our operations, customers, employees and

suppliers, including personal information.

Additionally, the U.S. government has taken action to limit the ability of domestic companies to engage in commerce with certain
Additionally, the U.S. government has taken action to limit the ability of domestic companies to engage in commerce with certain
foreign entities under certain circumstances, and foreign governments may investigate our compliance with these restrictions.
foreign entities under certain circumstances, and foreign governments may investigate our compliance with these restrictions.
Furthermore, given the nature of our business and our global recognizability, foreign governments may target FedEx by limiting the
Furthermore, given the nature of our business and our global recognizability, foreign governments may target FedEx by limiting the
ability of foreign entities to do business with us in certain instances, imposing monetary or other penalties or taking other retaliatory
ability of foreign entities to do business with us in certain instances, imposing monetary or other penalties or taking other retaliatory
action, which could have an adverse effect on our business, results of operations and financial condition, as well as on the price of our
action, which could have an adverse effect on our business, results of operations and financial condition, as well as on the price of our
common stock.
common stock.

Our transportation businesses are impacted by the price and availability of jet and vehicle fuel. We must purchase large quantities
Our transportation businesses are impacted by the price and availability of jet and vehicle fuel. We must purchase large quantities
of fuel to operate our aircraft and vehicles, and the price and availability of fuel is beyond our control and can be highly volatile. In
of fuel to operate our aircraft and vehicles, and the price and availability of fuel is beyond our control and can be highly volatile. In
addition, our purchased transportation expense may be impacted by fuel costs. To date, we have been mostly successful in mitigating
addition, our purchased transportation expense may be impacted by fuel costs. To date, we have been mostly successful in mitigating
over time the expense impact of higher fuel costs through our indexed fuel surcharges, as the amount of the surcharges is closely
over time the expense impact of higher fuel costs through our indexed fuel surcharges, as the amount of the surcharges is closely
linked to the market prices for fuel. If we are unable to maintain or increase our fuel surcharges because of competitive pricing
linked to the market prices for fuel. If we are unable to maintain or increase our fuel surcharges because of competitive pricing
pressures or some other reason, fuel costs could adversely impact our operating results. As of May 31, 2021, we had no derivative
pressures or some other reason, fuel costs could adversely impact our operating results. As of May 31, 2021, we had no derivative
financial instruments to reduce our exposure to fuel price fluctuations. Even if we are able to offset the cost of fuel with our
financial instruments to reduce our exposure to fuel price fluctuations. Even if we are able to offset the cost of fuel with our
surcharges, high fuel surcharges could move our customers away from our higher-yielding express services to our lower-yielding
surcharges, high fuel surcharges could move our customers away from our higher-yielding express services to our lower-yielding
deferred or ground services or even reduce customer demand for our services altogether. In addition, disruptions in the supply of fuel
deferred or ground services or even reduce customer demand for our services altogether. In addition, disruptions in the supply of fuel
could have a negative impact on our ability to operate our transportation networks. Weather-related events, natural disasters, political
could have a negative impact on our ability to operate our transportation networks. Weather-related events, natural disasters, political
disruptions or wars involving oil-producing countries, economic sanctions imposed against oil-producing countries or specific
disruptions or wars involving oil-producing countries, economic sanctions imposed against oil-producing countries or specific
industry participants, changes in governmental policy concerning fuel production, transportation, taxes or marketing, changes in
industry participants, changes in governmental policy concerning fuel production, transportation, taxes or marketing, changes in
refining capacity, environmental concerns, cyberattacks and other unpredictable events may impact fuel supply and could result in
refining capacity, environmental concerns, cyberattacks and other unpredictable events may impact fuel supply and could result in
shortages and price increases in the future.
shortages and price increases in the future.

Operating Risks
Operating Risks

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

The technology infrastructure of acquired businesses, as well as their practices related to the use and maintenance of data, could also
The technology infrastructure of acquired businesses, as well as their practices related to the use and maintenance of data, could also
present issues that we were not able to identify prior to the acquisition. See “Failure to successfully implement our business strategy
present issues that we were not able to identify prior to the acquisition. See “Failure to successfully implement our business strategy
and effectively respond to changes in market dynamics and customer preferences will cause our future financial results to suffer.”
and effectively respond to changes in market dynamics and customer preferences will cause our future financial results to suffer.”
below for additional information on risks related to our recent acquisition of ShopRunner and launch of FedEx Dataworks.
below for additional information on risks related to our recent acquisition of ShopRunner and launch of FedEx Dataworks.

A disruption to our complex, global technology infrastructure, including those impacting our computer systems and websites, could

result in the loss of confidential business or customer information, require substantial repairs or replacements, resulting in significant

costs, and lead to the temporary or permanent transfer by customers of some or all of their business to our competitors. The foregoing

could harm our reputation and adversely impact our operations, customer service and results of operations. Additionally, a security

breach could require us to devote significant management resources to address the problems created. These types of adverse impacts

could also occur in the event the confidentiality, integrity or availability of company and customer information was compromised due

to a data loss by FedEx or a trusted third party. We or the third parties with which we share information may not discover any security

breach and loss of information for a significant period of time after the security breach occurs.

We have invested and continue to invest in technology security initiatives, information-technology risk management, business

continuity and disaster recovery plans, including investments to retire and replace end-of-life systems. The development and

maintenance of these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to

overcome security measures become increasingly more frequent, intense and sophisticated. Despite our efforts, we are not fully

insulated from data breaches, technology disruptions, data loss and cyber-fraud, which could adversely impact our competitiveness

and results of operations. For instance, in 2017 TNT Express worldwide operations were significantly affected due to the infiltration

of an information-technology virus known as NotPetya. In 2017 FedEx was one of many companies attacked by the rapidly spreading

ransomware described as WannaCry that exploited vulnerability in a third-party software program and infected computers using that

program, encrypting files and holding them for ransom. During 2018, we discovered an unsecured server hosted by one of our third-

party cloud service providers, which exposed some archived account information related to a service discontinued after our 2015

acquisition of Bongo International, LLC. The server has been secured, and we have found no indication that any information has been

misappropriated in connection with the incident. Additionally, we have experienced continual attempts by cyber criminals, some of

which were successful, to gain access to customer accounts for the purposes of fraudulently diverting and misappropriating items

being transported in our network. None of the WannaCry ransomware attack, unsecured server or fraudulent cyber activities caused a

material disruption to our systems or resulted in any material costs to FedEx.

While we have significant security processes and initiatives in place, we may be unable to detect or prevent a breach or disruption in

the future. Additionally, while we have insurance coverage designed to address certain aspects of cyber risks in place, such insurance

coverage may be insufficient to cover all losses or all types of claims that may arise. See “Our business is subject to complex and

evolving U.S. and foreign laws and regulations regarding data protection.” below for additional information on risks related to legal

and regulatory developments with respect to data protection.

The continuing impact of the COVID-19 pandemic on our business, results of operations and financial condition is highly

unpredictable. The COVID-19 pandemic has had varying impacts on the demand for our services, our business operations and the

global economy and supply chains. There is considerable uncertainty regarding the extent to which COVID-19 will continue to spread

in certain regions of the world and the extent and duration of measures to try to contain the virus, such as travel bans and restrictions,

quarantines, shelter-in-place orders, business and government shutdowns and other restrictions. This uncertainty is expected to

continue to impact our business in 2022.

We have experienced unprecedented demand for our residential delivery services, rivaling our peak holiday season traffic. We have

incurred increased costs associated with this demand and lower composite yields than our typical service mix. In addition, demand for

our commercial service offerings increased throughout 2021 as COVID-19 restrictions moderated globally while air freight capacity

remained constrained. Our business is labor and capital intensive in nature, which has required us to incur higher costs to operate our

networks during the pandemic. If we are unable to remain agile and continue to flex our networks to align with shipping volumes,

customer needs, disrupted global supply chains and other network inefficiencies, market demands and operating conditions, or are

unable to continuously respond to evolving governmental policies for the duration of a prolonged period of economic recovery, our

business operations could be negatively impacted, which could have a further adverse effect on our results of operations.

- 24 -
- 24 -

- 25 -

Additional changes in international trade policies and relations could significantly reduce the volume of goods transported

globally and adversely affect our business and results of operations. The U.S. government has made and maintained significant

changes in U.S. trade policy and has taken certain actions that have negatively impacted U.S. trade, including imposing tariffs on

certain goods imported into the U.S. Several governments, including the EU, China and India, have imposed tariffs on certain goods

imported from the U.S. These actions contributed to weakness in the global economy that adversely affected our results of operations

in recent years. Any further changes in U.S. or international trade policy could trigger additional retaliatory actions by affected

countries, resulting in “trade wars” and further increased costs for goods transported globally, which may reduce customer demand for

these products if the parties having to pay those tariffs increase their prices, or in trading partners limiting their trade with countries

that impose anti-trade measures. Political uncertainty surrounding international trade and other disputes could also have a negative

effect on business and consumer confidence and spending. Such conditions could have an adverse effect on our business, results of

operations and financial condition, as well as on the price of our common stock.

We also depend on and interact with the technology and systems of third parties, including our customers and third-party service
We also depend on and interact with the technology and systems of third parties, including our customers and third-party service
providers such as cloud service providers and delivery services. Such third parties may host, process or have access to information we
providers such as cloud service providers and delivery services. Such third parties may host, process or have access to information we
maintain about our company, customers, employees and vendors or operate systems that are critical to our business operations and
maintain about our company, customers, employees and vendors or operate systems that are critical to our business operations and
services. Like us, these third parties are subject to risks imposed by data breaches, cyberattacks and other events or actions that could
services. Like us, these third parties are subject to risks imposed by data breaches, cyberattacks and other events or actions that could
damage, disrupt or close down their networks or systems. We have security processes, protocols and standards in place, including
damage, disrupt or close down their networks or systems. We have security processes, protocols and standards in place, including
contractual provisions requiring such security measures, that are applicable to such third parties and are designed to protect
contractual provisions requiring such security measures, that are applicable to such third parties and are designed to protect
information that is held by them, or to which they have access, as a result of their engagements with us. Nevertheless, a cyberattack
information that is held by them, or to which they have access, as a result of their engagements with us. Nevertheless, a cyberattack
could defeat one or more of such third parties’ security measures, allowing an attacker to obtain information about our company,
could defeat one or more of such third parties’ security measures, allowing an attacker to obtain information about our company,
customers, employees and vendors or disrupt our operations. These third parties may also experience operational disruptions or human
customers, employees and vendors or disrupt our operations. These third parties may also experience operational disruptions or human
error that could result in unauthorized access to sensitive or confidential data regarding our operations, customers, employees and
error that could result in unauthorized access to sensitive or confidential data regarding our operations, customers, employees and
suppliers, including personal information.
suppliers, including personal information.

Additionally, the U.S. government has taken action to limit the ability of domestic companies to engage in commerce with certain

foreign entities under certain circumstances, and foreign governments may investigate our compliance with these restrictions.

Furthermore, given the nature of our business and our global recognizability, foreign governments may target FedEx by limiting the

ability of foreign entities to do business with us in certain instances, imposing monetary or other penalties or taking other retaliatory

action, which could have an adverse effect on our business, results of operations and financial condition, as well as on the price of our

common stock.

Our transportation businesses are impacted by the price and availability of jet and vehicle fuel. We must purchase large quantities

of fuel to operate our aircraft and vehicles, and the price and availability of fuel is beyond our control and can be highly volatile. In

addition, our purchased transportation expense may be impacted by fuel costs. To date, we have been mostly successful in mitigating

over time the expense impact of higher fuel costs through our indexed fuel surcharges, as the amount of the surcharges is closely

linked to the market prices for fuel. If we are unable to maintain or increase our fuel surcharges because of competitive pricing

pressures or some other reason, fuel costs could adversely impact our operating results. As of May 31, 2021, we had no derivative

financial instruments to reduce our exposure to fuel price fluctuations. Even if we are able to offset the cost of fuel with our

surcharges, high fuel surcharges could move our customers away from our higher-yielding express services to our lower-yielding

deferred or ground services or even reduce customer demand for our services altogether. In addition, disruptions in the supply of fuel

could have a negative impact on our ability to operate our transportation networks. Weather-related events, natural disasters, political

disruptions or wars involving oil-producing countries, economic sanctions imposed against oil-producing countries or specific

industry participants, changes in governmental policy concerning fuel production, transportation, taxes or marketing, changes in

refining capacity, environmental concerns, cyberattacks and other unpredictable events may impact fuel supply and could result in

shortages and price increases in the future.

Operating Risks

A significant data breach or other disruption to our technology infrastructure could disrupt our operations and result in the loss of

critical confidential information, adversely impacting our reputation, business or results of operations. Our ability to attract and

retain customers, to efficiently operate our businesses, and to compete effectively depends in part upon the sophistication, security and

reliability of our technology network, including our ability to provide features of service that are important to our customers, to protect

our confidential business information and the information provided by our customers, and to maintain customer confidence in our

ability to protect our systems and to provide services consistent with their expectations. For example, we rely on information

technology to receive package level information in advance of physical receipt of packages, to track items that move through our

delivery systems, to efficiently plan deliveries, to execute billing processes, and to track and report financial and operational data. We

are subject to risks imposed by data breaches and operational disruptions, including through cyberattack or cyber-intrusion, including

by computer hackers, foreign governments, cyber terrorists, cyber criminals and malicious employees or other insiders of FedEx or

third-party service providers. Data breaches of companies and governments have increased in recent years as the number, intensity and

sophistication of attempted attacks and intrusions from around the world have increased and we, our customers and third parties

increasingly store and transmit data by means of connected information technology systems. Additionally, risks such as code

anomalies, “Acts of God,” transitional challenges in migrating operating company functionality to our FedEx enterprise automation

platforms, data leakage, cyber-fraud and human error pose a direct threat to our products, services, systems and data and could result

in unauthorized or block legitimate access to sensitive or confidential data regarding our operations, customers, employees and

suppliers, including personal information.

The technology infrastructure of acquired businesses, as well as their practices related to the use and maintenance of data, could also

present issues that we were not able to identify prior to the acquisition. See “Failure to successfully implement our business strategy

and effectively respond to changes in market dynamics and customer preferences will cause our future financial results to suffer.”

below for additional information on risks related to our recent acquisition of ShopRunner and launch of FedEx Dataworks.

A disruption to our complex, global technology infrastructure, including those impacting our computer systems and websites, could
A disruption to our complex, global technology infrastructure, including those impacting our computer systems and websites, could
result in the loss of confidential business or customer information, require substantial repairs or replacements, resulting in significant
result in the loss of confidential business or customer information, require substantial repairs or replacements, resulting in significant
costs, and lead to the temporary or permanent transfer by customers of some or all of their business to our competitors. The foregoing
costs, and lead to the temporary or permanent transfer by customers of some or all of their business to our competitors. The foregoing
could harm our reputation and adversely impact our operations, customer service and results of operations. Additionally, a security
could harm our reputation and adversely impact our operations, customer service and results of operations. Additionally, a security
breach could require us to devote significant management resources to address the problems created. These types of adverse impacts
breach could require us to devote significant management resources to address the problems created. These types of adverse impacts
could also occur in the event the confidentiality, integrity or availability of company and customer information was compromised due
could also occur in the event the confidentiality, integrity or availability of company and customer information was compromised due
to a data loss by FedEx or a trusted third party. We or the third parties with which we share information may not discover any security
to a data loss by FedEx or a trusted third party. We or the third parties with which we share information may not discover any security
breach and loss of information for a significant period of time after the security breach occurs.
breach and loss of information for a significant period of time after the security breach occurs.

We have invested and continue to invest in technology security initiatives, information-technology risk management, business
We have invested and continue to invest in technology security initiatives, information-technology risk management, business
continuity and disaster recovery plans, including investments to retire and replace end-of-life systems. The development and
continuity and disaster recovery plans, including investments to retire and replace end-of-life systems. The development and
maintenance of these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to
maintenance of these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to
overcome security measures become increasingly more frequent, intense and sophisticated. Despite our efforts, we are not fully
overcome security measures become increasingly more frequent, intense and sophisticated. Despite our efforts, we are not fully
insulated from data breaches, technology disruptions, data loss and cyber-fraud, which could adversely impact our competitiveness
insulated from data breaches, technology disruptions, data loss and cyber-fraud, which could adversely impact our competitiveness
and results of operations. For instance, in 2017 TNT Express worldwide operations were significantly affected due to the infiltration
and results of operations. For instance, in 2017 TNT Express worldwide operations were significantly affected due to the infiltration
of an information-technology virus known as NotPetya. In 2017 FedEx was one of many companies attacked by the rapidly spreading
of an information-technology virus known as NotPetya. In 2017 FedEx was one of many companies attacked by the rapidly spreading
ransomware described as WannaCry that exploited vulnerability in a third-party software program and infected computers using that
ransomware described as WannaCry that exploited vulnerability in a third-party software program and infected computers using that
program, encrypting files and holding them for ransom. During 2018, we discovered an unsecured server hosted by one of our third-
program, encrypting files and holding them for ransom. During 2018, we discovered an unsecured server hosted by one of our third-
party cloud service providers, which exposed some archived account information related to a service discontinued after our 2015
party cloud service providers, which exposed some archived account information related to a service discontinued after our 2015
acquisition of Bongo International, LLC. The server has been secured, and we have found no indication that any information has been
acquisition of Bongo International, LLC. The server has been secured, and we have found no indication that any information has been
misappropriated in connection with the incident. Additionally, we have experienced continual attempts by cyber criminals, some of
misappropriated in connection with the incident. Additionally, we have experienced continual attempts by cyber criminals, some of
which were successful, to gain access to customer accounts for the purposes of fraudulently diverting and misappropriating items
which were successful, to gain access to customer accounts for the purposes of fraudulently diverting and misappropriating items
being transported in our network. None of the WannaCry ransomware attack, unsecured server or fraudulent cyber activities caused a
being transported in our network. None of the WannaCry ransomware attack, unsecured server or fraudulent cyber activities caused a
material disruption to our systems or resulted in any material costs to FedEx.
material disruption to our systems or resulted in any material costs to FedEx.

While we have significant security processes and initiatives in place, we may be unable to detect or prevent a breach or disruption in
While we have significant security processes and initiatives in place, we may be unable to detect or prevent a breach or disruption in
the future. Additionally, while we have insurance coverage designed to address certain aspects of cyber risks in place, such insurance
the future. Additionally, while we have insurance coverage designed to address certain aspects of cyber risks in place, such insurance
coverage may be insufficient to cover all losses or all types of claims that may arise. See “Our business is subject to complex and
coverage may be insufficient to cover all losses or all types of claims that may arise. See “Our business is subject to complex and
evolving U.S. and foreign laws and regulations regarding data protection.” below for additional information on risks related to legal
evolving U.S. and foreign laws and regulations regarding data protection.” below for additional information on risks related to legal
and regulatory developments with respect to data protection.
and regulatory developments with respect to data protection.

The continuing impact of the COVID-19 pandemic on our business, results of operations and financial condition is highly
The continuing impact of the COVID-19 pandemic on our business, results of operations and financial condition is highly
unpredictable. The COVID-19 pandemic has had varying impacts on the demand for our services, our business operations and the
unpredictable. The COVID-19 pandemic has had varying impacts on the demand for our services, our business operations and the
global economy and supply chains. There is considerable uncertainty regarding the extent to which COVID-19 will continue to spread
global economy and supply chains. There is considerable uncertainty regarding the extent to which COVID-19 will continue to spread
in certain regions of the world and the extent and duration of measures to try to contain the virus, such as travel bans and restrictions,
in certain regions of the world and the extent and duration of measures to try to contain the virus, such as travel bans and restrictions,
quarantines, shelter-in-place orders, business and government shutdowns and other restrictions. This uncertainty is expected to
quarantines, shelter-in-place orders, business and government shutdowns and other restrictions. This uncertainty is expected to
continue to impact our business in 2022.
continue to impact our business in 2022.

We have experienced unprecedented demand for our residential delivery services, rivaling our peak holiday season traffic. We have
We have experienced unprecedented demand for our residential delivery services, rivaling our peak holiday season traffic. We have
incurred increased costs associated with this demand and lower composite yields than our typical service mix. In addition, demand for
incurred increased costs associated with this demand and lower composite yields than our typical service mix. In addition, demand for
our commercial service offerings increased throughout 2021 as COVID-19 restrictions moderated globally while air freight capacity
our commercial service offerings increased throughout 2021 as COVID-19 restrictions moderated globally while air freight capacity
remained constrained. Our business is labor and capital intensive in nature, which has required us to incur higher costs to operate our
remained constrained. Our business is labor and capital intensive in nature, which has required us to incur higher costs to operate our
networks during the pandemic. If we are unable to remain agile and continue to flex our networks to align with shipping volumes,
networks during the pandemic. If we are unable to remain agile and continue to flex our networks to align with shipping volumes,
customer needs, disrupted global supply chains and other network inefficiencies, market demands and operating conditions, or are
customer needs, disrupted global supply chains and other network inefficiencies, market demands and operating conditions, or are
unable to continuously respond to evolving governmental policies for the duration of a prolonged period of economic recovery, our
unable to continuously respond to evolving governmental policies for the duration of a prolonged period of economic recovery, our
business operations could be negatively impacted, which could have a further adverse effect on our results of operations.
business operations could be negatively impacted, which could have a further adverse effect on our results of operations.

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We have also incurred increased operating expenses related to personal protective equipment and medical/safety supplies, as well as
We have also incurred increased operating expenses related to personal protective equipment and medical/safety supplies, as well as
additional security and cleaning services, in order to protect our team members and customers. Due to the size, scope and
additional security and cleaning services, in order to protect our team members and customers. Due to the size, scope and
geographically dispersed nature of our operations, the expenses we incur to protect the health and safety of certain of our employees
geographically dispersed nature of our operations, the expenses we incur to protect the health and safety of certain of our employees
may be higher than similar expenses incurred by companies in other industries.
may be higher than similar expenses incurred by companies in other industries.

Additionally, a significant number of our employees as well as customers and others with whom we do business continue to work
Additionally, a significant number of our employees as well as customers and others with whom we do business continue to work
remotely in response to the COVID-19 pandemic. Our business operations may be disrupted, and we may experience increased risk of
remotely in response to the COVID-19 pandemic. Our business operations may be disrupted, and we may experience increased risk of
adverse effects on our business, if a significant portion of our workforce or certain business operations are negatively impacted as a
adverse effects on our business, if a significant portion of our workforce or certain business operations are negatively impacted as a
result of remote work arrangements, including due to cyber risks or other disruption to our technology infrastructure.
result of remote work arrangements, including due to cyber risks or other disruption to our technology infrastructure.

The continuing impact of the COVID-19 pandemic, including the extent of its effect on our business, results of operations and
The continuing impact of the COVID-19 pandemic, including the extent of its effect on our business, results of operations and
financial condition as well as the global economy, will be dictated by future developments that remain uncertain and cannot be
financial condition as well as the global economy, will be dictated by future developments that remain uncertain and cannot be
predicted, such as its duration and spread, the success of efforts to contain it and treat its impact, the possibility of additional
predicted, such as its duration and spread, the success of efforts to contain it and treat its impact, the possibility of additional
subsequent widespread outbreaks and variant strains and the impact of actions taken in response, resulting effects on the economic
subsequent widespread outbreaks and variant strains and the impact of actions taken in response, resulting effects on the economic
conditions in the global markets in which we operate, the future rate of e-commerce growth and the timeline for recovery of passenger
conditions in the global markets in which we operate, the future rate of e-commerce growth and the timeline for recovery of passenger
airline cargo capacity. Certain financial and operating metrics that we reported for 2021 may not be indicative of results for future
airline cargo capacity. Certain financial and operating metrics that we reported for 2021 may not be indicative of results for future
periods once the impact of the COVID-19 pandemic subsides.
periods once the impact of the COVID-19 pandemic subsides.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening
To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening
many other risks described in this section, any of which could materially and adversely affect our business, results of operations and
many other risks described in this section, any of which could materially and adversely affect our business, results of operations and
financial condition. Such risks include, but are not limited to, additional changes in the state of the global economy and international
financial condition. Such risks include, but are not limited to, additional changes in the state of the global economy and international
trade policies and relations; our ability to implement our business strategy and effectively respond to changes in market dynamics and
trade policies and relations; our ability to implement our business strategy and effectively respond to changes in market dynamics and
customer preferences; our strong reputation and the value of the FedEx brand; our ability to meet our labor and purchased
customer preferences; our strong reputation and the value of the FedEx brand; our ability to meet our labor and purchased
transportation needs while controlling related costs; our ability to execute and effectively operate, integrate, leverage, and grow
transportation needs while controlling related costs; our ability to execute and effectively operate, integrate, leverage, and grow
acquired businesses; changes in the business and financial soundness of the USPS; our ability to achieve our goal of carbon neutrality
acquired businesses; changes in the business and financial soundness of the USPS; our ability to achieve our goal of carbon neutrality
for our global operations by calendar 2040; and the impact of litigation or claims from customers, team members, suppliers, regulators
for our global operations by calendar 2040; and the impact of litigation or claims from customers, team members, suppliers, regulators
or other third parties relating to the COVID-19 pandemic or our actions in response to the pandemic.
or other third parties relating to the COVID-19 pandemic or our actions in response to the pandemic.

For more information about the COVID-19 pandemic and its effect on our business, results of operations and financial condition, see
For more information about the COVID-19 pandemic and its effect on our business, results of operations and financial condition, see
“Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition—Results of Operations and
“Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition—Results of Operations and
Outlook—Consolidated Results—Impact of the COVID-19 Pandemic” of this Annual Report.
Outlook—Consolidated Results—Impact of the COVID-19 Pandemic” of this Annual Report.

We are self-insured for certain costs associated with our operations, and insurance and claims expenses could have a material
We are self-insured for certain costs associated with our operations, and insurance and claims expenses could have a material
adverse effect on us. We are self-insured up to certain limits that vary by type of risk for costs associated with workers’ compensation
adverse effect on us. We are self-insured up to certain limits that vary by type of risk for costs associated with workers’ compensation
claims, vehicle accidents, property and cargo loss, general business liabilities and benefits paid under employee healthcare and
claims, vehicle accidents, property and cargo loss, general business liabilities and benefits paid under employee healthcare and
disability programs. Our reserves are established for estimates of loss on all incurred claims, including incurred-but-not-reported
disability programs. Our reserves are established for estimates of loss on all incurred claims, including incurred-but-not-reported
claims. Our self-insurance accruals are primarily based on estimated costs determined by actuarial methods. Estimated costs include
claims. Our self-insurance accruals are primarily based on estimated costs determined by actuarial methods. Estimated costs include
consideration of a variety of factors and related assumptions such as the severity of claims, frequency and volume of claims,
consideration of a variety of factors and related assumptions such as the severity of claims, frequency and volume of claims,
healthcare inflation, seasonality and plan designs, which may be subject to a high degree of variability. However, the use of any
healthcare inflation, seasonality and plan designs, which may be subject to a high degree of variability. However, the use of any
estimation technique in this area is inherently sensitive. Material increases in the magnitude of claims, changes to healthcare costs,
estimation technique in this area is inherently sensitive. Material increases in the magnitude of claims, changes to healthcare costs,
accident frequency and severity, insurance retention levels, judgment and settlement amounts, associated legal expenses and other
accident frequency and severity, insurance retention levels, judgment and settlement amounts, associated legal expenses and other
factors could result in unfavorable differences between actual self-insurance costs and our reserve estimates. As a result, our insurance
factors could result in unfavorable differences between actual self-insurance costs and our reserve estimates. As a result, our insurance
and claims costs could increase materially which could adversely affect our results of operations and financial condition. During 2021,
and claims costs could increase materially which could adversely affect our results of operations and financial condition. During 2021,
higher self-insurance accruals at FedEx Ground negatively impacted our results of operations. See “Item 7. Management’s Discussion
higher self-insurance accruals at FedEx Ground negatively impacted our results of operations. See “Item 7. Management’s Discussion
and Analysis of Results of Operations and Financial Condition” of this Annual Report for more information.
and Analysis of Results of Operations and Financial Condition” of this Annual Report for more information.

As a supplement to our self-insurance program, we maintain coverage with excess insurance carriers for potential losses that exceed
As a supplement to our self-insurance program, we maintain coverage with excess insurance carriers for potential losses that exceed
the amounts we self-insure. Periodically, we evaluate the level of insurance coverage and adjust insurance levels based on risk
the amounts we self-insure. Periodically, we evaluate the level of insurance coverage and adjust insurance levels based on risk
tolerance, risk volatility and premium expense. Although we believe our aggregate insurance limits should be sufficient to cover our
tolerance, risk volatility and premium expense. Although we believe our aggregate insurance limits should be sufficient to cover our
historic claims amounts, the commercial trucking industry has experienced a wave of blockbuster or so-called “nuclear” verdicts,
historic claims amounts, the commercial trucking industry has experienced a wave of blockbuster or so-called “nuclear” verdicts,
including some instances in which juries have awarded hundreds of millions of dollars to those injured in accidents and their families.
including some instances in which juries have awarded hundreds of millions of dollars to those injured in accidents and their families.
Given this recent trend, it is possible that one or more claims could exceed our aggregate coverage limits. If any claim were to exceed
Given this recent trend, it is possible that one or more claims could exceed our aggregate coverage limits. If any claim were to exceed
our aggregate insurance coverage, we would bear the excess in addition to our other self-insured amounts.
our aggregate insurance coverage, we would bear the excess in addition to our other self-insured amounts.

Given the current claims environment, the amount of coverage available from excess insurance carriers is decreasing and the
Given the current claims environment, the amount of coverage available from excess insurance carriers is decreasing and the
premiums for this excess coverage are increasing significantly. Accordingly, our excess insurance and claims expenses may increase,
premiums for this excess coverage are increasing significantly. Accordingly, our excess insurance and claims expenses may increase,
or we could increase our self-insured retention as policies are renewed or replaced. Our results of operations and financial condition
or we could increase our self-insured retention as policies are renewed or replaced. Our results of operations and financial condition
could be adversely affected if our costs or losses significantly exceed our aggregate coverage limits, we are unable to obtain excess
could be adversely affected if our costs or losses significantly exceed our aggregate coverage limits, we are unable to obtain excess
insurance coverage in amounts we deem sufficient, our insurance carriers fail to pay on our insurance claims, or we experience a claim
insurance coverage in amounts we deem sufficient, our insurance carriers fail to pay on our insurance claims, or we experience a claim
for which coverage is not provided.
for which coverage is not provided.

The transportation infrastructure continues to be a target of terrorist activities. Because transportation assets continue to be a target

of terrorist activities, governments around the world are adopting or are considering adopting stricter security requirements that will

increase operating costs and potentially slow service for businesses, including those in the transportation industry. These security

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. For example, the TSA requires FedEx Express to comply with a

Full All-Cargo Aircraft Operator Standard Security Plan, which contains evolving and strict security requirements. Additionally, the

ICAO’s standard that previously allowed a member state to permit carriers and other entities to determine, without government

oversight, which shippers and shipments are secure for purposes of putting those shipments on all-cargo aircraft was modified

effective July 1, 2021. As a result, we are now required to undertake additional security measures for international outbound

shipments. It is reasonably possible that these rules or other future security requirements could impose material costs on us or slow our

service to our customers. The impact on our operations of avoiding areas of the world, including airspace, in which there are

geopolitical conflicts and the targeting of aircraft by parties to those conflicts can also be significant. Moreover, a terrorist attack

directed at FedEx or other aspects of the transportation infrastructure could disrupt our operations and adversely impact demand for

our services.

Strategic Risks

Failure to successfully implement our business strategy and effectively respond to changes in market dynamics and customer

preferences will cause our future financial results to suffer. We are making significant investments and other decisions in

connection with our long-term business strategy, such as investments in aircraft fleet modernization, strategic investments to increase

capacity and improve productivity and safety, and the FedEx Express Indianapolis and Memphis hub modernization and expansion

programs. Additionally, we are executing initiatives to use data to transform the digital and physical experiences of our customers and

team members, as well as to transform and optimize the FedEx Express international business, particularly in Europe. See “Item 1.

Business” and “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual

Report for additional information.

Such initiatives and enhancements may require us to make significant capital expenditures. We have also incurred, and may continue

to incur, increased operating expenses in connection with certain changes to our business strategy. We may not be able to derive the

expected value from our strategic investments and other decisions. For example, in 2021 we announced proposals to resize our

European workforce as FedEx Express nears the completion of the network integration of TNT Express, including through

consultations with works council representatives from across the region. The actual amount and timing of cost savings resulting from

the workforce reduction plan are dependent on local country consultation processes and regulations and negotiated social plans may

differ from our current expectations and estimates. If we are not able to successfully implement this plan, our future financial results

may suffer.

Changes in our business strategy may also expose us to new and heightened risks. For example, ShopRunner, which we acquired in

December 2020, collects and stores certain personal data of its merchants and their buyers, its partners, consumers with whom it has a

direct relationship and users of its applications. Additionally, it uses third-party service providers and subprocessors to help deliver

services to merchants and their buyers. These service providers and subprocessors may store or access personal data, including

payment information and/or other confidential information. The foregoing factors increase the risk of data incidents and the amount of

potential exposure in the event of a data breach. Developing privacy legislation within the U.S. may also create limitations or added

requirements on the use of personal data within and among FedEx Dataworks, ShopRunner and the other FedEx operating companies.

Further, in developing our business strategy, we make certain assumptions including, but not limited to, those related to customer

demand and the mix of services to be purchased by our customers, the future rate of e-commerce growth, competition and the global

economy, and actual market, economic and other conditions may be different from our assumptions. As technology, customer

behavior and market conditions continue to evolve, it is important that we maintain the relevance of our brand and service offerings to

our customers. If we are not able to successfully implement our business strategy and effectively respond to changes in market

dynamics and customer preferences, our future financial results will suffer. For additional discussion, see “Item 1. Business” of this

Annual Report under the caption “Strategy.”

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We have also incurred increased operating expenses related to personal protective equipment and medical/safety supplies, as well as

additional security and cleaning services, in order to protect our team members and customers. Due to the size, scope and

geographically dispersed nature of our operations, the expenses we incur to protect the health and safety of certain of our employees

may be higher than similar expenses incurred by companies in other industries.

Additionally, a significant number of our employees as well as customers and others with whom we do business continue to work

remotely in response to the COVID-19 pandemic. Our business operations may be disrupted, and we may experience increased risk of

adverse effects on our business, if a significant portion of our workforce or certain business operations are negatively impacted as a

result of remote work arrangements, including due to cyber risks or other disruption to our technology infrastructure.

The continuing impact of the COVID-19 pandemic, including the extent of its effect on our business, results of operations and

financial condition as well as the global economy, will be dictated by future developments that remain uncertain and cannot be

predicted, such as its duration and spread, the success of efforts to contain it and treat its impact, the possibility of additional

subsequent widespread outbreaks and variant strains and the impact of actions taken in response, resulting effects on the economic

conditions in the global markets in which we operate, the future rate of e-commerce growth and the timeline for recovery of passenger

airline cargo capacity. Certain financial and operating metrics that we reported for 2021 may not be indicative of results for future

periods once the impact of the COVID-19 pandemic subsides.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening

many other risks described in this section, any of which could materially and adversely affect our business, results of operations and

financial condition. Such risks include, but are not limited to, additional changes in the state of the global economy and international

trade policies and relations; our ability to implement our business strategy and effectively respond to changes in market dynamics and

customer preferences; our strong reputation and the value of the FedEx brand; our ability to meet our labor and purchased

transportation needs while controlling related costs; our ability to execute and effectively operate, integrate, leverage, and grow

acquired businesses; changes in the business and financial soundness of the USPS; our ability to achieve our goal of carbon neutrality

for our global operations by calendar 2040; and the impact of litigation or claims from customers, team members, suppliers, regulators

or other third parties relating to the COVID-19 pandemic or our actions in response to the pandemic.

For more information about the COVID-19 pandemic and its effect on our business, results of operations and financial condition, see

“Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition—Results of Operations and

Outlook—Consolidated Results—Impact of the COVID-19 Pandemic” of this Annual Report.

We are self-insured for certain costs associated with our operations, and insurance and claims expenses could have a material

adverse effect on us. We are self-insured up to certain limits that vary by type of risk for costs associated with workers’ compensation

claims, vehicle accidents, property and cargo loss, general business liabilities and benefits paid under employee healthcare and

disability programs. Our reserves are established for estimates of loss on all incurred claims, including incurred-but-not-reported

claims. Our self-insurance accruals are primarily based on estimated costs determined by actuarial methods. Estimated costs include

consideration of a variety of factors and related assumptions such as the severity of claims, frequency and volume of claims,

healthcare inflation, seasonality and plan designs, which may be subject to a high degree of variability. However, the use of any

estimation technique in this area is inherently sensitive. Material increases in the magnitude of claims, changes to healthcare costs,

accident frequency and severity, insurance retention levels, judgment and settlement amounts, associated legal expenses and other

factors could result in unfavorable differences between actual self-insurance costs and our reserve estimates. As a result, our insurance

and claims costs could increase materially which could adversely affect our results of operations and financial condition. During 2021,

higher self-insurance accruals at FedEx Ground negatively impacted our results of operations. See “Item 7. Management’s Discussion

and Analysis of Results of Operations and Financial Condition” of this Annual Report for more information.

As a supplement to our self-insurance program, we maintain coverage with excess insurance carriers for potential losses that exceed

the amounts we self-insure. Periodically, we evaluate the level of insurance coverage and adjust insurance levels based on risk

tolerance, risk volatility and premium expense. Although we believe our aggregate insurance limits should be sufficient to cover our

historic claims amounts, the commercial trucking industry has experienced a wave of blockbuster or so-called “nuclear” verdicts,

including some instances in which juries have awarded hundreds of millions of dollars to those injured in accidents and their families.

Given this recent trend, it is possible that one or more claims could exceed our aggregate coverage limits. If any claim were to exceed

our aggregate insurance coverage, we would bear the excess in addition to our other self-insured amounts.

Given the current claims environment, the amount of coverage available from excess insurance carriers is decreasing and the

premiums for this excess coverage are increasing significantly. Accordingly, our excess insurance and claims expenses may increase,

or we could increase our self-insured retention as policies are renewed or replaced. Our results of operations and financial condition

could be adversely affected if our costs or losses significantly exceed our aggregate coverage limits, we are unable to obtain excess

insurance coverage in amounts we deem sufficient, our insurance carriers fail to pay on our insurance claims, or we experience a claim

for which coverage is not provided.

The transportation infrastructure continues to be a target of terrorist activities. Because transportation assets continue to be a target
The transportation infrastructure continues to be a target of terrorist activities. Because transportation assets continue to be a target
of terrorist activities, governments around the world are adopting or are considering adopting stricter security requirements that will
of terrorist activities, governments around the world are adopting or are considering adopting stricter security requirements that will
increase operating costs and potentially slow service for businesses, including those in the transportation industry. These security
increase operating costs and potentially slow service for businesses, including those in the transportation industry. These security
requirements are not static, but change periodically as the result of regulatory and legislative requirements, imposing additional
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. For example, the TSA requires FedEx Express to comply with a
security costs and creating a level of uncertainty for our operations. For example, the TSA requires FedEx Express to comply with a
Full All-Cargo Aircraft Operator Standard Security Plan, which contains evolving and strict security requirements. Additionally, the
Full All-Cargo Aircraft Operator Standard Security Plan, which contains evolving and strict security requirements. Additionally, the
ICAO’s standard that previously allowed a member state to permit carriers and other entities to determine, without government
ICAO’s standard that previously allowed a member state to permit carriers and other entities to determine, without government
oversight, which shippers and shipments are secure for purposes of putting those shipments on all-cargo aircraft was modified
oversight, which shippers and shipments are secure for purposes of putting those shipments on all-cargo aircraft was modified
effective July 1, 2021. As a result, we are now required to undertake additional security measures for international outbound
effective July 1, 2021. As a result, we are now required to undertake additional security measures for international outbound
shipments. It is reasonably possible that these rules or other future security requirements could impose material costs on us or slow our
shipments. It is reasonably possible that these rules or other future security requirements could impose material costs on us or slow our
service to our customers. The impact on our operations of avoiding areas of the world, including airspace, in which there are
service to our customers. The impact on our operations of avoiding areas of the world, including airspace, in which there are
geopolitical conflicts and the targeting of aircraft by parties to those conflicts can also be significant. Moreover, a terrorist attack
geopolitical conflicts and the targeting of aircraft by parties to those conflicts can also be significant. Moreover, a terrorist attack
directed at FedEx or other aspects of the transportation infrastructure could disrupt our operations and adversely impact demand for
directed at FedEx or other aspects of the transportation infrastructure could disrupt our operations and adversely impact demand for
our services.
our services.

Strategic Risks
Strategic Risks

Failure to successfully implement our business strategy and effectively respond to changes in market dynamics and customer
Failure to successfully implement our business strategy and effectively respond to changes in market dynamics and customer
preferences will cause our future financial results to suffer. We are making significant investments and other decisions in
preferences will cause our future financial results to suffer. We are making significant investments and other decisions in
connection with our long-term business strategy, such as investments in aircraft fleet modernization, strategic investments to increase
connection with our long-term business strategy, such as investments in aircraft fleet modernization, strategic investments to increase
capacity and improve productivity and safety, and the FedEx Express Indianapolis and Memphis hub modernization and expansion
capacity and improve productivity and safety, and the FedEx Express Indianapolis and Memphis hub modernization and expansion
programs. Additionally, we are executing initiatives to use data to transform the digital and physical experiences of our customers and
programs. Additionally, we are executing initiatives to use data to transform the digital and physical experiences of our customers and
team members, as well as to transform and optimize the FedEx Express international business, particularly in Europe. See “Item 1.
team members, as well as to transform and optimize the FedEx Express international business, particularly in Europe. See “Item 1.
Business” and “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual
Business” and “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” of this Annual
Report for additional information.
Report for additional information.

Such initiatives and enhancements may require us to make significant capital expenditures. We have also incurred, and may continue
Such initiatives and enhancements may require us to make significant capital expenditures. We have also incurred, and may continue
to incur, increased operating expenses in connection with certain changes to our business strategy. We may not be able to derive the
to incur, increased operating expenses in connection with certain changes to our business strategy. We may not be able to derive the
expected value from our strategic investments and other decisions. For example, in 2021 we announced proposals to resize our
expected value from our strategic investments and other decisions. For example, in 2021 we announced proposals to resize our
European workforce as FedEx Express nears the completion of the network integration of TNT Express, including through
European workforce as FedEx Express nears the completion of the network integration of TNT Express, including through
consultations with works council representatives from across the region. The actual amount and timing of cost savings resulting from
consultations with works council representatives from across the region. The actual amount and timing of cost savings resulting from
the workforce reduction plan are dependent on local country consultation processes and regulations and negotiated social plans may
the workforce reduction plan are dependent on local country consultation processes and regulations and negotiated social plans may
differ from our current expectations and estimates. If we are not able to successfully implement this plan, our future financial results
differ from our current expectations and estimates. If we are not able to successfully implement this plan, our future financial results
may suffer.
may suffer.

Changes in our business strategy may also expose us to new and heightened risks. For example, ShopRunner, which we acquired in
Changes in our business strategy may also expose us to new and heightened risks. For example, ShopRunner, which we acquired in
December 2020, collects and stores certain personal data of its merchants and their buyers, its partners, consumers with whom it has a
December 2020, collects and stores certain personal data of its merchants and their buyers, its partners, consumers with whom it has a
direct relationship and users of its applications. Additionally, it uses third-party service providers and subprocessors to help deliver
direct relationship and users of its applications. Additionally, it uses third-party service providers and subprocessors to help deliver
services to merchants and their buyers. These service providers and subprocessors may store or access personal data, including
services to merchants and their buyers. These service providers and subprocessors may store or access personal data, including
payment information and/or other confidential information. The foregoing factors increase the risk of data incidents and the amount of
payment information and/or other confidential information. The foregoing factors increase the risk of data incidents and the amount of
potential exposure in the event of a data breach. Developing privacy legislation within the U.S. may also create limitations or added
potential exposure in the event of a data breach. Developing privacy legislation within the U.S. may also create limitations or added
requirements on the use of personal data within and among FedEx Dataworks, ShopRunner and the other FedEx operating companies.
requirements on the use of personal data within and among FedEx Dataworks, ShopRunner and the other FedEx operating companies.

Further, in developing our business strategy, we make certain assumptions including, but not limited to, those related to customer
Further, in developing our business strategy, we make certain assumptions including, but not limited to, those related to customer
demand and the mix of services to be purchased by our customers, the future rate of e-commerce growth, competition and the global
demand and the mix of services to be purchased by our customers, the future rate of e-commerce growth, competition and the global
economy, and actual market, economic and other conditions may be different from our assumptions. As technology, customer
economy, and actual market, economic and other conditions may be different from our assumptions. As technology, customer
behavior and market conditions continue to evolve, it is important that we maintain the relevance of our brand and service offerings to
behavior and market conditions continue to evolve, it is important that we maintain the relevance of our brand and service offerings to
our customers. If we are not able to successfully implement our business strategy and effectively respond to changes in market
our customers. If we are not able to successfully implement our business strategy and effectively respond to changes in market
dynamics and customer preferences, our future financial results will suffer. For additional discussion, see “Item 1. Business” of this
dynamics and customer preferences, our future financial results will suffer. For additional discussion, see “Item 1. Business” of this
Annual Report under the caption “Strategy.”
Annual Report under the caption “Strategy.”

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Our businesses depend on our strong reputation and the value of the FedEx brand. The FedEx brand name symbolizes high-quality
Our businesses depend on our strong reputation and the value of the FedEx brand. The FedEx brand name symbolizes high-quality
service, reliability and speed. FedEx is one of the most widely recognized, trusted and respected brands in the world, and the FedEx
service, reliability and speed. FedEx is one of the most widely recognized, trusted and respected brands in the world, and the FedEx
brand is one of our most important and valuable assets. In addition, we have a strong reputation among customers and the general
brand is one of our most important and valuable assets. In addition, we have a strong reputation among customers and the general
public for high standards of social and environmental responsibility and corporate governance and ethics. The FedEx brand name and
public for high standards of social and environmental responsibility and corporate governance and ethics. The FedEx brand name and
our corporate reputation are powerful sales and marketing tools, and we devote significant resources to promoting and protecting
our corporate reputation are powerful sales and marketing tools, and we devote significant resources to promoting and protecting
them. Adverse publicity (whether or not justified) relating to activities by our team members or others with whom we do business,
them. Adverse publicity (whether or not justified) relating to activities by our team members or others with whom we do business,
such as customer service mishaps, accidents, catastrophes or incidents involving aircraft, vehicles or facilities operated by us; low
such as customer service mishaps, accidents, catastrophes or incidents involving aircraft, vehicles or facilities operated by us; low
service or safety levels; data breaches or technology infrastructure disruptions; noncompliance with laws; the shipment of certain
service or safety levels; data breaches or technology infrastructure disruptions; noncompliance with laws; the shipment of certain
items pursuant to our obligation as a common carrier operating under federal law; or our advertising campaigns, sponsorship
items pursuant to our obligation as a common carrier operating under federal law; or our advertising campaigns, sponsorship
arrangements or marketing programs, could tarnish our reputation and reduce the value of our brand. With the increase in the use of
arrangements or marketing programs, could tarnish our reputation and reduce the value of our brand. With the increase in the use of
social media outlets such as Facebook, YouTube, Instagram, Twitter and TikTok, adverse publicity can be disseminated quickly and
social media outlets such as Facebook, YouTube, Instagram, Twitter and TikTok, adverse publicity can be disseminated quickly and
broadly without context, making it increasingly difficult for us to effectively respond. Further, our actual or perceived position or lack
broadly without context, making it increasingly difficult for us to effectively respond. Further, our actual or perceived position or lack
of position on social, environmental, political, public policy or other sensitive issues, and any perceived lack of transparency about
of position on social, environmental, political, public policy or other sensitive issues, and any perceived lack of transparency about
those matters, could harm our reputation with certain groups. Damage to our reputation and loss of brand equity could reduce demand
those matters, could harm our reputation with certain groups. Damage to our reputation and loss of brand equity could reduce demand
for our services and thus have an adverse effect on our financial condition, liquidity and results of operations, as well as require
for our services and thus have an adverse effect on our financial condition, liquidity and results of operations, as well as require
additional resources to rebuild our reputation and restore the value of our brand.
additional resources to rebuild our reputation and restore the value of our brand.

Changes in the business or financial soundness of the USPS could have an adverse effect on our results of operations and
Changes in the business or financial soundness of the USPS could have an adverse effect on our results of operations and
financial condition. The USPS is the largest customer of FedEx Express, which provides domestic air transportation services for the
financial condition. The USPS is the largest customer of FedEx Express, which provides domestic air transportation services for the
USPS’s First Class Mail, Priority Mail Express and Priority Mail and transportation and delivery for the USPS’s international delivery
USPS’s First Class Mail, Priority Mail Express and Priority Mail and transportation and delivery for the USPS’s international delivery
service. The COVID-19 pandemic has negatively impacted the USPS. Additionally, the USPS continues to experience budgetary
service. The COVID-19 pandemic has negatively impacted the USPS. Additionally, the USPS continues to experience budgetary
uncertainty as well as increased political debate regarding potential privatization or restructuring of its operations. The USPS is
uncertainty as well as increased political debate regarding potential privatization or restructuring of its operations. The USPS is
currently implementing strategic changes to its operations to reduce its reliance on the air networks of FedEx Express and other
currently implementing strategic changes to its operations to reduce its reliance on the air networks of FedEx Express and other
transportation providers. These or additional difficulties or changes in the USPS’s business, including its ability to access capital, any
transportation providers. These or additional difficulties or changes in the USPS’s business, including its ability to access capital, any
structural changes to its operations, network, volume levels, service offerings, service commitments or pricing, could negatively
structural changes to its operations, network, volume levels, service offerings, service commitments or pricing, could negatively
impact our revenue, results of operations and financial condition. Further, a decision by the USPS to terminate early or not renew its
impact our revenue, results of operations and financial condition. Further, a decision by the USPS to terminate early or not renew its
contract with FedEx Express for domestic services, which expires in September 2024, would negatively impact our profitability.
contract with FedEx Express for domestic services, which expires in September 2024, would negatively impact our profitability.

Our businesses are capital intensive, and we must make capital decisions based upon projected volume levels. We make significant
Our businesses are capital intensive, and we must make capital decisions based upon projected volume levels. We make significant
investments in aircraft, package handling facilities, vehicles, technology, sort equipment and other assets to support our transportation
investments in aircraft, package handling facilities, vehicles, technology, sort equipment and other assets to support our transportation
and business networks. We also make significant investments to rebrand, integrate and grow the companies that we acquire. The
and business networks. We also make significant investments to rebrand, integrate and grow the companies that we acquire. The
amount and timing of capital investments depend on various factors, including our anticipated volume growth. We must make
amount and timing of capital investments depend on various factors, including our anticipated volume growth. We must make
commitments to purchase or modify aircraft years before the aircraft are actually needed. We must predict volume levels and fleet
commitments to purchase or modify aircraft years before the aircraft are actually needed. We must predict volume levels and fleet
requirements and make commitments for aircraft based on those projections. Missing our projections could result in too much or too
requirements and make commitments for aircraft based on those projections. Missing our projections could result in too much or too
little capacity relative to our shipping volumes. Overcapacity could lead to below-market asset dispositions or write-downs, as well as
little capacity relative to our shipping volumes. Overcapacity could lead to below-market asset dispositions or write-downs, as well as
negatively impact operating margins, and undercapacity could negatively impact service levels.
negatively impact operating margins, and undercapacity could negatively impact service levels.

We face intense competition. The transportation and business services markets are both highly competitive and sensitive to price and
We face intense competition. The transportation and business services markets are both highly competitive and sensitive to price and
service, especially in periods of little or no macroeconomic growth. Some of our competitors have more financial resources and
service, especially in periods of little or no macroeconomic growth. Some of our competitors have more financial resources and
competitive advantages than we do, appear willing to operate at little or no margin to gain market share, or they are owned, controlled
competitive advantages than we do, appear willing to operate at little or no margin to gain market share, or they are owned, controlled
or subsidized by foreign governments, which enables them to raise capital more easily. We also compete with regional transportation
or subsidized by foreign governments, which enables them to raise capital more easily. We also compete with regional transportation
providers that operate smaller and less capital-intensive transportation networks and startup companies that combine technology with
providers that operate smaller and less capital-intensive transportation networks and startup companies that combine technology with
crowdsourcing to focus on local market needs. In addition, some high-volume package shippers are developing and implementing in-
crowdsourcing to focus on local market needs. In addition, some high-volume package shippers are developing and implementing in-
house delivery capabilities and utilizing independent contractors for deliveries, which could in turn reduce our revenues and market
house delivery capabilities and utilizing independent contractors for deliveries, which could in turn reduce our revenues and market
share. For example, Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles.
share. For example, Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles.

We believe we compete effectively with these companies — for example, by providing more reliable service at compensatory prices.
We believe we compete effectively with these companies — for example, by providing more reliable service at compensatory prices.
However, the existence of an irrational pricing environment could limit our ability not only to maintain or increase our prices
However, the existence of an irrational pricing environment could limit our ability not only to maintain or increase our prices
(including our fuel surcharges in response to rising fuel costs), but also to maintain or grow our revenues and market share. While we
(including our fuel surcharges in response to rising fuel costs), but also to maintain or grow our revenues and market share. While we
believe we compete effectively through our current and planned service offerings, if our current competitors or potential future
believe we compete effectively through our current and planned service offerings, if our current competitors or potential future
competitors offer a broader range of services, more effectively bundle their services, or offer services at lower prices, it could impede
competitors offer a broader range of services, more effectively bundle their services, or offer services at lower prices, it could impede
our ability to maintain or grow our market share. Continued transportation industry consolidation may further increase competition.
our ability to maintain or grow our market share. Continued transportation industry consolidation may further increase competition.
Moreover, if high-volume package shippers further develop or expand internal capabilities for the services we provide, it may reduce
Moreover, if high-volume package shippers further develop or expand internal capabilities for the services we provide, it may reduce
our revenue and could negatively impact our financial condition and results of operations. These impacts could be exacerbated if high-
our revenue and could negatively impact our financial condition and results of operations. These impacts could be exacerbated if high-
volume package shippers attempt to offer such capabilities to third parties. News regarding such developments or expansions could
volume package shippers attempt to offer such capabilities to third parties. News regarding such developments or expansions could
also negatively impact the price of our common stock.
also negatively impact the price of our common stock.

Additionally, advancements in technology, such as advanced safety systems; automated package sorting, handling and delivery;

autonomous delivery; vehicle platooning; alternative fuel vehicles; and digitization of freight services, may necessitate that we

increase investments in order to remain competitive, and our customers may not be willing to accept higher rates to cover the cost of

these investments.

Our inability to execute and effectively operate, integrate, leverage and grow acquired businesses and realize the anticipated

benefits of acquisitions, joint ventures or strategic alliances could materially adversely affect us. Our strategy for long-term growth,

productivity and profitability depends in part on our ability to make prudent strategic acquisitions, form joint ventures or strategic

alliances and realize the expected benefits from these transactions. We have acquired businesses in Europe, Latin America, Africa, the

U.S., Asia and Australia over the past several years, including TNT Express. Expected TNT Express integration costs have increased

significantly since the acquisition was completed in 2016, and parts of the integration have taken longer than initially expected. In

order to fully leverage the capabilities that TNT Express adds to our portfolio, we must complete the final phase of FedEx Express and

TNT Express international air network interoperability.

Acquisitions and other strategic transactions involve special accounting, regulatory, compliance, information technology, human

resources, cultural and other risks. Additionally, we may be required to make significant capital expenditures and/or incur certain

operating expenses following the completion of certain transactions, which may be higher than initially expected. For example,

existing and future customer data in the systems and business of FedEx and ShopRunner, which we acquired in December 2020, may

not be immediately interoperable, or may not be interoperable without significant added expense.

While we expect our past and future acquisitions and strategic transactions to enhance our value proposition to customers and improve

our business and long-term profitability, there can be no assurance that we will realize our expectations within the time frame we have

established, if at all, or that we can continue to support the value we allocate to acquired businesses, including their goodwill or other

intangible assets. In 2020 we incurred goodwill impairment charges of $358 million related to FedEx Office and FedEx Supply Chain,

eliminating all of the goodwill attributable to these reporting units. For additional information, see “Item 7. Management’s Discussion

and Analysis of Results of Operations and Financial Condition—Results of Operations and Outlook—Consolidated Results—

Goodwill and Other Asset Impairment Charges” of this Annual Report.

Our autonomous delivery strategy is dependent upon our ability to successfully mitigate unique technological, operational and

regulatory risks. As discussed further in “Item 1. Business” under “FedEx Services Segment—Customer Driven Technology—

Autonomous Delivery Technology,” we are exploring the use of autonomous delivery technologies within our operations.

Autonomous delivery is a new and evolving market, which makes it difficult to predict its acceptance, growth, the magnitude and

timing of necessary investments and other trends. This aspect of our business strategy is subject to a variety of risks inherent with the

development of new technologies, including: the ability to continue to develop autonomous delivery software and hardware; access to

sufficient capital; our ability to develop and maintain necessary partnerships; risks related to the manufacture of autonomous devices;

and significant competition from other companies, some of which may have more resources and capital to devote to autonomous

delivery technologies than we do.

In addition, we face risks related to the commercial deployment of autonomous delivery devices on our targeted timeline or at all,

including consumer acceptance, achievement of adequate safety and other performance standards and compliance with uncertain,

evolving and potentially conflicting federal and state regulations. To the extent accidents, cybersecurity breaches or other adverse

events associated with our autonomous delivery devices occur, we could be subject to liability, government scrutiny, further regulation

and reputational damage. Any of the foregoing could adversely impact our results of operations, financial condition and growth

prospects.

Human Resource Management Risks

Our failure to retain or attract employee talent or maintain our company culture, as well as increases in labor and purchased

transportation costs, could adversely impact our business and results of operations. Our success depends upon the efforts and

abilities of our high-quality employees, many of whom are longstanding FedEx team members. Difficulties in motivating, rewarding,

retaining and recruiting employee talent, including successors to members of senior management, or the unexpected loss of such

individuals resulting in the depletion of our institutional knowledge base, could have an adverse impact on our business, results of

operations, reputation and the price of our common stock. Certain positions at FedEx have historically experienced high turnover

rates, which can lead to increased recruiting, training and retention costs. Additionally, our company culture is important to providing

high-quality customer service and having a productive workforce and could be adversely affected by our growing operations and other

factors. If we fail to maintain the strength of our company culture, our competitive ability and our business may be harmed.

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Our businesses depend on our strong reputation and the value of the FedEx brand. The FedEx brand name symbolizes high-quality

service, reliability and speed. FedEx is one of the most widely recognized, trusted and respected brands in the world, and the FedEx

brand is one of our most important and valuable assets. In addition, we have a strong reputation among customers and the general

public for high standards of social and environmental responsibility and corporate governance and ethics. The FedEx brand name and

our corporate reputation are powerful sales and marketing tools, and we devote significant resources to promoting and protecting

them. Adverse publicity (whether or not justified) relating to activities by our team members or others with whom we do business,

such as customer service mishaps, accidents, catastrophes or incidents involving aircraft, vehicles or facilities operated by us; low

service or safety levels; data breaches or technology infrastructure disruptions; noncompliance with laws; the shipment of certain

items pursuant to our obligation as a common carrier operating under federal law; or our advertising campaigns, sponsorship

arrangements or marketing programs, could tarnish our reputation and reduce the value of our brand. With the increase in the use of

social media outlets such as Facebook, YouTube, Instagram, Twitter and TikTok, adverse publicity can be disseminated quickly and

broadly without context, making it increasingly difficult for us to effectively respond. Further, our actual or perceived position or lack

of position on social, environmental, political, public policy or other sensitive issues, and any perceived lack of transparency about

those matters, could harm our reputation with certain groups. Damage to our reputation and loss of brand equity could reduce demand

for our services and thus have an adverse effect on our financial condition, liquidity and results of operations, as well as require

additional resources to rebuild our reputation and restore the value of our brand.

Changes in the business or financial soundness of the USPS could have an adverse effect on our results of operations and

financial condition. The USPS is the largest customer of FedEx Express, which provides domestic air transportation services for the

USPS’s First Class Mail, Priority Mail Express and Priority Mail and transportation and delivery for the USPS’s international delivery

service. The COVID-19 pandemic has negatively impacted the USPS. Additionally, the USPS continues to experience budgetary

uncertainty as well as increased political debate regarding potential privatization or restructuring of its operations. The USPS is

currently implementing strategic changes to its operations to reduce its reliance on the air networks of FedEx Express and other

transportation providers. These or additional difficulties or changes in the USPS’s business, including its ability to access capital, any

structural changes to its operations, network, volume levels, service offerings, service commitments or pricing, could negatively

impact our revenue, results of operations and financial condition. Further, a decision by the USPS to terminate early or not renew its

contract with FedEx Express for domestic services, which expires in September 2024, would negatively impact our profitability.

Our businesses are capital intensive, and we must make capital decisions based upon projected volume levels. We make significant

investments in aircraft, package handling facilities, vehicles, technology, sort equipment and other assets to support our transportation

and business networks. We also make significant investments to rebrand, integrate and grow the companies that we acquire. The

amount and timing of capital investments depend on various factors, including our anticipated volume growth. We must make

commitments to purchase or modify aircraft years before the aircraft are actually needed. We must predict volume levels and fleet

requirements and make commitments for aircraft based on those projections. Missing our projections could result in too much or too

little capacity relative to our shipping volumes. Overcapacity could lead to below-market asset dispositions or write-downs, as well as

negatively impact operating margins, and undercapacity could negatively impact service levels.

We face intense competition. The transportation and business services markets are both highly competitive and sensitive to price and

service, especially in periods of little or no macroeconomic growth. Some of our competitors have more financial resources and

competitive advantages than we do, appear willing to operate at little or no margin to gain market share, or they are owned, controlled

or subsidized by foreign governments, which enables them to raise capital more easily. We also compete with regional transportation

providers that operate smaller and less capital-intensive transportation networks and startup companies that combine technology with

crowdsourcing to focus on local market needs. In addition, some high-volume package shippers are developing and implementing in-

house delivery capabilities and utilizing independent contractors for deliveries, which could in turn reduce our revenues and market

share. For example, Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles.

We believe we compete effectively with these companies — for example, by providing more reliable service at compensatory prices.

However, the existence of an irrational pricing environment could limit our ability not only to maintain or increase our prices

(including our fuel surcharges in response to rising fuel costs), but also to maintain or grow our revenues and market share. While we

believe we compete effectively through our current and planned service offerings, if our current competitors or potential future

competitors offer a broader range of services, more effectively bundle their services, or offer services at lower prices, it could impede

our ability to maintain or grow our market share. Continued transportation industry consolidation may further increase competition.

Moreover, if high-volume package shippers further develop or expand internal capabilities for the services we provide, it may reduce

our revenue and could negatively impact our financial condition and results of operations. These impacts could be exacerbated if high-

volume package shippers attempt to offer such capabilities to third parties. News regarding such developments or expansions could

also negatively impact the price of our common stock.

Additionally, advancements in technology, such as advanced safety systems; automated package sorting, handling and delivery;
Additionally, advancements in technology, such as advanced safety systems; automated package sorting, handling and delivery;
autonomous delivery; vehicle platooning; alternative fuel vehicles; and digitization of freight services, may necessitate that we
autonomous delivery; vehicle platooning; alternative fuel vehicles; and digitization of freight services, may necessitate that we
increase investments in order to remain competitive, and our customers may not be willing to accept higher rates to cover the cost of
increase investments in order to remain competitive, and our customers may not be willing to accept higher rates to cover the cost of
these investments.
these investments.

Our inability to execute and effectively operate, integrate, leverage and grow acquired businesses and realize the anticipated
Our inability to execute and effectively operate, integrate, leverage and grow acquired businesses and realize the anticipated
benefits of acquisitions, joint ventures or strategic alliances could materially adversely affect us. Our strategy for long-term growth,
benefits of acquisitions, joint ventures or strategic alliances could materially adversely affect us. Our strategy for long-term growth,
productivity and profitability depends in part on our ability to make prudent strategic acquisitions, form joint ventures or strategic
productivity and profitability depends in part on our ability to make prudent strategic acquisitions, form joint ventures or strategic
alliances and realize the expected benefits from these transactions. We have acquired businesses in Europe, Latin America, Africa, the
alliances and realize the expected benefits from these transactions. We have acquired businesses in Europe, Latin America, Africa, the
U.S., Asia and Australia over the past several years, including TNT Express. Expected TNT Express integration costs have increased
U.S., Asia and Australia over the past several years, including TNT Express. Expected TNT Express integration costs have increased
significantly since the acquisition was completed in 2016, and parts of the integration have taken longer than initially expected. In
significantly since the acquisition was completed in 2016, and parts of the integration have taken longer than initially expected. In
order to fully leverage the capabilities that TNT Express adds to our portfolio, we must complete the final phase of FedEx Express and
order to fully leverage the capabilities that TNT Express adds to our portfolio, we must complete the final phase of FedEx Express and
TNT Express international air network interoperability.
TNT Express international air network interoperability.

Acquisitions and other strategic transactions involve special accounting, regulatory, compliance, information technology, human
Acquisitions and other strategic transactions involve special accounting, regulatory, compliance, information technology, human
resources, cultural and other risks. Additionally, we may be required to make significant capital expenditures and/or incur certain
resources, cultural and other risks. Additionally, we may be required to make significant capital expenditures and/or incur certain
operating expenses following the completion of certain transactions, which may be higher than initially expected. For example,
operating expenses following the completion of certain transactions, which may be higher than initially expected. For example,
existing and future customer data in the systems and business of FedEx and ShopRunner, which we acquired in December 2020, may
existing and future customer data in the systems and business of FedEx and ShopRunner, which we acquired in December 2020, may
not be immediately interoperable, or may not be interoperable without significant added expense.
not be immediately interoperable, or may not be interoperable without significant added expense.

While we expect our past and future acquisitions and strategic transactions to enhance our value proposition to customers and improve
While we expect our past and future acquisitions and strategic transactions to enhance our value proposition to customers and improve
our business and long-term profitability, there can be no assurance that we will realize our expectations within the time frame we have
our business and long-term profitability, there can be no assurance that we will realize our expectations within the time frame we have
established, if at all, or that we can continue to support the value we allocate to acquired businesses, including their goodwill or other
established, if at all, or that we can continue to support the value we allocate to acquired businesses, including their goodwill or other
intangible assets. In 2020 we incurred goodwill impairment charges of $358 million related to FedEx Office and FedEx Supply Chain,
intangible assets. In 2020 we incurred goodwill impairment charges of $358 million related to FedEx Office and FedEx Supply Chain,
eliminating all of the goodwill attributable to these reporting units. For additional information, see “Item 7. Management’s Discussion
eliminating all of the goodwill attributable to these reporting units. For additional information, see “Item 7. Management’s Discussion
and Analysis of Results of Operations and Financial Condition—Results of Operations and Outlook—Consolidated Results—
and Analysis of Results of Operations and Financial Condition—Results of Operations and Outlook—Consolidated Results—
Goodwill and Other Asset Impairment Charges” of this Annual Report.
Goodwill and Other Asset Impairment Charges” of this Annual Report.

Our autonomous delivery strategy is dependent upon our ability to successfully mitigate unique technological, operational and
Our autonomous delivery strategy is dependent upon our ability to successfully mitigate unique technological, operational and
regulatory risks. As discussed further in “Item 1. Business” under “FedEx Services Segment—Customer Driven Technology—
regulatory risks. As discussed further in “Item 1. Business” under “FedEx Services Segment—Customer Driven Technology—
Autonomous Delivery Technology,” we are exploring the use of autonomous delivery technologies within our operations.
Autonomous Delivery Technology,” we are exploring the use of autonomous delivery technologies within our operations.
Autonomous delivery is a new and evolving market, which makes it difficult to predict its acceptance, growth, the magnitude and
Autonomous delivery is a new and evolving market, which makes it difficult to predict its acceptance, growth, the magnitude and
timing of necessary investments and other trends. This aspect of our business strategy is subject to a variety of risks inherent with the
timing of necessary investments and other trends. This aspect of our business strategy is subject to a variety of risks inherent with the
development of new technologies, including: the ability to continue to develop autonomous delivery software and hardware; access to
development of new technologies, including: the ability to continue to develop autonomous delivery software and hardware; access to
sufficient capital; our ability to develop and maintain necessary partnerships; risks related to the manufacture of autonomous devices;
sufficient capital; our ability to develop and maintain necessary partnerships; risks related to the manufacture of autonomous devices;
and significant competition from other companies, some of which may have more resources and capital to devote to autonomous
and significant competition from other companies, some of which may have more resources and capital to devote to autonomous
delivery technologies than we do.
delivery technologies than we do.

In addition, we face risks related to the commercial deployment of autonomous delivery devices on our targeted timeline or at all,
In addition, we face risks related to the commercial deployment of autonomous delivery devices on our targeted timeline or at all,
including consumer acceptance, achievement of adequate safety and other performance standards and compliance with uncertain,
including consumer acceptance, achievement of adequate safety and other performance standards and compliance with uncertain,
evolving and potentially conflicting federal and state regulations. To the extent accidents, cybersecurity breaches or other adverse
evolving and potentially conflicting federal and state regulations. To the extent accidents, cybersecurity breaches or other adverse
events associated with our autonomous delivery devices occur, we could be subject to liability, government scrutiny, further regulation
events associated with our autonomous delivery devices occur, we could be subject to liability, government scrutiny, further regulation
and reputational damage. Any of the foregoing could adversely impact our results of operations, financial condition and growth
and reputational damage. Any of the foregoing could adversely impact our results of operations, financial condition and growth
prospects.
prospects.

Human Resource Management Risks
Human Resource Management Risks

Our failure to retain or attract employee talent or maintain our company culture, as well as increases in labor and purchased
Our failure to retain or attract employee talent or maintain our company culture, as well as increases in labor and purchased
transportation costs, could adversely impact our business and results of operations. Our success depends upon the efforts and
transportation costs, could adversely impact our business and results of operations. Our success depends upon the efforts and
abilities of our high-quality employees, many of whom are longstanding FedEx team members. Difficulties in motivating, rewarding,
abilities of our high-quality employees, many of whom are longstanding FedEx team members. Difficulties in motivating, rewarding,
retaining and recruiting employee talent, including successors to members of senior management, or the unexpected loss of such
retaining and recruiting employee talent, including successors to members of senior management, or the unexpected loss of such
individuals resulting in the depletion of our institutional knowledge base, could have an adverse impact on our business, results of
individuals resulting in the depletion of our institutional knowledge base, could have an adverse impact on our business, results of
operations, reputation and the price of our common stock. Certain positions at FedEx have historically experienced high turnover
operations, reputation and the price of our common stock. Certain positions at FedEx have historically experienced high turnover
rates, which can lead to increased recruiting, training and retention costs. Additionally, our company culture is important to providing
rates, which can lead to increased recruiting, training and retention costs. Additionally, our company culture is important to providing
high-quality customer service and having a productive workforce and could be adversely affected by our growing operations and other
high-quality customer service and having a productive workforce and could be adversely affected by our growing operations and other
factors. If we fail to maintain the strength of our company culture, our competitive ability and our business may be harmed.
factors. If we fail to maintain the strength of our company culture, our competitive ability and our business may be harmed.

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Our business is labor intensive in nature, and our ability to meet our labor and purchased transportation needs while controlling related
Our business is labor intensive in nature, and our ability to meet our labor and purchased transportation needs while controlling related
costs is generally subject to numerous external factors, including the availability of a sufficient number of qualified persons in the
costs is generally subject to numerous external factors, including the availability of a sufficient number of qualified persons in the
markets where we and contracted service providers operate, inflation, unemployment levels within these markets, prevailing wage
markets where we and contracted service providers operate, inflation, unemployment levels within these markets, prevailing wage
rates, behavioral changes, health and other insurance costs, safety levels of our operations, adoption of new or revised employment
rates, behavioral changes, health and other insurance costs, safety levels of our operations, adoption of new or revised employment
and labor laws and regulations (including increased minimum wage requirements) or government programs and our reputation within
and labor laws and regulations (including increased minimum wage requirements) or government programs and our reputation within
the labor market. We incurred higher costs due to labor market challenges in 2021, and we expect such conditions to continue to be
the labor market. We incurred higher costs due to labor market challenges in 2021, and we expect such conditions to continue to be
present in 2022. Additionally, we are incurring increased wage rates and costs for additional personnel in place to support our
present in 2022. Additionally, we are incurring increased wage rates and costs for additional personnel in place to support our
operations and meet regulatory requirements in response to the COVID-19 pandemic. See “Item 7. Management’s Discussion and
operations and meet regulatory requirements in response to the COVID-19 pandemic. See “Item 7. Management’s Discussion and
Analysis of Results of Operations and Financial Condition” of this Annual Report for more information. Our inability to effectively
Analysis of Results of Operations and Financial Condition” of this Annual Report for more information. Our inability to effectively
meet our labor and purchased transportation needs can hinder our ability to execute our business strategy, negatively impact service
meet our labor and purchased transportation needs can hinder our ability to execute our business strategy, negatively impact service
levels and adversely affect our business and results of operations.
levels and adversely affect our business and results of operations.

Labor organizations attempt to organize groups of our employees from time to time, and potential changes in labor laws could
Labor organizations attempt to organize groups of our employees from time to time, and potential changes in labor laws could
make it easier for them to do so. If we are unable to continue to maintain good relationships with our employees and avoid having
make it easier for them to do so. If we are unable to continue to maintain good relationships with our employees and avoid having
labor organizations organize groups of our employees, our operating costs could significantly increase and our operational flexibility
labor organizations organize groups of our employees, our operating costs could significantly increase and our operational flexibility
could be significantly reduced. Despite continual organizing attempts by labor unions, other than the pilots at FedEx Express and
could be significantly reduced. Despite continual organizing attempts by labor unions, other than the pilots at FedEx Express and
drivers at one FedEx Freight, Inc. facility, our U.S. employees have thus far chosen not to unionize (we acquired FedEx Supply Chain
drivers at one FedEx Freight, Inc. facility, our U.S. employees have thus far chosen not to unionize (we acquired FedEx Supply Chain
in 2015, which already had a small number of employees who are members of unions). Additionally, certain of FedEx Express’s non-
in 2015, which already had a small number of employees who are members of unions). Additionally, certain of FedEx Express’s non-
U.S. employees are unionized.
U.S. employees are unionized.

Our collective bargaining agreement with the ALPA, which represents the pilots of FedEx Express, is scheduled to become amendable
Our collective bargaining agreement with the ALPA, which represents the pilots of FedEx Express, is scheduled to become amendable
in November 2021. Bargaining for a successor agreement began in May 2021. While collective bargaining agreements under the RLA,
in November 2021. Bargaining for a successor agreement began in May 2021. While collective bargaining agreements under the RLA,
which covers the pilots at FedEx Express, do not expire, we may be unable to maintain certain favorable terms included in the current
which covers the pilots at FedEx Express, do not expire, we may be unable to maintain certain favorable terms included in the current
collective bargaining agreement following negotiations with the ALPA. Our inability to successfully reach new collective bargaining
collective bargaining agreement following negotiations with the ALPA. Our inability to successfully reach new collective bargaining
agreements with the ALPA and other unions representing FedEx employees could adversely affect our business and results of
agreements with the ALPA and other unions representing FedEx employees could adversely affect our business and results of
operations.
operations.

The U.S. Congress has, in the past, considered adopting changes in labor laws, however, that would make it easier for unions to
The U.S. Congress has, in the past, considered adopting changes in labor laws, however, 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 Express
organize units of our employees. For example, there is always a possibility that Congress could remove most FedEx Express
employees from the jurisdiction of the RLA. For additional discussion of the RLA, see “Item 1. Business” of this Annual Report under
employees from the jurisdiction of the RLA. For additional discussion of the RLA, see “Item 1. Business” of this Annual Report under
the caption “Regulation.” Such legislation could expose our customers to the type of service disruptions that the RLA was designed to
the caption “Regulation.” Such legislation could expose our customers to the type of service disruptions that the RLA was designed to
prevent — local work stoppages in key areas that interrupt the timely flow of shipments of time-sensitive, high-value goods
prevent — local work stoppages in key areas that interrupt the timely flow of shipments of time-sensitive, high-value goods
throughout our global network. Such disruptions could threaten our ability to provide competitively priced shipping options and ready
throughout our global network. Such disruptions could threaten our ability to provide competitively priced shipping options and ready
access to global markets.
access to global markets.

There is also the possibility that Congress could pass other labor legislation that could adversely affect our companies, such as FedEx
There is also the possibility that Congress could pass other labor legislation that could adversely affect our companies, such as FedEx
Ground and FedEx Freight, whose employees are governed by the NLRA. In addition, federal and state governmental agencies, such
Ground and FedEx Freight, whose employees are governed by the NLRA. In addition, federal and state governmental agencies, such
as the National Mediation Board and the National Labor Relations Board, have and may continue to take actions that could make it
as the National Mediation Board and the National Labor Relations Board, have and may continue to take actions that could make it
easier for our employees to organize under the RLA or NLRA. Finally, changes to federal or state laws governing employee
easier for our employees to organize under the RLA or NLRA. Finally, changes to federal or state laws governing employee
classification could impact the status of FedEx Ground’s service providers as independent employers of drivers. If FedEx Ground is
classification could impact the status of FedEx Ground’s service providers as independent employers of drivers. If FedEx Ground is
deemed to be an employer or joint employer of the drivers of these service providers, labor organizations could more easily organize
deemed to be an employer or joint employer of the drivers of these service providers, labor organizations could more easily organize
these individuals, our operating costs could increase materially and we could incur significant capital outlays.
these individuals, our operating costs could increase materially and we could incur significant capital outlays.

FedEx Ground relies on service providers to conduct its linehaul and pickup-and-delivery operations, and the status of these
FedEx Ground relies on service providers to conduct its linehaul and pickup-and-delivery operations, and the status of these
service providers as direct employers of drivers providing these services is being challenged. We are defending joint-employer cases
service providers as direct employers of drivers providing these services is being challenged. We are defending joint-employer cases
where it is alleged that FedEx Ground should be treated as an employer of the drivers employed by service providers engaged by
where it is alleged that FedEx Ground should be treated as an employer of the drivers employed by service providers engaged by
FedEx Ground. We incur certain costs, including legal fees, in defending the status of service providers engaged by FedEx Ground as
FedEx Ground. We incur certain costs, including legal fees, in defending the status of service providers engaged by FedEx Ground as
direct employers of their drivers. We continue to believe that FedEx Ground is not an employer or joint employer of the drivers of
direct employers of their drivers. We continue to believe that FedEx Ground is not an employer or joint employer of the drivers of
these independent businesses. However, adverse determinations in these matters or regulatory developments could, among other
these independent businesses. However, adverse determinations in these matters or regulatory developments could, among other
things, entitle service providers’ drivers to certain wage payments from the service providers and FedEx Ground, and result in
things, entitle service providers’ drivers to certain wage payments from the service providers and FedEx Ground, and result in
employment and withholding tax and benefit liability for FedEx Ground.
employment and withholding tax and benefit liability for FedEx Ground.

Proposed pilot flight and duty time regulations could impair our operations and impose substantial costs on us. In 2010, the FAA

proposed regulations that would change the flight and duty time rules applicable to all-cargo air carriers. When the FAA issued final

regulations in 2011 (the “2011 regulations”), all-cargo carriers, including FedEx Express, were exempt from these new requirements.

Instead, all-cargo carriers were required to continue complying with previously enacted flight and duty time rules and allowed to

pursue the development of fatigue risk management systems to develop fatigue mitigations unique to each operation. In 2012, the

FAA reaffirmed the exclusion of all-cargo carriers from the 2011 regulations, and litigation in the U.S. Court of Appeals for the

District of Columbia affirmed the FAA’s decision. However, this issue remains a policy priority for certain labor groups, and the U.S.

Congress is currently considering legislation that, if adopted, would require all-cargo carriers to comply with the 2011 regulations.

Required compliance with the 2011 regulations would make it more difficult to avoid pilot fatigue and could impose substantial costs

on us in order to maintain operational reliability.

Increasing costs, the volatility of costs and funding requirements and other legal mandates for employee benefits, especially

pension and healthcare benefits, could adversely impact our results of operations, financial condition and liquidity. We sponsor

programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined

contribution plans and postretirement healthcare plans. The costs of providing pension and other retirement benefit plans are

dependent on numerous assumptions, such as discount rates, investment returns on plan assets, salary increases, expected retirement,

mortality, employee turnover and future increases in healthcare costs. Changes in actuarial assumptions and differences between the

assumptions and actual values, as well as significant declines in the value of investments that fund our pension and other

postretirement plans, if not offset or mitigated by a decline in plan liabilities, could increase pension and other postretirement expense,

and we could be required from time to time to fund the pension plans with significant amounts of cash. Such cash funding obligations

could adversely affect our results of operations and liquidity. Additionally, the rules for pension and retirement benefit plan

accounting are complex, involve numerous assumptions and can produce volatility in our results of operations, financial condition and

liquidity. For example, our fourth quarter mark-to-market (“MTM”) retirement plans accounting adjustment resulted in a pre-tax

noncash $1.2 billion gain ($936 million, net of tax, or $3.48 per diluted share) in 2021 and a pre-tax noncash $794 million loss ($583

million, net of tax, or $2.22 per diluted share) in 2020. For additional information on our MTM retirement plans accounting

adjustments, see “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition—Results of

Operations and Outlook—Consolidated Results—Retirement Plans MTM Adjustments” and Note 14 of the consolidated financial

statements included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report.

Environmental, Climate and Weather Risks

We may be affected by global climate change or by legal, regulatory or market responses to such change. Concern over climate

change, including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit

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. Increased regulation regarding

GHG emissions, especially aircraft or vehicle engine emissions, could impose substantial costs on us, especially at FedEx Express.

These costs include an increase in the cost of the fuel and other energy we purchase and capital costs associated with updating or

replacing our aircraft or vehicles prematurely. Until the timing, scope and extent of such possible regulation becomes known, we

cannot predict its effect on our cost structure or our operating results. It is reasonably possible, however, that it could materially

increase our operating expenses and have an adverse direct or indirect effect on our business, if instituted. For additional discussion of

regulatory responses to climate change, including CORSIA and the U.S.’s recent re-entry into the Paris climate accord, see “Item 1.

Business” of this Annual Report under the caption “Regulation.”

Moreover, even without such regulation, increased awareness and any adverse publicity in the global marketplace about the GHGs

emitted by companies in the airline and transportation industries could harm our reputation and reduce customer demand for our

services, especially our air express services. Finally, given the broad and global scope of our operations and our susceptibility to

global macroeconomic trends, we are particularly vulnerable to the physical risks of climate change that could affect all of humankind,

such as shifts in weather patterns and world ecosystems.

We may be unable to achieve our goal of carbon neutrality for our global operations by calendar 2040. In March 2021, we announced a

goal to achieve carbon neutrality for our global operations by calendar 2040. Achievement of this goal depends on our execution of

operational strategies relating to vehicle electrification, development of sustainable customer solutions, identification and investment

in alternative fuels, fuel conservation and aircraft modernization programs, and investments in our facilities and natural carbon

sequestration.

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Our business is labor intensive in nature, and our ability to meet our labor and purchased transportation needs while controlling related

costs is generally subject to numerous external factors, including the availability of a sufficient number of qualified persons in the

markets where we and contracted service providers operate, inflation, unemployment levels within these markets, prevailing wage

rates, behavioral changes, health and other insurance costs, safety levels of our operations, adoption of new or revised employment

and labor laws and regulations (including increased minimum wage requirements) or government programs and our reputation within

the labor market. We incurred higher costs due to labor market challenges in 2021, and we expect such conditions to continue to be

present in 2022. Additionally, we are incurring increased wage rates and costs for additional personnel in place to support our

operations and meet regulatory requirements in response to the COVID-19 pandemic. See “Item 7. Management’s Discussion and

Analysis of Results of Operations and Financial Condition” of this Annual Report for more information. Our inability to effectively

meet our labor and purchased transportation needs can hinder our ability to execute our business strategy, negatively impact service

levels and adversely affect our business and results of operations.

Labor organizations attempt to organize groups of our employees from time to time, and potential changes in labor laws could

make it easier for them to do so. If we are unable to continue to maintain good relationships with our employees and avoid having

labor organizations organize groups of our employees, our operating costs could significantly increase and our operational flexibility

could be significantly reduced. Despite continual organizing attempts by labor unions, other than the pilots at FedEx Express and

drivers at one FedEx Freight, Inc. facility, our U.S. employees have thus far chosen not to unionize (we acquired FedEx Supply Chain

in 2015, which already had a small number of employees who are members of unions). Additionally, certain of FedEx Express’s non-

U.S. employees are unionized.

Our collective bargaining agreement with the ALPA, which represents the pilots of FedEx Express, is scheduled to become amendable

in November 2021. Bargaining for a successor agreement began in May 2021. While collective bargaining agreements under the RLA,

which covers the pilots at FedEx Express, do not expire, we may be unable to maintain certain favorable terms included in the current

collective bargaining agreement following negotiations with the ALPA. Our inability to successfully reach new collective bargaining

agreements with the ALPA and other unions representing FedEx employees could adversely affect our business and results of

operations.

The U.S. Congress has, in the past, considered adopting changes in labor laws, however, 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 Express

employees from the jurisdiction of the RLA. For additional discussion of the RLA, see “Item 1. Business” of this Annual Report under

the caption “Regulation.” Such legislation could expose our customers to the type of service disruptions that the RLA was designed to

prevent — local work stoppages in key areas that interrupt the timely flow of shipments of time-sensitive, high-value goods

throughout our global network. Such disruptions could threaten our ability to provide competitively priced shipping options and ready

access to global markets.

There is also the possibility that Congress could pass other labor legislation that could adversely affect our companies, such as FedEx

Ground and FedEx Freight, whose employees are governed by the NLRA. In addition, federal and state governmental agencies, such

as the National Mediation Board and the National Labor Relations Board, have and may continue to take actions that could make it

easier for our employees to organize under the RLA or NLRA. Finally, changes to federal or state laws governing employee

classification could impact the status of FedEx Ground’s service providers as independent employers of drivers. If FedEx Ground is

deemed to be an employer or joint employer of the drivers of these service providers, labor organizations could more easily organize

these individuals, our operating costs could increase materially and we could incur significant capital outlays.

FedEx Ground relies on service providers to conduct its linehaul and pickup-and-delivery operations, and the status of these

service providers as direct employers of drivers providing these services is being challenged. We are defending joint-employer cases

where it is alleged that FedEx Ground should be treated as an employer of the drivers employed by service providers engaged by

FedEx Ground. We incur certain costs, including legal fees, in defending the status of service providers engaged by FedEx Ground as

direct employers of their drivers. We continue to believe that FedEx Ground is not an employer or joint employer of the drivers of

these independent businesses. However, adverse determinations in these matters or regulatory developments could, among other

things, entitle service providers’ drivers to certain wage payments from the service providers and FedEx Ground, and result in

employment and withholding tax and benefit liability for FedEx Ground.

Proposed pilot flight and duty time regulations could impair our operations and impose substantial costs on us. In 2010, the FAA
Proposed pilot flight and duty time regulations could impair our operations and impose substantial costs on us. In 2010, the FAA
proposed regulations that would change the flight and duty time rules applicable to all-cargo air carriers. When the FAA issued final
proposed regulations that would change the flight and duty time rules applicable to all-cargo air carriers. When the FAA issued final
regulations in 2011 (the “2011 regulations”), all-cargo carriers, including FedEx Express, were exempt from these new requirements.
regulations in 2011 (the “2011 regulations”), all-cargo carriers, including FedEx Express, were exempt from these new requirements.
Instead, all-cargo carriers were required to continue complying with previously enacted flight and duty time rules and allowed to
Instead, all-cargo carriers were required to continue complying with previously enacted flight and duty time rules and allowed to
pursue the development of fatigue risk management systems to develop fatigue mitigations unique to each operation. In 2012, the
pursue the development of fatigue risk management systems to develop fatigue mitigations unique to each operation. In 2012, the
FAA reaffirmed the exclusion of all-cargo carriers from the 2011 regulations, and litigation in the U.S. Court of Appeals for the
FAA reaffirmed the exclusion of all-cargo carriers from the 2011 regulations, and litigation in the U.S. Court of Appeals for the
District of Columbia affirmed the FAA’s decision. However, this issue remains a policy priority for certain labor groups, and the U.S.
District of Columbia affirmed the FAA’s decision. However, this issue remains a policy priority for certain labor groups, and the U.S.
Congress is currently considering legislation that, if adopted, would require all-cargo carriers to comply with the 2011 regulations.
Congress is currently considering legislation that, if adopted, would require all-cargo carriers to comply with the 2011 regulations.
Required compliance with the 2011 regulations would make it more difficult to avoid pilot fatigue and could impose substantial costs
Required compliance with the 2011 regulations would make it more difficult to avoid pilot fatigue and could impose substantial costs
on us in order to maintain operational reliability.
on us in order to maintain operational reliability.

Increasing costs, the volatility of costs and funding requirements and other legal mandates for employee benefits, especially
Increasing costs, the volatility of costs and funding requirements and other legal mandates for employee benefits, especially
pension and healthcare benefits, could adversely impact our results of operations, financial condition and liquidity. We sponsor
pension and healthcare benefits, could adversely impact our results of operations, financial condition and liquidity. We sponsor
programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined
programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined
contribution plans and postretirement healthcare plans. The costs of providing pension and other retirement benefit plans are
contribution plans and postretirement healthcare plans. The costs of providing pension and other retirement benefit plans are
dependent on numerous assumptions, such as discount rates, investment returns on plan assets, salary increases, expected retirement,
dependent on numerous assumptions, such as discount rates, investment returns on plan assets, salary increases, expected retirement,
mortality, employee turnover and future increases in healthcare costs. Changes in actuarial assumptions and differences between the
mortality, employee turnover and future increases in healthcare costs. Changes in actuarial assumptions and differences between the
assumptions and actual values, as well as significant declines in the value of investments that fund our pension and other
assumptions and actual values, as well as significant declines in the value of investments that fund our pension and other
postretirement plans, if not offset or mitigated by a decline in plan liabilities, could increase pension and other postretirement expense,
postretirement plans, if not offset or mitigated by a decline in plan liabilities, could increase pension and other postretirement expense,
and we could be required from time to time to fund the pension plans with significant amounts of cash. Such cash funding obligations
and we could be required from time to time to fund the pension plans with significant amounts of cash. Such cash funding obligations
could adversely affect our results of operations and liquidity. Additionally, the rules for pension and retirement benefit plan
could adversely affect our results of operations and liquidity. Additionally, the rules for pension and retirement benefit plan
accounting are complex, involve numerous assumptions and can produce volatility in our results of operations, financial condition and
accounting are complex, involve numerous assumptions and can produce volatility in our results of operations, financial condition and
liquidity. For example, our fourth quarter mark-to-market (“MTM”) retirement plans accounting adjustment resulted in a pre-tax
liquidity. For example, our fourth quarter mark-to-market (“MTM”) retirement plans accounting adjustment resulted in a pre-tax
noncash $1.2 billion gain ($936 million, net of tax, or $3.48 per diluted share) in 2021 and a pre-tax noncash $794 million loss ($583
noncash $1.2 billion gain ($936 million, net of tax, or $3.48 per diluted share) in 2021 and a pre-tax noncash $794 million loss ($583
million, net of tax, or $2.22 per diluted share) in 2020. For additional information on our MTM retirement plans accounting
million, net of tax, or $2.22 per diluted share) in 2020. For additional information on our MTM retirement plans accounting
adjustments, see “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition—Results of
adjustments, see “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition—Results of
Operations and Outlook—Consolidated Results—Retirement Plans MTM Adjustments” and Note 14 of the consolidated financial
Operations and Outlook—Consolidated Results—Retirement Plans MTM Adjustments” and Note 14 of the consolidated financial
statements included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
statements included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report.

Environmental, Climate and Weather Risks
Environmental, Climate and Weather Risks

We may be affected by global climate change or by legal, regulatory or market responses to such change. Concern over climate
We may be affected by global climate change or by legal, regulatory or market responses to such change. Concern over climate
change, including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit
change, including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit
GHG emissions, including our aircraft and vehicle engine emissions. Increasingly, state and local governments are also considering
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
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. Increased regulation regarding
various countries and regions are following different approaches to the regulation of climate change. Increased regulation regarding
GHG emissions, especially aircraft or vehicle engine emissions, could impose substantial costs on us, especially at FedEx Express.
GHG emissions, especially aircraft or vehicle engine emissions, could impose substantial costs on us, especially at FedEx Express.
These costs include an increase in the cost of the fuel and other energy we purchase and capital costs associated with updating or
These costs include an increase in the cost of the fuel and other energy we purchase and capital costs associated with updating or
replacing our aircraft or vehicles prematurely. Until the timing, scope and extent of such possible regulation becomes known, we
replacing our aircraft or vehicles prematurely. Until the timing, scope and extent of such possible regulation becomes known, we
cannot predict its effect on our cost structure or our operating results. It is reasonably possible, however, that it could materially
cannot predict its effect on our cost structure or our operating results. It is reasonably possible, however, that it could materially
increase our operating expenses and have an adverse direct or indirect effect on our business, if instituted. For additional discussion of
increase our operating expenses and have an adverse direct or indirect effect on our business, if instituted. For additional discussion of
regulatory responses to climate change, including CORSIA and the U.S.’s recent re-entry into the Paris climate accord, see “Item 1.
regulatory responses to climate change, including CORSIA and the U.S.’s recent re-entry into the Paris climate accord, see “Item 1.
Business” of this Annual Report under the caption “Regulation.”
Business” of this Annual Report under the caption “Regulation.”

Moreover, even without such regulation, increased awareness and any adverse publicity in the global marketplace about the GHGs
Moreover, even without such regulation, increased awareness and any adverse publicity in the global marketplace about the GHGs
emitted by companies in the airline and transportation industries could harm our reputation and reduce customer demand for our
emitted by companies in the airline and transportation industries could harm our reputation and reduce customer demand for our
services, especially our air express services. Finally, given the broad and global scope of our operations and our susceptibility to
services, especially our air express services. Finally, given the broad and global scope of our operations and our susceptibility to
global macroeconomic trends, we are particularly vulnerable to the physical risks of climate change that could affect all of humankind,
global macroeconomic trends, we are particularly vulnerable to the physical risks of climate change that could affect all of humankind,
such as shifts in weather patterns and world ecosystems.
such as shifts in weather patterns and world ecosystems.

We may be unable to achieve our goal of carbon neutrality for our global operations by calendar 2040. In March 2021, we announced a
We may be unable to achieve our goal of carbon neutrality for our global operations by calendar 2040. In March 2021, we announced a
goal to achieve carbon neutrality for our global operations by calendar 2040. Achievement of this goal depends on our execution of
goal to achieve carbon neutrality for our global operations by calendar 2040. Achievement of this goal depends on our execution of
operational strategies relating to vehicle electrification, development of sustainable customer solutions, identification and investment
operational strategies relating to vehicle electrification, development of sustainable customer solutions, identification and investment
in alternative fuels, fuel conservation and aircraft modernization programs, and investments in our facilities and natural carbon
in alternative fuels, fuel conservation and aircraft modernization programs, and investments in our facilities and natural carbon
sequestration.
sequestration.

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Execution of these strategies and achievement of our calendar 2040 goal is subject to risks and uncertainties, many of which are
Execution of these strategies and achievement of our calendar 2040 goal is subject to risks and uncertainties, many of which are
outside of our control. These risks and uncertainties include, but are not limited to: our ability to execute our strategies and achieve our
outside of our control. These risks and uncertainties include, but are not limited to: our ability to execute our strategies and achieve our
goals within the currently projected costs and the expected timeframes; the availability and cost of zero-emission electric vehicles,
goals within the currently projected costs and the expected timeframes; the availability and cost of zero-emission electric vehicles,
alternative fuels, fuel-efficient aircraft, global electrical charging infrastructure, off-site renewable energy and other materials and
alternative fuels, fuel-efficient aircraft, global electrical charging infrastructure, off-site renewable energy and other materials and
components; unforeseen production, design, operational and technological difficulties; the outcome of research efforts and future
components; unforeseen production, design, operational and technological difficulties; the outcome of research efforts and future
technology developments, including the ability to scale projects and technologies on a commercially competitive basis such as carbon
technology developments, including the ability to scale projects and technologies on a commercially competitive basis such as carbon
sequestration and/or other related processes; compliance with, and changes or additions to, global and regional regulations, taxes, charges,
sequestration and/or other related processes; compliance with, and changes or additions to, global and regional regulations, taxes, charges,
mandates or requirements relating to GHG emissions, carbon costs or climate-related goals; labor-related regulations and requirements that
mandates or requirements relating to GHG emissions, carbon costs or climate-related goals; labor-related regulations and requirements that
restrict or prohibit our ability to impose requirements on third parties who provide contracted transportation for our transportation networks;
restrict or prohibit our ability to impose requirements on third parties who provide contracted transportation for our transportation networks;
adapting products to customer preferences and customer acceptance of sustainable supply chain solutions; the actions of competitors and
adapting products to customer preferences and customer acceptance of sustainable supply chain solutions; the actions of competitors and
competitive pressures; and the pace of regional and global recovery from the COVID-19 pandemic.
competitive pressures; and the pace of regional and global recovery from the COVID-19 pandemic.

There is no assurance that we will be able to successfully execute our strategies and achieve our calendar 2040 goal of carbon
There is no assurance that we will be able to successfully execute our strategies and achieve our calendar 2040 goal of carbon
neutrality for our global operations. Failure to achieve our calendar 2040 goal could damage our reputation and customer and other
neutrality for our global operations. Failure to achieve our calendar 2040 goal could damage our reputation and customer and other
stakeholder relationships. Further, given investors’ increased focus related to environmental, social and governance matters, such a failure
stakeholder relationships. Further, given investors’ increased focus related to environmental, social and governance matters, such a failure
could cause large stockholders to reduce their ownership of FedEx common stock and limit our access to financing. Such conditions could
could cause large stockholders to reduce their ownership of FedEx common stock and limit our access to financing. Such conditions could
have an adverse effect on our business, results of operations and financial condition, as well as on the price of our common stock.
have an adverse effect on our business, results of operations and financial condition, as well as on the price of our common stock.

Our inability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key
Our inability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key
geography could adversely impact our business and results of operations. While we operate several integrated networks with assets
geography could adversely impact our business and results of operations. While we operate several integrated networks with assets
distributed throughout the world, there are concentrations of key assets within our networks that are exposed to adverse weather
distributed throughout the world, there are concentrations of key assets within our networks that are exposed to adverse weather
conditions or localized risks from natural or manmade disasters such as earthquakes, volcanoes, wildfires, hurricanes, tornadoes,
conditions or localized risks from natural or manmade disasters such as earthquakes, volcanoes, wildfires, hurricanes, tornadoes,
floods, severe winter weather, conflicts or unrest, terrorist attacks or other disturbances, actual or threatened. Additionally, shifts in
floods, severe winter weather, conflicts or unrest, terrorist attacks or other disturbances, actual or threatened. Additionally, shifts in
weather patterns caused by climate change could increase the frequency, severity or duration of certain adverse weather conditions.
weather patterns caused by climate change could increase the frequency, severity or duration of certain adverse weather conditions.
Prolonged interruptions or disruptions at a key location such as our FedEx Express Memphis World Hub or one of our information-
Prolonged interruptions or disruptions at a key location such as our FedEx Express Memphis World Hub or one of our information-
technology centers could adversely impact our business and results of operations. We also may incur significant costs to reestablish or
technology centers could adversely impact our business and results of operations. We also may incur significant costs to reestablish or
relocate these functions. Moreover, resulting economic dislocations, including supply chain and fuel disruptions, could adversely
relocate these functions. Moreover, resulting economic dislocations, including supply chain and fuel disruptions, could adversely
impact demand for our services resulting in an adverse effect on our business and results of operations.
impact demand for our services resulting in an adverse effect on our business and results of operations.

Other Legal, Regulatory and Miscellaneous Risks
Other Legal, Regulatory and Miscellaneous Risks

Government regulation and enforcement are evolving and unfavorable changes could harm our business. We are subject to
Government regulation and enforcement are evolving and unfavorable changes could harm our business. We are subject to
regulation under a wide variety of U.S. federal, state and local and non-U.S. government regulations, laws, policies and actions. There
regulation under a wide variety of U.S. federal, state and local and non-U.S. government regulations, laws, policies and actions. There
can be no assurance that such regulations, laws, policies and actions will not be changed in ways that will decrease the demand for our
can be no assurance that such regulations, laws, policies and actions will not be changed in ways that will decrease the demand for our
services, subject us to escalating costs or require us to modify our business models and objectives, harming our financial results. In
services, subject us to escalating costs or require us to modify our business models and objectives, harming our financial results. In
particular, legislative, regulatory or other actions that U.S. and non-U.S. governments have undertaken or are considering in areas such
particular, legislative, regulatory or other actions that U.S. and non-U.S. governments have undertaken or are considering in areas such
as data privacy and sovereignty, the use of new technology, taxes, foreign exchange intervention in response to currency volatility,
as data privacy and sovereignty, the use of new technology, taxes, foreign exchange intervention in response to currency volatility,
currency controls that could restrict the movement of liquidity from particular jurisdictions, trade controls, tariffs, quotas, embargoes
currency controls that could restrict the movement of liquidity from particular jurisdictions, trade controls, tariffs, quotas, embargoes
or sanctions in the U.S. or other countries, complex economic sanctions, export controls, additional security or workplace and
or sanctions in the U.S. or other countries, complex economic sanctions, export controls, additional security or workplace and
transportation safety requirements, labor and employment standards (including with respect to our pilots) and benefits, government
transportation safety requirements, labor and employment standards (including with respect to our pilots) and benefits, government
contracting, environmental standards and accounting may have an adverse effect on our results of operations, financial condition,
contracting, environmental standards and accounting may have an adverse effect on our results of operations, financial condition,
capital requirements, effective tax rate and performance. For additional discussion, see “Item 1. Business” of this Annual Report under
capital requirements, effective tax rate and performance. For additional discussion, see “Item 1. Business” of this Annual Report under
the caption “Regulation.” Additionally, the new U.S. presidential administration has indicated a desire to reform various aspects of
the caption “Regulation.” Additionally, the new U.S. presidential administration has indicated a desire to reform various aspects of
existing laws, regulations and enforcement priorities and strategies that could, among other things, lead to comprehensive tax reform,
existing laws, regulations and enforcement priorities and strategies that could, among other things, lead to comprehensive tax reform,
broadly increase the U.S. minimum wage to $15 per hour, make it easier for unions to organize our U.S. employees and alter the
broadly increase the U.S. minimum wage to $15 per hour, make it easier for unions to organize our U.S. employees and alter the
employment relationship between service providers engaged by FedEx Ground and the drivers employed by those service providers.
employment relationship between service providers engaged by FedEx Ground and the drivers employed by those service providers.

We could be subject to adverse changes in regulations and interpretations or challenges to our tax positions. We are subject to
We could be subject to adverse changes in regulations and interpretations or challenges to our tax positions. We are subject to
taxation in the U.S. and numerous foreign jurisdictions. From time to time, changes in tax laws or regulations may be enacted that
taxation in the U.S. and numerous foreign jurisdictions. From time to time, changes in tax laws or regulations may be enacted that
could significantly affect our overall tax liabilities and our effective tax rate. U.S. and foreign governmental agencies maintain focus
could significantly affect our overall tax liabilities and our effective tax rate. U.S. and foreign governmental agencies maintain focus
on the taxation of multinational companies, including statutory tax rates, global minimum taxes, digital taxes and transactions between
on the taxation of multinational companies, including statutory tax rates, global minimum taxes, digital taxes and transactions between
affiliated companies. Such changes may require new and complex computations to be performed, significant judgments, estimates and
affiliated companies. Such changes may require new and complex computations to be performed, significant judgments, estimates and
calculations to be made and the preparation and analysis of information not previously relevant or regularly produced.
calculations to be made and the preparation and analysis of information not previously relevant or regularly produced.

Standard-setting bodies could interpret or issue guidance on how provisions of certain tax laws and regulations will be applied or

otherwise administered that is different from our interpretation, and we may be required to make adjustments to amounts that we have

recorded that may adversely impact our results of operations and financial condition. For example, in 2019, the U.S. Treasury

Department issued final regulations covering the one-time transition tax on unrepatriated foreign earnings, which was enacted as part

of the Tax Cuts and Jobs Act. Certain guidance included in these final regulations is inconsistent with our interpretation that led to the

recognition of a $233 million cumulative benefit through 2019. During 2021, we filed suit in U.S. District Court for the Western

District of Tennessee challenging the validity of this tax regulation. Our lawsuit seeks to have the court declare this regulation invalid

and order the refund of overpayments of U.S. federal income taxes for 2018 and 2019 attributable to the denial of foreign tax credits

under the regulation. We continue to pursue this lawsuit; however, if we are ultimately unsuccessful in defending our position, we

may be required to reverse the benefit previously recorded.

Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding data protection. There has

recently been heightened regulatory and enforcement focus on data protection in the U.S. (at both the state and federal level) and

abroad, and an actual or alleged failure to comply with applicable U.S. or foreign data protection laws, regulations or other data

protection standards may expose us to litigation (including, in some instances, class action litigation), fines, sanctions or other

penalties, which could harm our reputation and adversely impact our business, results of operations and financial condition. This

regulatory environment is increasingly challenging and may present material obligations and risks to our business, including

significantly expanded compliance burdens, costs and enforcement risks. For example, the GDPR, which became effective in 2018,

greatly increases the jurisdictional reach of EU law and adds a broad array of requirements related to personal data, including

individual notice and opt-out preferences and the public disclosure of significant data breaches. Additionally, violations of the GDPR

can result in fines of as much as 4% of a company’s annual revenue. Other governments have enacted or are enacting similar data

protection laws, including data localization laws that require data to stay within their borders. All of these evolving compliance and

operational requirements, as well as the uncertain interpretation and enforcement of laws, impose significant costs and regulatory risks

that are likely to increase over time. See “Failure to successfully implement our business strategy and effectively respond to changes

in market dynamics and customer preferences will cause our future financial results to suffer.” above for additional information on

data protection risks related to our recent acquisition of ShopRunner and launch of FedEx Dataworks.

The regulatory environment for global aviation or other transportation rights may impact our operations and increase our

operating costs. Our extensive air network is critical to our success. Our right to serve foreign points is subject to the approval of the

Department of Transportation and generally requires a bilateral agreement between the U.S. and foreign governments. In addition, we

must obtain the permission of foreign governments to provide specific flights and services. Our operations outside of the U.S., such as

FedEx Express’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 Express to compete effectively in parts of the international domestic transportation and logistics market. Regulatory or

executive actions affecting global aviation or transportation rights or a failure to obtain or maintain aviation or other transportation

rights in important international markets could impair our ability to operate our networks. Further, our ability to obtain or maintain

aviation or other transportation rights internationally may be adversely affected by changes in international trade policies and

relations.

We are subject to other extensive regulatory and legal compliance requirements that may result in significant costs. For instance, the

FAA from time to time issues directives and other regulations relating to the maintenance and operation of aircraft that require

significant expenditures in order to comply. High-profile accidents, catastrophes or incidents involving aircraft may trigger increased

regulatory and legal compliance requirements. These requirements can be issued with little or no notice, or can otherwise impact our

ability to efficiently or fully utilize our aircraft, and in some instances have resulted in the temporary grounding of aircraft types

altogether. Further, our business may be adversely impacted when government agencies cease to operate as expected, including due to

partial shutdowns, sequestrations or similar events, which may result in, among other things, disruption in the ability of government

agencies to grant required regulatory approvals. For additional discussion, see “Item 1. Business” of this Annual Report under the

caption “Regulation.”

We are also subject to other risks and uncertainties, including:

• widespread outbreak of an illness or any other communicable disease, or any other public health crisis;

•

the increasing costs of compliance with federal, state and foreign governmental agency mandates (including the Foreign

Corrupt Practices Act and the U.K. Bribery Act) and defending against inappropriate or unjustified enforcement or other

actions by such agencies;

currency sales prices;

• changes in foreign currency exchange rates, especially in the euro, Chinese yuan, British pound, Canadian dollar, Australian

dollar, Hong Kong dollar, Mexican peso, Japanese yen and Brazilian real, which can affect our sales levels and foreign

- 32 -
- 32 -

- 33 -

Execution of these strategies and achievement of our calendar 2040 goal is subject to risks and uncertainties, many of which are

outside of our control. These risks and uncertainties include, but are not limited to: our ability to execute our strategies and achieve our

goals within the currently projected costs and the expected timeframes; the availability and cost of zero-emission electric vehicles,

alternative fuels, fuel-efficient aircraft, global electrical charging infrastructure, off-site renewable energy and other materials and

components; unforeseen production, design, operational and technological difficulties; the outcome of research efforts and future

technology developments, including the ability to scale projects and technologies on a commercially competitive basis such as carbon

sequestration and/or other related processes; compliance with, and changes or additions to, global and regional regulations, taxes, charges,

mandates or requirements relating to GHG emissions, carbon costs or climate-related goals; labor-related regulations and requirements that

restrict or prohibit our ability to impose requirements on third parties who provide contracted transportation for our transportation networks;

adapting products to customer preferences and customer acceptance of sustainable supply chain solutions; the actions of competitors and

competitive pressures; and the pace of regional and global recovery from the COVID-19 pandemic.

There is no assurance that we will be able to successfully execute our strategies and achieve our calendar 2040 goal of carbon

neutrality for our global operations. Failure to achieve our calendar 2040 goal could damage our reputation and customer and other

stakeholder relationships. Further, given investors’ increased focus related to environmental, social and governance matters, such a failure

could cause large stockholders to reduce their ownership of FedEx common stock and limit our access to financing. Such conditions could

have an adverse effect on our business, results of operations and financial condition, as well as on the price of our common stock.

Our inability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key

geography could adversely impact our business and results of operations. While we operate several integrated networks with assets

distributed throughout the world, there are concentrations of key assets within our networks that are exposed to adverse weather

conditions or localized risks from natural or manmade disasters such as earthquakes, volcanoes, wildfires, hurricanes, tornadoes,

floods, severe winter weather, conflicts or unrest, terrorist attacks or other disturbances, actual or threatened. Additionally, shifts in

weather patterns caused by climate change could increase the frequency, severity or duration of certain adverse weather conditions.

Prolonged interruptions or disruptions at a key location such as our FedEx Express Memphis World Hub or one of our information-

technology centers could adversely impact our business and results of operations. We also may incur significant costs to reestablish or

relocate these functions. Moreover, resulting economic dislocations, including supply chain and fuel disruptions, could adversely

impact demand for our services resulting in an adverse effect on our business and results of operations.

Other Legal, Regulatory and Miscellaneous Risks

Government regulation and enforcement are evolving and unfavorable changes could harm our business. We are subject to

regulation under a wide variety of U.S. federal, state and local and non-U.S. government regulations, laws, policies and actions. There

can be no assurance that such regulations, laws, policies and actions will not be changed in ways that will decrease the demand for our

services, subject us to escalating costs or require us to modify our business models and objectives, harming our financial results. In

particular, legislative, regulatory or other actions that U.S. and non-U.S. governments have undertaken or are considering in areas such

as data privacy and sovereignty, the use of new technology, taxes, foreign exchange intervention in response to currency volatility,

currency controls that could restrict the movement of liquidity from particular jurisdictions, trade controls, tariffs, quotas, embargoes

or sanctions in the U.S. or other countries, complex economic sanctions, export controls, additional security or workplace and

transportation safety requirements, labor and employment standards (including with respect to our pilots) and benefits, government

contracting, environmental standards and accounting may have an adverse effect on our results of operations, financial condition,

capital requirements, effective tax rate and performance. For additional discussion, see “Item 1. Business” of this Annual Report under

the caption “Regulation.” Additionally, the new U.S. presidential administration has indicated a desire to reform various aspects of

existing laws, regulations and enforcement priorities and strategies that could, among other things, lead to comprehensive tax reform,

broadly increase the U.S. minimum wage to $15 per hour, make it easier for unions to organize our U.S. employees and alter the

employment relationship between service providers engaged by FedEx Ground and the drivers employed by those service providers.

We could be subject to adverse changes in regulations and interpretations or challenges to our tax positions. We are subject to

taxation in the U.S. and numerous foreign jurisdictions. From time to time, changes in tax laws or regulations may be enacted that

could significantly affect our overall tax liabilities and our effective tax rate. U.S. and foreign governmental agencies maintain focus

on the taxation of multinational companies, including statutory tax rates, global minimum taxes, digital taxes and transactions between

affiliated companies. Such changes may require new and complex computations to be performed, significant judgments, estimates and

calculations to be made and the preparation and analysis of information not previously relevant or regularly produced.

Standard-setting bodies could interpret or issue guidance on how provisions of certain tax laws and regulations will be applied or
Standard-setting bodies could interpret or issue guidance on how provisions of certain tax laws and regulations will be applied or
otherwise administered that is different from our interpretation, and we may be required to make adjustments to amounts that we have
otherwise administered that is different from our interpretation, and we may be required to make adjustments to amounts that we have
recorded that may adversely impact our results of operations and financial condition. For example, in 2019, the U.S. Treasury
recorded that may adversely impact our results of operations and financial condition. For example, in 2019, the U.S. Treasury
Department issued final regulations covering the one-time transition tax on unrepatriated foreign earnings, which was enacted as part
Department issued final regulations covering the one-time transition tax on unrepatriated foreign earnings, which was enacted as part
of the Tax Cuts and Jobs Act. Certain guidance included in these final regulations is inconsistent with our interpretation that led to the
of the Tax Cuts and Jobs Act. Certain guidance included in these final regulations is inconsistent with our interpretation that led to the
recognition of a $233 million cumulative benefit through 2019. During 2021, we filed suit in U.S. District Court for the Western
recognition of a $233 million cumulative benefit through 2019. During 2021, we filed suit in U.S. District Court for the Western
District of Tennessee challenging the validity of this tax regulation. Our lawsuit seeks to have the court declare this regulation invalid
District of Tennessee challenging the validity of this tax regulation. Our lawsuit seeks to have the court declare this regulation invalid
and order the refund of overpayments of U.S. federal income taxes for 2018 and 2019 attributable to the denial of foreign tax credits
and order the refund of overpayments of U.S. federal income taxes for 2018 and 2019 attributable to the denial of foreign tax credits
under the regulation. We continue to pursue this lawsuit; however, if we are ultimately unsuccessful in defending our position, we
under the regulation. We continue to pursue this lawsuit; however, if we are ultimately unsuccessful in defending our position, we
may be required to reverse the benefit previously recorded.
may be required to reverse the benefit previously recorded.

Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding data protection. There has
Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding data protection. There has
recently been heightened regulatory and enforcement focus on data protection in the U.S. (at both the state and federal level) and
recently been heightened regulatory and enforcement focus on data protection in the U.S. (at both the state and federal level) and
abroad, and an actual or alleged failure to comply with applicable U.S. or foreign data protection laws, regulations or other data
abroad, and an actual or alleged failure to comply with applicable U.S. or foreign data protection laws, regulations or other data
protection standards may expose us to litigation (including, in some instances, class action litigation), fines, sanctions or other
protection standards may expose us to litigation (including, in some instances, class action litigation), fines, sanctions or other
penalties, which could harm our reputation and adversely impact our business, results of operations and financial condition. This
penalties, which could harm our reputation and adversely impact our business, results of operations and financial condition. This
regulatory environment is increasingly challenging and may present material obligations and risks to our business, including
regulatory environment is increasingly challenging and may present material obligations and risks to our business, including
significantly expanded compliance burdens, costs and enforcement risks. For example, the GDPR, which became effective in 2018,
significantly expanded compliance burdens, costs and enforcement risks. For example, the GDPR, which became effective in 2018,
greatly increases the jurisdictional reach of EU law and adds a broad array of requirements related to personal data, including
greatly increases the jurisdictional reach of EU law and adds a broad array of requirements related to personal data, including
individual notice and opt-out preferences and the public disclosure of significant data breaches. Additionally, violations of the GDPR
individual notice and opt-out preferences and the public disclosure of significant data breaches. Additionally, violations of the GDPR
can result in fines of as much as 4% of a company’s annual revenue. Other governments have enacted or are enacting similar data
can result in fines of as much as 4% of a company’s annual revenue. Other governments have enacted or are enacting similar data
protection laws, including data localization laws that require data to stay within their borders. All of these evolving compliance and
protection laws, including data localization laws that require data to stay within their borders. All of these evolving compliance and
operational requirements, as well as the uncertain interpretation and enforcement of laws, impose significant costs and regulatory risks
operational requirements, as well as the uncertain interpretation and enforcement of laws, impose significant costs and regulatory risks
that are likely to increase over time. See “Failure to successfully implement our business strategy and effectively respond to changes
that are likely to increase over time. See “Failure to successfully implement our business strategy and effectively respond to changes
in market dynamics and customer preferences will cause our future financial results to suffer.” above for additional information on
in market dynamics and customer preferences will cause our future financial results to suffer.” above for additional information on
data protection risks related to our recent acquisition of ShopRunner and launch of FedEx Dataworks.
data protection risks related to our recent acquisition of ShopRunner and launch of FedEx Dataworks.

The regulatory environment for global aviation or other transportation rights may impact our operations and increase our
The regulatory environment for global aviation or other transportation rights may impact our operations and increase our
operating costs. Our extensive air network is critical to our success. Our right to serve foreign points is subject to the approval of the
operating costs. Our extensive air network is critical to our success. Our right to serve foreign points is subject to the approval of the
Department of Transportation and generally requires a bilateral agreement between the U.S. and foreign governments. In addition, we
Department of Transportation and generally requires a bilateral agreement between the U.S. and foreign governments. In addition, we
must obtain the permission of foreign governments to provide specific flights and services. Our operations outside of the U.S., such as
must obtain the permission of foreign governments to provide specific flights and services. Our operations outside of the U.S., such as
FedEx Express’s international domestic operations, are also subject to current and potential regulations, including certain postal
FedEx Express’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
regulations and licensing requirements, that restrict, make difficult and sometimes prohibit, the ability of foreign-owned companies
such as FedEx Express to compete effectively in parts of the international domestic transportation and logistics market. Regulatory or
such as FedEx Express to compete effectively in parts of the international domestic transportation and logistics market. Regulatory or
executive actions affecting global aviation or transportation rights or a failure to obtain or maintain aviation or other transportation
executive actions affecting global aviation or transportation rights or a failure to obtain or maintain aviation or other transportation
rights in important international markets could impair our ability to operate our networks. Further, our ability to obtain or maintain
rights in important international markets could impair our ability to operate our networks. Further, our ability to obtain or maintain
aviation or other transportation rights internationally may be adversely affected by changes in international trade policies and
aviation or other transportation rights internationally may be adversely affected by changes in international trade policies and
relations.
relations.

We are subject to other extensive regulatory and legal compliance requirements that may result in significant costs. For instance, the
We are subject to other extensive regulatory and legal compliance requirements that may result in significant costs. For instance, the
FAA from time to time issues directives and other regulations relating to the maintenance and operation of aircraft that require
FAA from time to time issues directives and other regulations relating to the maintenance and operation of aircraft that require
significant expenditures in order to comply. High-profile accidents, catastrophes or incidents involving aircraft may trigger increased
significant expenditures in order to comply. High-profile accidents, catastrophes or incidents involving aircraft may trigger increased
regulatory and legal compliance requirements. These requirements can be issued with little or no notice, or can otherwise impact our
regulatory and legal compliance requirements. These requirements can be issued with little or no notice, or can otherwise impact our
ability to efficiently or fully utilize our aircraft, and in some instances have resulted in the temporary grounding of aircraft types
ability to efficiently or fully utilize our aircraft, and in some instances have resulted in the temporary grounding of aircraft types
altogether. Further, our business may be adversely impacted when government agencies cease to operate as expected, including due to
altogether. Further, our business may be adversely impacted when government agencies cease to operate as expected, including due to
partial shutdowns, sequestrations or similar events, which may result in, among other things, disruption in the ability of government
partial shutdowns, sequestrations or similar events, which may result in, among other things, disruption in the ability of government
agencies to grant required regulatory approvals. For additional discussion, see “Item 1. Business” of this Annual Report under the
agencies to grant required regulatory approvals. For additional discussion, see “Item 1. Business” of this Annual Report under the
caption “Regulation.”
caption “Regulation.”

We are also subject to other risks and uncertainties, including:
We are also subject to other risks and uncertainties, including:

• widespread outbreak of an illness or any other communicable disease, or any other public health crisis;
• widespread outbreak of an illness or any other communicable disease, or any other public health crisis;

•
•

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

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

- 32 -

- 33 -
- 33 -

• any liability resulting from and the costs of defending against class-action, derivative and other litigation, such as wage-and-
• any liability resulting from and the costs of defending against class-action, derivative and other litigation, such as wage-and-

Aircraft Purchase Commitments

hour, joint employment, securities and discrimination and retaliation claims, and any other legal or governmental proceedings,
hour, joint employment, securities and discrimination and retaliation claims, and any other legal or governmental proceedings,
including the matters discussed in Note 19 of the consolidated financial statements included in “Item 8. Financial Statements
including the matters discussed in Note 19 of the consolidated financial statements included in “Item 8. Financial Statements
and Supplementary Data” of this Annual Report;
and Supplementary Data” of this Annual Report;

of expected delivery:

The following table is a summary of the number and type of aircraft we were committed to purchase as of July 15, 2021, with the year

•
•

the impact of technology developments on our operations and on demand for our services, and our ability to continue to
the impact of technology developments on our operations and on demand for our services, and our ability to continue to
identify and eliminate unnecessary information-technology redundancy and complexity throughout the organization;
identify and eliminate unnecessary information-technology redundancy and complexity throughout the organization;

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

• disruptions in global supply chains, which can limit the access of FedEx and our service providers to vehicles and other key capital
• disruptions in global supply chains, which can limit the access of FedEx and our service providers to vehicles and other key capital

resources and increase our costs;
resources and increase our costs;

• stockholder activism, which could divert the attention of management and our board of directors from our business, hinder
• stockholder activism, which could divert the attention of management and our board of directors from our business, hinder

execution of our business strategy, give rise to perceived uncertainties as to our future and cause the price of our common stock to
execution of our business strategy, give rise to perceived uncertainties as to our future and cause the price of our common stock to
fluctuate significantly;
fluctuate significantly;

• constraints, volatility or disruption in the capital markets, our ability to maintain our current credit ratings, commercial paper
• constraints, volatility or disruption in the capital markets, our ability to maintain our current credit ratings, commercial paper

ratings, and senior unsecured debt and pass-through certificate credit ratings, and our ability to meet credit agreement financial
ratings, and senior unsecured debt and pass-through certificate credit ratings, and our ability to meet credit agreement financial
covenants; and
covenants; and

•
•

the alternative interest rates we are able to negotiate with counterparties pursuant to the relevant provisions of our credit agreements
the alternative interest rates we are able to negotiate with counterparties pursuant to the relevant provisions of our credit agreements
following cessation of the publication of the London Interbank Offered Rate in the event the euro interbank offered rate also ceases
following cessation of the publication of the London Interbank Offered Rate in the event the euro interbank offered rate also ceases
to exist and we make borrowings under the agreements.
to exist and we make borrowings under the agreements.

2022

2023

2024

2025

2026

Thereafter

Total

ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS

commitments and options.

Cessna

SkyCourier 408 ATR 72-600F

B767F(1)

B777F(2)

Total

—

135

(1) On June 22, 2021, FedEx Express exercised options to purchase an additional 20 B767F aircraft, ten of which will be delivered in

2024 and ten of which will be delivered in 2025. These aircraft are reflected in the table above. As of July 15, 2021, our

obligation to purchase two B767F aircraft is conditioned upon there being no event that causes FedEx Express or its employees

not to be covered by the RLA.

(2) As of July 15, 2021, our obligation to purchase four B777F aircraft is conditioned upon there being no event that causes FedEx

Express or its employees not to be covered by the RLA.

As of May 31, 2021, we had $948 million in deposits and progress payments on aircraft purchases and other planned aircraft-related

transactions. See Note 18 of the accompanying consolidated financial statements for more information about our purchase

None.
None.

ITEM 2. PROPERTIES
ITEM 2. PROPERTIES

FedEx Express Segment
FedEx Express Segment

FedEx Express’s principal owned and leased properties include its aircraft, vehicles, major sorting and handling facilities,
FedEx Express’s principal owned and leased properties include its aircraft, vehicles, major sorting and handling facilities,
administration buildings, FedEx Drop Boxes and data processing and telecommunications equipment.
administration buildings, FedEx Drop Boxes and data processing and telecommunications equipment.

Aircraft and Vehicles
Aircraft and Vehicles

As of May 31, 2021, FedEx Express’s aircraft fleet consisted of the following:
As of May 31, 2021, FedEx Express’s aircraft fleet consisted of the following:

Description
Description
Boeing B777F
Boeing B777F
Boeing MD11
Boeing MD11
Boeing MD10-30
Boeing MD10-30
Boeing 767F
Boeing 767F
Airbus A300-600
Airbus A300-600
Boeing 757-200
Boeing 757-200
ATR-72
ATR-72
ATR-72 600F
ATR-72 600F
ATR-42
ATR-42
Cessna 208B
Cessna 208B
Total
Total

Owned
Owned

Leased
Leased

Total
Total

44
44
50
50
13
13
102
102
56
56
119
119
21
21
2
2
20
20
235
235
662
662

3
3
7
7
—
—
—
—
12
12
—
—
—
—
—
—
—
—
—
—
22
22

Maximum Gross
Maximum Gross
Structural Payload
Structural Payload
(Pounds per Aircraft)
(Pounds per Aircraft)
233,300
233,300
192,600
192,600
175,900
175,900
127,100
127,100
106,600
106,600
63,000
63,000
17,970
17,970
19,290
19,290
12,070
12,070
2,830
2,830

47
47
57
57
13
13
102
102
68
68
119
119
21
21
2
2
20
20
235
235
684
684

At May 31, 2021, FedEx Express operated approximately 87,000 vehicles in its global network.
At May 31, 2021, FedEx Express operated approximately 87,000 vehicles in its global network.

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- 34 -

- 35 -

Cessna
Cessna

9
9
6
6
6
6
6
6
1
1
—
—
28
28

2022
2022
2023
2023
2024
2024
2025
2025
2026
2026
Thereafter
Thereafter
Total
Total

SkyCourier 408 ATR 72-600F
SkyCourier 408 ATR 72-600F
9
9
12
12
12
12
12
12
5
5
—
—
50
50

B767F(1)
B767F(1)

B777F(2)
B777F(2)

Total
Total

9
9
13
13
14
14
10
10
—
—
—
—
46
46

3
3
2
2
4
4
2
2
—
—
—
—
11
11

30
30
33
33
36
36
30
30
6
6
—
—
135
135

• any liability resulting from and the costs of defending against class-action, derivative and other litigation, such as wage-and-

Aircraft Purchase Commitments
Aircraft Purchase Commitments

The following table is a summary of the number and type of aircraft we were committed to purchase as of July 15, 2021, with the year
The following table is a summary of the number and type of aircraft we were committed to purchase as of July 15, 2021, with the year
of expected delivery:
of expected delivery:

hour, joint employment, securities and discrimination and retaliation claims, and any other legal or governmental proceedings,

including the matters discussed in Note 19 of the consolidated financial statements included in “Item 8. Financial Statements

and Supplementary Data” of this Annual Report;

•

the impact of technology developments on our operations and on demand for our services, and our ability to continue to

identify and eliminate unnecessary information-technology redundancy and complexity throughout the organization;

• governmental underinvestment in transportation infrastructure, which could increase our costs and adversely impact our service

levels due to traffic congestion, prolonged closure of key thoroughfares or sub-optimal routing of our vehicles and aircraft;

• disruptions in global supply chains, which can limit the access of FedEx and our service providers to vehicles and other key capital

resources and increase our costs;

• stockholder activism, which could divert the attention of management and our board of directors from our business, hinder

execution of our business strategy, give rise to perceived uncertainties as to our future and cause the price of our common stock to

fluctuate significantly;

covenants; and

• constraints, volatility or disruption in the capital markets, our ability to maintain our current credit ratings, commercial paper

ratings, and senior unsecured debt and pass-through certificate credit ratings, and our ability to meet credit agreement financial

•

the alternative interest rates we are able to negotiate with counterparties pursuant to the relevant provisions of our credit agreements

following cessation of the publication of the London Interbank Offered Rate in the event the euro interbank offered rate also ceases

to exist and we make borrowings under the agreements.

ITEM 1B. UNRESOLVED STAFF COMMENTS

FedEx Express’s principal owned and leased properties include its aircraft, vehicles, major sorting and handling facilities,

administration buildings, FedEx Drop Boxes and data processing and telecommunications equipment.

As of May 31, 2021, FedEx Express’s aircraft fleet consisted of the following:

Owned

Leased

Total

Maximum Gross

Structural Payload

(Pounds per Aircraft)

102

119

235

662

—

102

119

235

684

233,300

192,600

175,900

127,100

106,600

63,000

17,970

19,290

12,070

2,830

None.

ITEM 2. PROPERTIES

FedEx Express Segment

Aircraft and Vehicles

Description

Boeing B777F

Boeing MD11

Boeing MD10-30

Boeing 767F

Airbus A300-600

Boeing 757-200

ATR-72

ATR-72 600F

ATR-42

Cessna 208B

Total

At May 31, 2021, FedEx Express operated approximately 87,000 vehicles in its global network.

(1) On June 22, 2021, FedEx Express exercised options to purchase an additional 20 B767F aircraft, ten of which will be delivered in
(1) On June 22, 2021, FedEx Express exercised options to purchase an additional 20 B767F aircraft, ten of which will be delivered in

2024 and ten of which will be delivered in 2025. These aircraft are reflected in the table above. As of July 15, 2021, our
2024 and ten of which will be delivered in 2025. These aircraft are reflected in the table above. As of July 15, 2021, our
obligation to purchase two B767F aircraft is conditioned upon there being no event that causes FedEx Express or its employees
obligation to purchase two B767F aircraft is conditioned upon there being no event that causes FedEx Express or its employees
not to be covered by the RLA.
not to be covered by the RLA.

(2) As of July 15, 2021, our obligation to purchase four B777F aircraft is conditioned upon there being no event that causes FedEx
(2) As of July 15, 2021, our obligation to purchase four B777F aircraft is conditioned upon there being no event that causes FedEx

Express or its employees not to be covered by the RLA.
Express or its employees not to be covered by the RLA.

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- 35 -
- 35 -

Sorting and Handling Facilities
Sorting and Handling Facilities

At May 31, 2021, FedEx Express operated the following major sorting and handling facilities:
At May 31, 2021, FedEx Express operated the following major sorting and handling facilities:

FedEx Express leases these facilities from the Memphis-Shelby County Airport Authority (the “Authority”). The lease obligates

FedEx Express to maintain and insure the leased property and to pay all related taxes, assessments and other charges. The lease is

subordinate to, and FedEx Express’s rights thereunder could be affected by, any future lease or agreement between the Authority and

Location
Location
Primary
Primary
Memphis, Tennessee
Memphis, Tennessee

National
National
Indianapolis, Indiana
Indianapolis, Indiana

Miami, Florida(2)
Miami, Florida(2)
Regional
Regional
Fort Worth, Texas
Fort Worth, Texas

Acres
Acres

Square
Square
Feet
Feet

Sorting
Sorting
Capacity
Capacity
(per hour)(1)
(per hour)(1)

800
800

3,607,973
3,607,973

484,000
484,000

482
482

2,509,000
2,509,000

120,000
120,000

Lessor
Lessor

Memphis-Shelby County
Memphis-Shelby County
Airport Authority
Airport Authority

Indianapolis Airport
Indianapolis Airport
Authority
Authority

29
29

143,322
143,322

7,000 Aero Miami FX, LLC
7,000 Aero Miami FX, LLC

168
168

948,000
948,000

Newark, New Jersey
Newark, New Jersey

70
70

595,000
595,000

Oakland, California
Oakland, California
Greensboro, N. Carolina
Greensboro, N. Carolina

75
75
165
165

587,700
587,700
593,000
593,000

156,000
156,000

76,000
76,000

Fort Worth Alliance Airport
Fort Worth Alliance Airport
Authority
Authority
Port Authority of New York
Port Authority of New York
and New Jersey
and New Jersey
63,000 Port of Oakland
63,000 Port of Oakland
23,000
23,000

Piedmont Triad Airport
Piedmont Triad Airport
Authority
Authority

Metropolitan
Metropolitan
Chicago, Illinois
Chicago, Illinois
Los Angeles, California
Los Angeles, California
International
International
Anchorage, Alaska(4)
Anchorage, Alaska(4)

Paris, France(5)
Paris, France(5)
Cologne, Germany(5)
Cologne, Germany(5)
Guangzhou, China(6)
Guangzhou, China(6)

Osaka, Japan(6)
Osaka, Japan(6)

(1) Documents and packages.
(1) Documents and packages.

54
54
34
34

481,350
481,350
305,300
305,300

23,000 City of Chicago
23,000 City of Chicago
57,000 City of Los Angeles
57,000 City of Los Angeles

64
64

332,000
332,000

25,000
25,000

State of Alaska,
State of Alaska,
Department of
Department of
Transportation and
Transportation and
Public Facilities
Public Facilities

111
111
11
11
155
155

1,238,000
1,238,000
325,000
325,000
873,006
873,006

52,000 Aeroports de Paris
52,000 Aeroports de Paris
20,000 Cologne Bonn Airport
20,000 Cologne Bonn Airport
56,000
56,000

Guangdong Airport
Guangdong Airport
Management Corp.
Management Corp.

17
17

425,206
425,206

9,000 Kansai Airports
9,000 Kansai Airports

Lease
Lease
Expiration
Expiration
Calendar Year
Calendar Year

the U.S. government.

2036
2036

2053
2053

2028
2028

2041
2041

2030
2030

2036
2036
2031
2031

2028
2028
2025(3)
2025(3)

2023
2023

2048
2048
2040
2040
2029
2029

2024
2024

FedEx Express has additional major international sorting-and-handling facilities located at Narita Airport in Tokyo and Stansted

Airport outside London. FedEx Express also has a substantial presence at airports in Hong Kong, Taiwan and Dubai. TNT Express

operates a central air hub near Liege, Belgium and a central European road hub in Duiven, The Netherlands. During 2020 we

substantially completed projects across our European hub and station locations that allow interoperability between the ground

networks for both FedEx Express and TNT Express packages. We expect to complete the final phase of international air network

interoperability in early calendar 2022. See “Item 1. Business” under “FedEx Express Segment—International Expansion” for

additional information on the integration of TNT Express.

Administrative and Other Properties and Facilities

The World Headquarters of FedEx Express is located in southeastern Shelby County, Tennessee. FedEx Express international

headquarters are located in Hoofddorp, The Netherlands. As of May 31, 2021, FedEx Express owned or leased 656 facilities for city

station operations in the U.S. In addition, over 1,400 city stations are owned or leased throughout FedEx Express’s international

network. The majority of these leases are for terms of five to ten years. City stations serve as a sorting and distribution center for a

particular city or region. We believe that suitable alternative facilities are available in each locale on satisfactory terms, if necessary.

As of May 31, 2021, FedEx Express had approximately 34,000 Drop Boxes. FedEx Express customers can also ship from

approximately 35,000 staffed drop-off locations, including FedEx Office stores and FedEx Authorized ShipCenters. Internationally,

FedEx Express had approximately 14,000 drop-off locations.

FedEx Ground Segment

FedEx Ground’s corporate headquarters are located in the Pittsburgh, Pennsylvania area. As of May 31, 2021, FedEx Ground owned

or leased 625 facilities, including 40 hubs. In addition, approximately 96,000 vehicles owned or leased by service providers support

FedEx Ground’s business. Of the 538 facilities that supported FedEx Home Delivery as of May 31, 2021, 511 were co-located with

existing FedEx Ground facilities. Leased facilities generally have terms of five years or less. The 40 hub facilities are strategically

located to cover the geographic area served by FedEx Ground. The hub facilities average approximately 475,000 square feet and range

in size from approximately 107,000 to 1,054,000 square feet.

FedEx Ground is adding new and expanded facilities and automation solutions to optimize FedEx Ground network capacity. See

“Item 1. Business—Business Segments—FedEx Ground Segment” of this Annual Report for additional information.

FedEx Freight Segment

FedEx Freight’s corporate headquarters are located in Memphis, Tennessee, with some administrative offices in Harrison, Arkansas.

As of May 31, 2021, FedEx Freight operated approximately 29,000 vehicles and nearly 400 service centers, which are strategically

located to provide service throughout North America. These facilities range in size from approximately 1,000 to 280,000 square feet

FedEx Services’ corporate headquarters are located in Memphis, Tennessee. FedEx Services leases state-of-the-art technology centers

in Collierville, Tennessee and Colorado Springs, Colorado. These facilities house personnel responsible for strategic software

development and other functions that support FedEx’s technology and e-commerce solutions.

The FedEx Authorized ShipCenter program offers U.S. domestic and international FedEx Express and FedEx Ground shipping and

drop-off services through a network of nearly 4,900 franchised and independent “pack and ship” retail locations. The FedEx OnSite

network includes approximately 18,000 drop-off locations at Walgreens, Dollar General and Albertsons stores. Additionally, FedEx

Services has an agreement with Office Depot, Inc. to offer U.S. domestic and international FedEx Express and FedEx Ground

shipping and drop-off services at Office Depot and OfficeMax retail locations (approximately 1,100 locations).

(2) Handles international express package and freight shipments to and from Latin America and the Caribbean.
(2) Handles international express package and freight shipments to and from Latin America and the Caribbean.

(3) Property is held under two separate leases — we are currently renewing the lease for the sorting and handling facility that expired
(3) Property is held under two separate leases — we are currently renewing the lease for the sorting and handling facility that expired
in April 2021 on a month-to-month basis while a new lease is being negotiated, and the lease for the ramp expansion expires in
in April 2021 on a month-to-month basis while a new lease is being negotiated, and the lease for the ramp expansion expires in
calendar 2025.
calendar 2025.

of office and dock space.

FedEx Services Segment

(4) Handles international express package and freight shipments to and from Asia, Europe and North America.
(4) Handles international express package and freight shipments to and from Asia, Europe and North America.

(5) Handles intra-Europe express package and freight shipments, as well as international express package and freight shipments to
(5) Handles intra-Europe express package and freight shipments, as well as international express package and freight shipments to

and from Europe.
and from Europe.

(6) Handles intra-Asia express package and freight shipments, as well as international express package and freight shipments to and
(6) Handles intra-Asia express package and freight shipments, as well as international express package and freight shipments to and

from Asia.
from Asia.

FedEx Express’s primary sorting facility, which serves as the center of its multiple hub-and-spoke system, is located at the Memphis
FedEx Express’s primary sorting facility, which serves as the center of its multiple hub-and-spoke system, is located at the Memphis
International Airport. FedEx Express’s facilities at the Memphis International Airport also include aircraft hangars, aircraft ramp
International Airport. FedEx Express’s facilities at the Memphis International Airport also include aircraft hangars, aircraft ramp
areas, vehicle parking areas, flight training and fuel facilities, the FedEx Cold Chain Center, administrative offices and warehouse
areas, vehicle parking areas, flight training and fuel facilities, the FedEx Cold Chain Center, administrative offices and warehouse
space.
space.

- 36 -
- 36 -

- 37 -

168

948,000

76,000

Fort Worth Alliance Airport

Newark, New Jersey

595,000

156,000

Port Authority of New York

Oakland, California

Greensboro, N. Carolina

165

587,700

593,000

63,000 Port of Oakland

23,000

Piedmont Triad Airport

Airport Authority

Authority

and New Jersey

Authority

Department of

Transportation and

Public Facilities

481,350

305,300

23,000 City of Chicago

57,000 City of Los Angeles

332,000

25,000

State of Alaska,

111

155

1,238,000

52,000 Aeroports de Paris

325,000

873,006

20,000 Cologne Bonn Airport

56,000

Guangdong Airport

Management Corp.

425,206

9,000 Kansai Airports

2036

2053

2028

2041

2030

2036

2031

2028

2025(3)

2023

2048

2040

2029

2024

(2) Handles international express package and freight shipments to and from Latin America and the Caribbean.

(3) Property is held under two separate leases — we are currently renewing the lease for the sorting and handling facility that expired

in April 2021 on a month-to-month basis while a new lease is being negotiated, and the lease for the ramp expansion expires in

Location

Primary

National

Indianapolis, Indiana

Miami, Florida(2)

Regional

Fort Worth, Texas

Metropolitan

Chicago, Illinois

Los Angeles, California

International

Anchorage, Alaska(4)

Paris, France(5)

Cologne, Germany(5)

Guangzhou, China(6)

Osaka, Japan(6)

(1) Documents and packages.

calendar 2025.

and from Europe.

from Asia.

Sorting and Handling Facilities

At May 31, 2021, FedEx Express operated the following major sorting and handling facilities:

Acres

Square

Feet

Sorting

Capacity

(per hour)(1)

Lessor

Lease

Expiration

Calendar Year

Memphis, Tennessee

800

3,607,973

484,000

Memphis-Shelby County

482

2,509,000

120,000

Indianapolis Airport

FedEx Express leases these facilities from the Memphis-Shelby County Airport Authority (the “Authority”). The lease obligates
FedEx Express leases these facilities from the Memphis-Shelby County Airport Authority (the “Authority”). The lease obligates
FedEx Express to maintain and insure the leased property and to pay all related taxes, assessments and other charges. The lease is
FedEx Express to maintain and insure the leased property and to pay all related taxes, assessments and other charges. The lease is
subordinate to, and FedEx Express’s rights thereunder could be affected by, any future lease or agreement between the Authority and
subordinate to, and FedEx Express’s rights thereunder could be affected by, any future lease or agreement between the Authority and
the U.S. government.
the U.S. government.

FedEx Express has additional major international sorting-and-handling facilities located at Narita Airport in Tokyo and Stansted
FedEx Express has additional major international sorting-and-handling facilities located at Narita Airport in Tokyo and Stansted
Airport outside London. FedEx Express also has a substantial presence at airports in Hong Kong, Taiwan and Dubai. TNT Express
Airport outside London. FedEx Express also has a substantial presence at airports in Hong Kong, Taiwan and Dubai. TNT Express
operates a central air hub near Liege, Belgium and a central European road hub in Duiven, The Netherlands. During 2020 we
operates a central air hub near Liege, Belgium and a central European road hub in Duiven, The Netherlands. During 2020 we
substantially completed projects across our European hub and station locations that allow interoperability between the ground
substantially completed projects across our European hub and station locations that allow interoperability between the ground
networks for both FedEx Express and TNT Express packages. We expect to complete the final phase of international air network
networks for both FedEx Express and TNT Express packages. We expect to complete the final phase of international air network
interoperability in early calendar 2022. See “Item 1. Business” under “FedEx Express Segment—International Expansion” for
interoperability in early calendar 2022. See “Item 1. Business” under “FedEx Express Segment—International Expansion” for
additional information on the integration of TNT Express.
additional information on the integration of TNT Express.

143,322

7,000 Aero Miami FX, LLC

Administrative and Other Properties and Facilities
Administrative and Other Properties and Facilities

The World Headquarters of FedEx Express is located in southeastern Shelby County, Tennessee. FedEx Express international
The World Headquarters of FedEx Express is located in southeastern Shelby County, Tennessee. FedEx Express international
headquarters are located in Hoofddorp, The Netherlands. As of May 31, 2021, FedEx Express owned or leased 656 facilities for city
headquarters are located in Hoofddorp, The Netherlands. As of May 31, 2021, FedEx Express owned or leased 656 facilities for city
station operations in the U.S. In addition, over 1,400 city stations are owned or leased throughout FedEx Express’s international
station operations in the U.S. In addition, over 1,400 city stations are owned or leased throughout FedEx Express’s international
network. The majority of these leases are for terms of five to ten years. City stations serve as a sorting and distribution center for a
network. The majority of these leases are for terms of five to ten years. City stations serve as a sorting and distribution center for a
particular city or region. We believe that suitable alternative facilities are available in each locale on satisfactory terms, if necessary.
particular city or region. We believe that suitable alternative facilities are available in each locale on satisfactory terms, if necessary.

As of May 31, 2021, FedEx Express had approximately 34,000 Drop Boxes. FedEx Express customers can also ship from
As of May 31, 2021, FedEx Express had approximately 34,000 Drop Boxes. FedEx Express customers can also ship from
approximately 35,000 staffed drop-off locations, including FedEx Office stores and FedEx Authorized ShipCenters. Internationally,
approximately 35,000 staffed drop-off locations, including FedEx Office stores and FedEx Authorized ShipCenters. Internationally,
FedEx Express had approximately 14,000 drop-off locations.
FedEx Express had approximately 14,000 drop-off locations.

FedEx Ground Segment
FedEx Ground Segment

FedEx Ground’s corporate headquarters are located in the Pittsburgh, Pennsylvania area. As of May 31, 2021, FedEx Ground owned
FedEx Ground’s corporate headquarters are located in the Pittsburgh, Pennsylvania area. As of May 31, 2021, FedEx Ground owned
or leased 625 facilities, including 40 hubs. In addition, approximately 96,000 vehicles owned or leased by service providers support
or leased 625 facilities, including 40 hubs. In addition, approximately 96,000 vehicles owned or leased by service providers support
FedEx Ground’s business. Of the 538 facilities that supported FedEx Home Delivery as of May 31, 2021, 511 were co-located with
FedEx Ground’s business. Of the 538 facilities that supported FedEx Home Delivery as of May 31, 2021, 511 were co-located with
existing FedEx Ground facilities. Leased facilities generally have terms of five years or less. The 40 hub facilities are strategically
existing FedEx Ground facilities. Leased facilities generally have terms of five years or less. The 40 hub facilities are strategically
located to cover the geographic area served by FedEx Ground. The hub facilities average approximately 475,000 square feet and range
located to cover the geographic area served by FedEx Ground. The hub facilities average approximately 475,000 square feet and range
in size from approximately 107,000 to 1,054,000 square feet.
in size from approximately 107,000 to 1,054,000 square feet.

FedEx Ground is adding new and expanded facilities and automation solutions to optimize FedEx Ground network capacity. See
FedEx Ground is adding new and expanded facilities and automation solutions to optimize FedEx Ground network capacity. See
“Item 1. Business—Business Segments—FedEx Ground Segment” of this Annual Report for additional information.
“Item 1. Business—Business Segments—FedEx Ground Segment” of this Annual Report for additional information.

FedEx Freight Segment
FedEx Freight Segment

FedEx Freight’s corporate headquarters are located in Memphis, Tennessee, with some administrative offices in Harrison, Arkansas.
FedEx Freight’s corporate headquarters are located in Memphis, Tennessee, with some administrative offices in Harrison, Arkansas.
As of May 31, 2021, FedEx Freight operated approximately 29,000 vehicles and nearly 400 service centers, which are strategically
As of May 31, 2021, FedEx Freight operated approximately 29,000 vehicles and nearly 400 service centers, which are strategically
located to provide service throughout North America. These facilities range in size from approximately 1,000 to 280,000 square feet
located to provide service throughout North America. These facilities range in size from approximately 1,000 to 280,000 square feet
of office and dock space.
of office and dock space.

FedEx Services Segment
FedEx Services Segment

(4) Handles international express package and freight shipments to and from Asia, Europe and North America.

(5) Handles intra-Europe express package and freight shipments, as well as international express package and freight shipments to

FedEx Services’ corporate headquarters are located in Memphis, Tennessee. FedEx Services leases state-of-the-art technology centers
FedEx Services’ corporate headquarters are located in Memphis, Tennessee. FedEx Services leases state-of-the-art technology centers
in Collierville, Tennessee and Colorado Springs, Colorado. These facilities house personnel responsible for strategic software
in Collierville, Tennessee and Colorado Springs, Colorado. These facilities house personnel responsible for strategic software
development and other functions that support FedEx’s technology and e-commerce solutions.
development and other functions that support FedEx’s technology and e-commerce solutions.

(6) Handles intra-Asia express package and freight shipments, as well as international express package and freight shipments to and

FedEx Express’s primary sorting facility, which serves as the center of its multiple hub-and-spoke system, is located at the Memphis

International Airport. FedEx Express’s facilities at the Memphis International Airport also include aircraft hangars, aircraft ramp

areas, vehicle parking areas, flight training and fuel facilities, the FedEx Cold Chain Center, administrative offices and warehouse

space.

The FedEx Authorized ShipCenter program offers U.S. domestic and international FedEx Express and FedEx Ground shipping and
The FedEx Authorized ShipCenter program offers U.S. domestic and international FedEx Express and FedEx Ground shipping and
drop-off services through a network of nearly 4,900 franchised and independent “pack and ship” retail locations. The FedEx OnSite
drop-off services through a network of nearly 4,900 franchised and independent “pack and ship” retail locations. The FedEx OnSite
network includes approximately 18,000 drop-off locations at Walgreens, Dollar General and Albertsons stores. Additionally, FedEx
network includes approximately 18,000 drop-off locations at Walgreens, Dollar General and Albertsons stores. Additionally, FedEx
Services has an agreement with Office Depot, Inc. to offer U.S. domestic and international FedEx Express and FedEx Ground
Services has an agreement with Office Depot, Inc. to offer U.S. domestic and international FedEx Express and FedEx Ground
shipping and drop-off services at Office Depot and OfficeMax retail locations (approximately 1,100 locations).
shipping and drop-off services at Office Depot and OfficeMax retail locations (approximately 1,100 locations).

- 36 -

- 37 -
- 37 -

FedEx Office Operating Segment
FedEx Office Operating Segment

FedEx Office’s corporate headquarters are located in Plano, Texas. As of May 31, 2021, FedEx Office operated approximately 2,200
FedEx Office’s corporate headquarters are located in Plano, Texas. As of May 31, 2021, FedEx Office operated approximately 2,200
customer-facing stores and 31 centralized production centers. Substantially all FedEx Office stores are leased, generally for terms of
customer-facing stores and 31 centralized production centers. Substantially all FedEx Office stores are leased, generally for terms of
five to ten years with varying renewal options. FedEx Office operates approximately 200 stores at hotels, convention centers,
five to ten years with varying renewal options. FedEx Office operates approximately 200 stores at hotels, convention centers,
hospitals, universities and corporate campuses, with the remainder generally located in strip malls, office buildings and stand-alone
hospitals, universities and corporate campuses, with the remainder generally located in strip malls, office buildings and stand-alone
structures. FedEx Office’s customer-facing stores average approximately 3,200 square feet in size. As of May 31, 2021, we operate
structures. FedEx Office’s customer-facing stores average approximately 3,200 square feet in size. As of May 31, 2021, we operate
over 340 FedEx Office locations inside Walmart stores.
over 340 FedEx Office locations inside Walmart stores.

FedEx Logistics Operating Segment
FedEx Logistics Operating Segment

FedEx Logistics’ corporate headquarters are located in Memphis, Tennessee. As of May 31, 2021, FedEx Trade Networks Transport
FedEx Logistics’ corporate headquarters are located in Memphis, Tennessee. As of May 31, 2021, FedEx Trade Networks Transport
& Brokerage had approximately 130 offices in 110 service locations throughout North America and in Africa, Asia-Pacific, Europe,
& Brokerage had approximately 130 offices in 110 service locations throughout North America and in Africa, Asia-Pacific, Europe,
India, Latin America, the Middle East and Australia/New Zealand. In addition, as of May 31, 2021, FedEx Supply Chain had
India, Latin America, the Middle East and Australia/New Zealand. In addition, as of May 31, 2021, FedEx Supply Chain had
approximately 110 facilities through which it operates its supply chain logistics services.
approximately 110 facilities through which it operates its supply chain logistics services.

ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS

FedEx and its subsidiaries are subject to legal proceedings and claims that arise in the ordinary course of their business. For a
FedEx and its subsidiaries are subject to legal proceedings and claims that arise in the ordinary course of their business. For a
description of certain pending legal proceedings, see Note 19 of the accompanying consolidated financial statements.
description of certain pending legal proceedings, see Note 19 of the accompanying consolidated financial statements.

ITEM 4. MINE SAFETY DISCLOSURES
ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.
Not applicable.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Information regarding executive officers of FedEx is as follows:

Name and Office

Age

Positions and Offices Held and Business Experience

Frederick W. Smith

76 Chairman of the Board and Chief Executive Officer of FedEx since January 1998;

Chairman of the Board and Chief

Chairman of the Board of FedEx Express since 1975; President of FedEx from January

Executive Officer

1998 to January 2017; Chairman of the Board, President and Chief Executive Officer of

FedEx Express from April 1983 to January 1998; Chief Executive Officer of FedEx

Express from 1977 to January 1998; and President of FedEx Express from June 1971 to

February 1975.

Mark R. Allen

Executive Vice President, General Counsel and Secretary of FedEx since October 2017;

Executive Vice President, General

Executive Vice President, General Counsel—Select of FedEx from September 2017 to

Counsel and Secretary

October 2017; Senior Vice President, Legal International of FedEx Express from July

2010 to September 2017; Vice President, Legal — Europe, Middle East, Africa and

Indian Subcontinent Region of FedEx Express from October 2000 to July 2010; Vice

President, Legal — Asia Pacific of FedEx Express from 1996 to October 2000; and

various legal positions with FedEx Express from 1982 to 1996.

Jill C. Brannon

Executive Vice President — Chief Sales Officer of FedEx since March 2019; Senior Vice

Executive Vice President — Chief

President, Sales — Europe, Middle East, Africa and Indian Subcontinent Region of

Sales Officer

FedEx Express from May 2016 to March 2019; Senior Vice President — Sales of FedEx

Services from July 2006 to May 2016; Vice President — Sales of FedEx Services from

July 2003 to June 2006; Vice President — Solutions of FedEx Services from July 2002 to

June 2003; Vice President — Marketing of FedEx Services from June 2001 to June 2002;

and various positions in sales, operations, marketing and strategic planning from 1985 to

May 2002.

Brie A. Carere

Executive Vice President — Chief Marketing and Communications Officer of FedEx

Executive Vice President — Chief

Marketing and Communications

since January 2019; Senior Vice President, Global Portfolio Marketing of FedEx Services

from October 2016 to December 2018; Vice President, Marketing, Customer Experience

Officer

and Corporate Communications for FedEx Express Canada from October 2010 to

October 2016; and various positions in marketing, customer experience and strategy with

FedEx Express Canada from 2001 to October 2010.

Robert B. Carter

Executive Vice President —

FedEx Information Services and

Chief Information Officer

Donald F. Colleran

President and Chief Executive

Officer, FedEx Express

Executive Vice President — FedEx Information Services and Chief Information Officer

of FedEx since January 2007; Executive Vice President and Chief Information Officer of

FedEx from June 2000 to January 2007; Corporate Vice President and Chief Technology

Officer of FedEx from February 1998 to June 2000; Vice President — Corporate Systems

Development of FedEx Express from September 1993 to February 1998; and Managing

Director — Systems Development of FedEx Express from April 1993 to September 1993.

Mr. Carter serves as a director of New York Life Insurance Company, a mutual life

insurance company.

President and Chief Executive Officer of FedEx Express since March 2019; Executive

Vice President — Chief Sales Officer of FedEx from January 2017 to March 2019;

Executive Vice President — Global Sales of FedEx Services from 2006 to January 2017;

Senior Vice President — International Sales from 2003 to 2006; Senior Vice President —

Canada of FedEx Express from 2000 to 2003; Vice President — Sales/APAC from 1997

to 2000; and various management positions in sales with FedEx Express from 1989 to

1997. Mr. Colleran serves as a director of ABM Industries Incorporated, a provider of

integrated facility solutions, and as a director of EastGroup Properties, Inc., an equity real

estate investment trust.

- 38 -
- 38 -

- 39 -

FedEx Office Operating Segment

INFORMATION ABOUT OUR EXECUTIVE OFFICERS
INFORMATION ABOUT OUR EXECUTIVE OFFICERS

FedEx Office’s corporate headquarters are located in Plano, Texas. As of May 31, 2021, FedEx Office operated approximately 2,200

Information regarding executive officers of FedEx is as follows:
Information regarding executive officers of FedEx is as follows:

customer-facing stores and 31 centralized production centers. Substantially all FedEx Office stores are leased, generally for terms of

five to ten years with varying renewal options. FedEx Office operates approximately 200 stores at hotels, convention centers,

hospitals, universities and corporate campuses, with the remainder generally located in strip malls, office buildings and stand-alone

structures. FedEx Office’s customer-facing stores average approximately 3,200 square feet in size. As of May 31, 2021, we operate

over 340 FedEx Office locations inside Walmart stores.

FedEx Logistics Operating Segment

FedEx Logistics’ corporate headquarters are located in Memphis, Tennessee. As of May 31, 2021, FedEx Trade Networks Transport

& Brokerage had approximately 130 offices in 110 service locations throughout North America and in Africa, Asia-Pacific, Europe,

India, Latin America, the Middle East and Australia/New Zealand. In addition, as of May 31, 2021, FedEx Supply Chain had

approximately 110 facilities through which it operates its supply chain logistics services.

FedEx and its subsidiaries are subject to legal proceedings and claims that arise in the ordinary course of their business. For a

description of certain pending legal proceedings, see Note 19 of the accompanying consolidated financial statements.

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

Name and Office
Name and Office

Age
Age

Positions and Offices Held and Business Experience
Positions and Offices Held and Business Experience

Frederick W. Smith
Frederick W. Smith
Chairman of the Board and Chief
Chairman of the Board and Chief
Executive Officer
Executive Officer

76 Chairman of the Board and Chief Executive Officer of FedEx since January 1998;
76 Chairman of the Board and Chief Executive Officer of FedEx since January 1998;

Chairman of the Board of FedEx Express since 1975; President of FedEx from January
Chairman of the Board of FedEx Express since 1975; President of FedEx from January
1998 to January 2017; Chairman of the Board, President and Chief Executive Officer of
1998 to January 2017; Chairman of the Board, President and Chief Executive Officer of
FedEx Express from April 1983 to January 1998; Chief Executive Officer of FedEx
FedEx Express from April 1983 to January 1998; Chief Executive Officer of FedEx
Express from 1977 to January 1998; and President of FedEx Express from June 1971 to
Express from 1977 to January 1998; and President of FedEx Express from June 1971 to
February 1975.
February 1975.

Mark R. Allen
Mark R. Allen
Executive Vice President, General
Executive Vice President, General
Counsel and Secretary
Counsel and Secretary

65
65

Jill C. Brannon
Jill C. Brannon
Executive Vice President — Chief
Executive Vice President — Chief
Sales Officer
Sales Officer

58
58

Executive Vice President, General Counsel and Secretary of FedEx since October 2017;
Executive Vice President, General Counsel and Secretary of FedEx since October 2017;
Executive Vice President, General Counsel—Select of FedEx from September 2017 to
Executive Vice President, General Counsel—Select of FedEx from September 2017 to
October 2017; Senior Vice President, Legal International of FedEx Express from July
October 2017; Senior Vice President, Legal International of FedEx Express from July
2010 to September 2017; Vice President, Legal — Europe, Middle East, Africa and
2010 to September 2017; Vice President, Legal — Europe, Middle East, Africa and
Indian Subcontinent Region of FedEx Express from October 2000 to July 2010; Vice
Indian Subcontinent Region of FedEx Express from October 2000 to July 2010; Vice
President, Legal — Asia Pacific of FedEx Express from 1996 to October 2000; and
President, Legal — Asia Pacific of FedEx Express from 1996 to October 2000; and
various legal positions with FedEx Express from 1982 to 1996.
various legal positions with FedEx Express from 1982 to 1996.

Executive Vice President — Chief Sales Officer of FedEx since March 2019; Senior Vice
Executive Vice President — Chief Sales Officer of FedEx since March 2019; Senior Vice
President, Sales — Europe, Middle East, Africa and Indian Subcontinent Region of
President, Sales — Europe, Middle East, Africa and Indian Subcontinent Region of
FedEx Express from May 2016 to March 2019; Senior Vice President — Sales of FedEx
FedEx Express from May 2016 to March 2019; Senior Vice President — Sales of FedEx
Services from July 2006 to May 2016; Vice President — Sales of FedEx Services from
Services from July 2006 to May 2016; Vice President — Sales of FedEx Services from
July 2003 to June 2006; Vice President — Solutions of FedEx Services from July 2002 to
July 2003 to June 2006; Vice President — Solutions of FedEx Services from July 2002 to
June 2003; Vice President — Marketing of FedEx Services from June 2001 to June 2002;
June 2003; Vice President — Marketing of FedEx Services from June 2001 to June 2002;
and various positions in sales, operations, marketing and strategic planning from 1985 to
and various positions in sales, operations, marketing and strategic planning from 1985 to
May 2002.
May 2002.

Brie A. Carere
Brie A. Carere
Executive Vice President — Chief
Executive Vice President — Chief
Marketing and Communications
Marketing and Communications
Officer
Officer

Robert B. Carter
Robert B. Carter
Executive Vice President —
Executive Vice President —
FedEx Information Services and
FedEx Information Services and
Chief Information Officer
Chief Information Officer

Donald F. Colleran
Donald F. Colleran
President and Chief Executive
President and Chief Executive
Officer, FedEx Express
Officer, FedEx Express

43
43

62
62

65
65

Executive Vice President — Chief Marketing and Communications Officer of FedEx
Executive Vice President — Chief Marketing and Communications Officer of FedEx
since January 2019; Senior Vice President, Global Portfolio Marketing of FedEx Services
since January 2019; Senior Vice President, Global Portfolio Marketing of FedEx Services
from October 2016 to December 2018; Vice President, Marketing, Customer Experience
from October 2016 to December 2018; Vice President, Marketing, Customer Experience
and Corporate Communications for FedEx Express Canada from October 2010 to
and Corporate Communications for FedEx Express Canada from October 2010 to
October 2016; and various positions in marketing, customer experience and strategy with
October 2016; and various positions in marketing, customer experience and strategy with
FedEx Express Canada from 2001 to October 2010.
FedEx Express Canada from 2001 to October 2010.

Executive Vice President — FedEx Information Services and Chief Information Officer
Executive Vice President — FedEx Information Services and Chief Information Officer
of FedEx since January 2007; Executive Vice President and Chief Information Officer of
of FedEx since January 2007; Executive Vice President and Chief Information Officer of
FedEx from June 2000 to January 2007; Corporate Vice President and Chief Technology
FedEx from June 2000 to January 2007; Corporate Vice President and Chief Technology
Officer of FedEx from February 1998 to June 2000; Vice President — Corporate Systems
Officer of FedEx from February 1998 to June 2000; Vice President — Corporate Systems
Development of FedEx Express from September 1993 to February 1998; and Managing
Development of FedEx Express from September 1993 to February 1998; and Managing
Director — Systems Development of FedEx Express from April 1993 to September 1993.
Director — Systems Development of FedEx Express from April 1993 to September 1993.
Mr. Carter serves as a director of New York Life Insurance Company, a mutual life
Mr. Carter serves as a director of New York Life Insurance Company, a mutual life
insurance company.
insurance company.

President and Chief Executive Officer of FedEx Express since March 2019; Executive
President and Chief Executive Officer of FedEx Express since March 2019; Executive
Vice President — Chief Sales Officer of FedEx from January 2017 to March 2019;
Vice President — Chief Sales Officer of FedEx from January 2017 to March 2019;
Executive Vice President — Global Sales of FedEx Services from 2006 to January 2017;
Executive Vice President — Global Sales of FedEx Services from 2006 to January 2017;
Senior Vice President — International Sales from 2003 to 2006; Senior Vice President —
Senior Vice President — International Sales from 2003 to 2006; Senior Vice President —
Canada of FedEx Express from 2000 to 2003; Vice President — Sales/APAC from 1997
Canada of FedEx Express from 2000 to 2003; Vice President — Sales/APAC from 1997
to 2000; and various management positions in sales with FedEx Express from 1989 to
to 2000; and various management positions in sales with FedEx Express from 1989 to
1997. Mr. Colleran serves as a director of ABM Industries Incorporated, a provider of
1997. Mr. Colleran serves as a director of ABM Industries Incorporated, a provider of
integrated facility solutions, and as a director of EastGroup Properties, Inc., an equity real
integrated facility solutions, and as a director of EastGroup Properties, Inc., an equity real
estate investment trust.
estate investment trust.

- 38 -

- 39 -
- 39 -

Name and Office
Name and Office

Michael C. Lenz
Michael C. Lenz
Executive Vice President and
Executive Vice President and
Chief Financial Officer
Chief Financial Officer

Age
Age

57
57

Lance D. Moll
Lance D. Moll
President and Chief Executive
President and Chief Executive
Officer, FedEx Freight
Officer, FedEx Freight

John A. Smith
John A. Smith
President and Chief Executive
President and Chief Executive
Officer, FedEx Ground
Officer, FedEx Ground

51
51

59
59

Rajesh Subramaniam
Rajesh Subramaniam
President and Chief Operating
President and Chief Operating
Officer and Director
Officer and Director

55
55

Positions and Offices Held and Business Experience
Positions and Offices Held and Business Experience

PART II

Executive Vice President and Chief Financial Officer of FedEx since September 2020;
Executive Vice President and Chief Financial Officer of FedEx since September 2020;
Executive Vice President and Chief Financial Officer—Elect of FedEx from June 2020 to
Executive Vice President and Chief Financial Officer—Elect of FedEx from June 2020 to
September 2020; Corporate Vice President and Treasurer of FedEx from February 2012
September 2020; Corporate Vice President and Treasurer of FedEx from February 2012
to May 2020; Staff Vice President — Strategic Finance of FedEx from 2010 to February
to May 2020; Staff Vice President — Strategic Finance of FedEx from 2010 to February
2012; Vice President — Finance of FedEx Office from 2005 to 2010; and various
2012; Vice President — Finance of FedEx Office from 2005 to 2010; and various
positions in several finance and commercial areas including investor relations, financial
positions in several finance and commercial areas including investor relations, financial
planning and analysis, international planning and fleet planning at American Airlines, Inc.
planning and analysis, international planning and fleet planning at American Airlines, Inc.
from 1994 to 2005.
from 1994 to 2005.

President and Chief Executive Officer of FedEx Freight since March 2021; Senior Vice
President and Chief Executive Officer of FedEx Freight since March 2021; Senior Vice
President — Operations of FedEx Freight from May 2018 to February 2021; Vice
President — Operations of FedEx Freight from May 2018 to February 2021; Vice
President — Regional Operations of FedEx Freight from February 2015 to May 2018;
President — Regional Operations of FedEx Freight from February 2015 to May 2018;
Managing Director — District Operations of FedEx Freight from June 2003 to January
Managing Director — District Operations of FedEx Freight from June 2003 to January
2015; and various positions with FedEx Freight from 1992 to 2003.
2015; and various positions with FedEx Freight from 1992 to 2003.

President and Chief Executive Officer of FedEx Ground since June 2021; President and
President and Chief Executive Officer of FedEx Ground since June 2021; President and
Chief Executive Officer—Elect of FedEx Ground from March 2021 to May 2021;
Chief Executive Officer—Elect of FedEx Ground from March 2021 to May 2021;
President and Chief Executive Officer of FedEx Freight from August 2018 to February
President and Chief Executive Officer of FedEx Freight from August 2018 to February
2021; President and Chief Executive Officer—Select of FedEx Freight from May 2018 to
2021; President and Chief Executive Officer—Select of FedEx Freight from May 2018 to
August 2018; Senior Vice President — Operations of FedEx Freight from May 2015 to
August 2018; Senior Vice President — Operations of FedEx Freight from May 2015 to
May 2018; Vice President — Safety, Fleet Maintenance and Facilities Services of FedEx
May 2018; Vice President — Safety, Fleet Maintenance and Facilities Services of FedEx
Freight from June 2011 to May 2015; Vice President — Operations of FedEx National
Freight from June 2011 to May 2015; Vice President — Operations of FedEx National
LTL, Inc. from April 2010 to June 2011; Vice President — Transportation/Fleet
LTL, Inc. from April 2010 to June 2011; Vice President — Transportation/Fleet
Maintenance of FedEx National LTL, Inc. from March 2008 to April 2010; and various
Maintenance of FedEx National LTL, Inc. from March 2008 to April 2010; and various
management positions at FedEx Freight from 2000 to 2008.
management positions at FedEx Freight from 2000 to 2008.

President and Chief Operating Officer of FedEx since March 2019 and director of FedEx
President and Chief Operating Officer of FedEx since March 2019 and director of FedEx
since January 2020; President and Chief Executive Officer of FedEx Express from
since January 2020; President and Chief Executive Officer of FedEx Express from
January 2019 to March 2019; Executive Vice President — Chief Marketing and
January 2019 to March 2019; Executive Vice President — Chief Marketing and
Communications Officer of FedEx from January 2017 to December 2018; Executive Vice
Communications Officer of FedEx from January 2017 to December 2018; Executive Vice
President — Marketing & Communications of FedEx Services from 2013 to January
President — Marketing & Communications of FedEx Services from 2013 to January
2017; Senior Vice President — Marketing from 2006 to 2013; Senior Vice President —
2017; Senior Vice President — Marketing from 2006 to 2013; Senior Vice President —
Canada of FedEx Express from 2003 to 2006; Vice President — Marketing/APAC of
Canada of FedEx Express from 2003 to 2006; Vice President — Marketing/APAC of
FedEx Express from 2000 to 2003; Vice President — APAC, EC & CS of FedEx Express
FedEx Express from 2000 to 2003; Vice President — APAC, EC & CS of FedEx Express
from 1999 to 2000; and various management and marketing analyst positions at FedEx
from 1999 to 2000; and various management and marketing analyst positions at FedEx
Express from 1991 to 1999. Mr. Subramaniam serves as a director of First Horizon
Express from 1991 to 1999. Mr. Subramaniam serves as a director of First Horizon
Corporation, a financial holding company.
Corporation, a financial holding company.

Executive officers are elected by, and serve at the discretion of, the Board of Directors. There is no arrangement or understanding
Executive officers are elected by, and serve at the discretion of, the Board of Directors. There is no arrangement or understanding
between any executive officer and any person, other than a director or executive officer of FedEx or of any of its subsidiaries acting
between any executive officer and any person, other than a director or executive officer of FedEx or of any of its subsidiaries acting
solely in his or her official capacity, pursuant to which any executive officer was selected. There are no family relationships between
solely in his or her official capacity, pursuant to which any executive officer was selected. There are no family relationships between
any executive officer and any other executive officer or director of FedEx, or any person nominated or chosen to become a director or
any executive officer and any other executive officer or director of FedEx, or any person nominated or chosen to become a director or
executive officer.
executive officer.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES

FedEx’s common stock is listed on the New York Stock Exchange under the symbol “FDX.” As of July 15, 2021, there were 11,600

holders of record of our common stock.

We expect to continue to pay regular quarterly cash dividends, though each quarterly dividend payment is subject to review and

approval by our Board of Directors. We evaluate our dividend payment amount on an annual basis.

Effective March 16, 2021, our amended and restated $2.0 billion five-year credit agreement and $1.5 billion 364-day credit agreement

(together, the “Credit Agreements”) no longer contain the temporary covenant added in the fourth quarter of 2020 restricting us from

increasing the amount of our quarterly dividend payable per share of common stock from $0.65 per share and repurchasing any shares

of our common stock. See Note 7 of the accompanying consolidated financial statements included in “Item 8. Financial Statements

and Supplementary Data” of this Annual Report for additional information regarding the Credit Agreements. There are no material

restrictions on our ability to declare dividends, nor are there any material restrictions on the ability of our subsidiaries to transfer funds

to us in the form of cash dividends, loans or advances.

We did not repurchase any shares of FedEx common stock during the fourth quarter of 2021, and as of May 31, 2021 5.1 million

shares remained authorized for purchase under our stock repurchase program. On January 26, 2016, we announced a stock repurchase

program approved by our Board of Directors, through which we are authorized to purchase, in the open market or in privately

negotiated transactions, up to an aggregate of 25 million shares of our common stock. The program, which is the only such program

that currently exists, does not have an expiration date. See Note 1 of the accompanying consolidated financial statements included in

“Item 8. Financial Statements and Supplementary Data” of this Annual Report for further discussion.

During the first quarter of 2022, we resumed repurchases under the January 2016 stock repurchase program. As of July 15, 2021, 4.9

million shares remained authorized for purchase under the program.

ITEM 6. SELECTED FINANCIAL DATA

The information required by Item 301 and Item 302 of Regulation S-K has been omitted as we have elected to early adopt the changes

to Item 301 and Item 302 of Regulation S-K contained in SEC Release No. 33-10890.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL

CONDITION

ORGANIZATION OF INFORMATION

This Management’s Discussion and Analysis of Results of Operations and Financial Condition (“MD&A”) of FedEx Corporation

(“FedEx” or the “Company”) is composed of three major sections: Results of Operations and Outlook, Financial Condition and

Critical Accounting Estimates. These sections include the following information:

• Results of operations includes an overview of our consolidated 2021 results compared to 2020 results. This section also includes a

discussion of key actions and events that impacted our results, as well as our outlook for 2022. Discussion and analysis of 2019

results and year-over-year comparisons between 2020 results and 2019 results can be found in “Item 7. Management’s Discussion

and Analysis of Results of Operations and Financial Condition” of our Annual Report on Form 10-K (“Annual Report”) for the

year ended May 31, 2020.

• The overview is followed by a financial summary and analysis (including a discussion of both historical operating results and

our outlook for 2022) for each of our transportation segments.

• Our financial condition is reviewed through an analysis of key elements of our liquidity, capital resources and contractual cash

obligations, including a discussion of our cash flows, our financial commitments and our liquidity outlook for 2022.

• Critical accounting estimates discusses those financial statement elements that we believe are most important to understanding

the material judgments and assumptions incorporated in our financial results.

The discussion in MD&A should be read in conjunction with the other sections of this Annual Report, particularly “Item 1. Business,”

“Item 1A. Risk Factors” and “Item 8. Financial Statements and Supplementary Data.”

- 40 -
- 40 -

- 41 -

Name and Office

Age

Positions and Offices Held and Business Experience

PART II
PART II

Michael C. Lenz

Executive Vice President and

Chief Financial Officer

Lance D. Moll

President and Chief Executive

Officer, FedEx Freight

John A. Smith

President and Chief Executive

Officer, FedEx Ground

Rajesh Subramaniam

President and Chief Operating

Officer and Director

Executive Vice President and Chief Financial Officer of FedEx since September 2020;

Executive Vice President and Chief Financial Officer—Elect of FedEx from June 2020 to

September 2020; Corporate Vice President and Treasurer of FedEx from February 2012

to May 2020; Staff Vice President — Strategic Finance of FedEx from 2010 to February

2012; Vice President — Finance of FedEx Office from 2005 to 2010; and various

positions in several finance and commercial areas including investor relations, financial

planning and analysis, international planning and fleet planning at American Airlines, Inc.

from 1994 to 2005.

President and Chief Executive Officer of FedEx Freight since March 2021; Senior Vice

President — Operations of FedEx Freight from May 2018 to February 2021; Vice

President — Regional Operations of FedEx Freight from February 2015 to May 2018;

Managing Director — District Operations of FedEx Freight from June 2003 to January

2015; and various positions with FedEx Freight from 1992 to 2003.

President and Chief Executive Officer of FedEx Ground since June 2021; President and

Chief Executive Officer—Elect of FedEx Ground from March 2021 to May 2021;

President and Chief Executive Officer of FedEx Freight from August 2018 to February

2021; President and Chief Executive Officer—Select of FedEx Freight from May 2018 to

August 2018; Senior Vice President — Operations of FedEx Freight from May 2015 to

May 2018; Vice President — Safety, Fleet Maintenance and Facilities Services of FedEx

Freight from June 2011 to May 2015; Vice President — Operations of FedEx National

LTL, Inc. from April 2010 to June 2011; Vice President — Transportation/Fleet

Maintenance of FedEx National LTL, Inc. from March 2008 to April 2010; and various

management positions at FedEx Freight from 2000 to 2008.

President and Chief Operating Officer of FedEx since March 2019 and director of FedEx

since January 2020; President and Chief Executive Officer of FedEx Express from

January 2019 to March 2019; Executive Vice President — Chief Marketing and

Communications Officer of FedEx from January 2017 to December 2018; Executive Vice

President — Marketing & Communications of FedEx Services from 2013 to January

2017; Senior Vice President — Marketing from 2006 to 2013; Senior Vice President —

Canada of FedEx Express from 2003 to 2006; Vice President — Marketing/APAC of

FedEx Express from 2000 to 2003; Vice President — APAC, EC & CS of FedEx Express

from 1999 to 2000; and various management and marketing analyst positions at FedEx

Express from 1991 to 1999. Mr. Subramaniam serves as a director of First Horizon

Corporation, a financial holding company.

Executive officers are elected by, and serve at the discretion of, the Board of Directors. There is no arrangement or understanding

between any executive officer and any person, other than a director or executive officer of FedEx or of any of its subsidiaries acting

solely in his or her official capacity, pursuant to which any executive officer was selected. There are no family relationships between

any executive officer and any other executive officer or director of FedEx, or any person nominated or chosen to become a director or

executive officer.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
PURCHASES OF EQUITY SECURITIES

FedEx’s common stock is listed on the New York Stock Exchange under the symbol “FDX.” As of July 15, 2021, there were 11,600
FedEx’s common stock is listed on the New York Stock Exchange under the symbol “FDX.” As of July 15, 2021, there were 11,600
holders of record of our common stock.
holders of record of our common stock.

We expect to continue to pay regular quarterly cash dividends, though each quarterly dividend payment is subject to review and
We expect to continue to pay regular quarterly cash dividends, though each quarterly dividend payment is subject to review and
approval by our Board of Directors. We evaluate our dividend payment amount on an annual basis.
approval by our Board of Directors. We evaluate our dividend payment amount on an annual basis.

Effective March 16, 2021, our amended and restated $2.0 billion five-year credit agreement and $1.5 billion 364-day credit agreement
Effective March 16, 2021, our amended and restated $2.0 billion five-year credit agreement and $1.5 billion 364-day credit agreement
(together, the “Credit Agreements”) no longer contain the temporary covenant added in the fourth quarter of 2020 restricting us from
(together, the “Credit Agreements”) no longer contain the temporary covenant added in the fourth quarter of 2020 restricting us from
increasing the amount of our quarterly dividend payable per share of common stock from $0.65 per share and repurchasing any shares
increasing the amount of our quarterly dividend payable per share of common stock from $0.65 per share and repurchasing any shares
of our common stock. See Note 7 of the accompanying consolidated financial statements included in “Item 8. Financial Statements
of our common stock. See Note 7 of the accompanying consolidated financial statements included in “Item 8. Financial Statements
and Supplementary Data” of this Annual Report for additional information regarding the Credit Agreements. There are no material
and Supplementary Data” of this Annual Report for additional information regarding the Credit Agreements. There are no material
restrictions on our ability to declare dividends, nor are there any material restrictions on the ability of our subsidiaries to transfer funds
restrictions on our ability to declare dividends, nor are there any material restrictions on the ability of our subsidiaries to transfer funds
to us in the form of cash dividends, loans or advances.
to us in the form of cash dividends, loans or advances.

We did not repurchase any shares of FedEx common stock during the fourth quarter of 2021, and as of May 31, 2021 5.1 million
We did not repurchase any shares of FedEx common stock during the fourth quarter of 2021, and as of May 31, 2021 5.1 million
shares remained authorized for purchase under our stock repurchase program. On January 26, 2016, we announced a stock repurchase
shares remained authorized for purchase under our stock repurchase program. On January 26, 2016, we announced a stock repurchase
program approved by our Board of Directors, through which we are authorized to purchase, in the open market or in privately
program approved by our Board of Directors, through which we are authorized to purchase, in the open market or in privately
negotiated transactions, up to an aggregate of 25 million shares of our common stock. The program, which is the only such program
negotiated transactions, up to an aggregate of 25 million shares of our common stock. The program, which is the only such program
that currently exists, does not have an expiration date. See Note 1 of the accompanying consolidated financial statements included in
that currently exists, does not have an expiration date. See Note 1 of the accompanying consolidated financial statements included in
“Item 8. Financial Statements and Supplementary Data” of this Annual Report for further discussion.
“Item 8. Financial Statements and Supplementary Data” of this Annual Report for further discussion.

During the first quarter of 2022, we resumed repurchases under the January 2016 stock repurchase program. As of July 15, 2021, 4.9
During the first quarter of 2022, we resumed repurchases under the January 2016 stock repurchase program. As of July 15, 2021, 4.9
million shares remained authorized for purchase under the program.
million shares remained authorized for purchase under the program.

ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA

The information required by Item 301 and Item 302 of Regulation S-K has been omitted as we have elected to early adopt the changes
The information required by Item 301 and Item 302 of Regulation S-K has been omitted as we have elected to early adopt the changes
to Item 301 and Item 302 of Regulation S-K contained in SEC Release No. 33-10890.
to Item 301 and Item 302 of Regulation S-K contained in SEC Release No. 33-10890.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
CONDITION

ORGANIZATION OF INFORMATION
ORGANIZATION OF INFORMATION

This Management’s Discussion and Analysis of Results of Operations and Financial Condition (“MD&A”) of FedEx Corporation
This Management’s Discussion and Analysis of Results of Operations and Financial Condition (“MD&A”) of FedEx Corporation
(“FedEx” or the “Company”) is composed of three major sections: Results of Operations and Outlook, Financial Condition and
(“FedEx” or the “Company”) is composed of three major sections: Results of Operations and Outlook, Financial Condition and
Critical Accounting Estimates. These sections include the following information:
Critical Accounting Estimates. These sections include the following information:

• Results of operations includes an overview of our consolidated 2021 results compared to 2020 results. This section also includes a
• Results of operations includes an overview of our consolidated 2021 results compared to 2020 results. This section also includes a
discussion of key actions and events that impacted our results, as well as our outlook for 2022. Discussion and analysis of 2019
discussion of key actions and events that impacted our results, as well as our outlook for 2022. Discussion and analysis of 2019
results and year-over-year comparisons between 2020 results and 2019 results can be found in “Item 7. Management’s Discussion
results and year-over-year comparisons between 2020 results and 2019 results can be found in “Item 7. Management’s Discussion
and Analysis of Results of Operations and Financial Condition” of our Annual Report on Form 10-K (“Annual Report”) for the
and Analysis of Results of Operations and Financial Condition” of our Annual Report on Form 10-K (“Annual Report”) for the
year ended May 31, 2020.
year ended May 31, 2020.

• The overview is followed by a financial summary and analysis (including a discussion of both historical operating results and
• The overview is followed by a financial summary and analysis (including a discussion of both historical operating results and

our outlook for 2022) for each of our transportation segments.
our outlook for 2022) for each of our transportation segments.

• Our financial condition is reviewed through an analysis of key elements of our liquidity, capital resources and contractual cash
• Our financial condition is reviewed through an analysis of key elements of our liquidity, capital resources and contractual cash

obligations, including a discussion of our cash flows, our financial commitments and our liquidity outlook for 2022.
obligations, including a discussion of our cash flows, our financial commitments and our liquidity outlook for 2022.

• Critical accounting estimates discusses those financial statement elements that we believe are most important to understanding
• Critical accounting estimates discusses those financial statement elements that we believe are most important to understanding

the material judgments and assumptions incorporated in our financial results.
the material judgments and assumptions incorporated in our financial results.

The discussion in MD&A should be read in conjunction with the other sections of this Annual Report, particularly “Item 1. Business,”
The discussion in MD&A should be read in conjunction with the other sections of this Annual Report, particularly “Item 1. Business,”
“Item 1A. Risk Factors” and “Item 8. Financial Statements and Supplementary Data.”
“Item 1A. Risk Factors” and “Item 8. Financial Statements and Supplementary Data.”

- 40 -

- 41 -
- 41 -

DESCRIPTION OF BUSINESS SEGMENTS
DESCRIPTION OF BUSINESS SEGMENTS

We provide a broad portfolio of transportation, e-commerce and business services through companies competing collectively,
We provide a broad portfolio of transportation, e-commerce and business services through companies competing collectively,
operating collaboratively and innovating digitally, under the respected FedEx brand. Our primary operating companies are Federal
operating collaboratively and innovating digitally, under the respected FedEx brand. Our primary operating companies are Federal
Express Corporation (“FedEx Express”), the world’s largest express transportation company; FedEx Ground Package System, Inc.
Express Corporation (“FedEx Express”), the world’s largest express transportation company; FedEx Ground Package System, Inc.
(“FedEx Ground”), a leading North American provider of small-package ground delivery services; and FedEx Freight Corporation
(“FedEx Ground”), a leading North American provider of small-package ground delivery services; and FedEx Freight Corporation
(“FedEx Freight”), a leading North American provider of less-than-truckload (“LTL”) freight transportation services. These
(“FedEx Freight”), a leading North American provider of less-than-truckload (“LTL”) freight transportation services. These
companies represent our major service lines and, along with FedEx Corporate Services, Inc. (“FedEx Services”), constitute our
companies represent our major service lines and, along with FedEx Corporate Services, Inc. (“FedEx Services”), constitute our
reportable segments. Our FedEx Services segment provides sales, marketing, information technology, communications, customer
reportable segments. Our FedEx Services segment provides sales, marketing, information technology, communications, customer
service, technical support, billing and collection services, and certain back-office functions that support our operating segments. The
service, technical support, billing and collection services, and certain back-office functions that support our operating segments. The
operating costs of the FedEx Services segment are allocated to the business units it serves. See “Reportable Segments” for further
operating costs of the FedEx Services segment are allocated to the business units it serves. See “Reportable Segments” for further
discussion and refer to “Item 1. Business” for a more detailed description of each of our operating companies.
discussion and refer to “Item 1. Business” for a more detailed description of each of our operating companies.

The key indicators necessary to understand our operating results include:
The key indicators necessary to understand our operating results include:

•
•

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

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

the mix of services purchased by our customers;
the mix of services purchased by our customers;

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

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

The following table shows changes in revenue and operating results by reportable segment for 2021 compared to 2020 (in millions):

•
•

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

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

Except as otherwise specified, references to years indicate our fiscal year ended May 31, 2021 or ended May 31 of the year referenced
Except as otherwise specified, references to years indicate our fiscal year ended May 31, 2021 or ended May 31 of the year referenced
and comparisons are to the corresponding period of the prior year. References to our transportation segments include, collectively, the
and comparisons are to the corresponding period of the prior year. References to our transportation segments include, collectively, the
FedEx Express segment, the FedEx Ground segment and the FedEx Freight segment.
FedEx Express segment, the FedEx Ground segment and the FedEx Freight segment.

RESULTS OF OPERATIONS AND OUTLOOK

CONSOLIDATED RESULTS

The following table compares summary operating results (dollars in millions, except per share amounts) for the years ended May 31:

Consolidated revenue

Operating income (loss):

FedEx Express segment

FedEx Ground segment

FedEx Freight segment

Corporate, other and eliminations

Consolidated operating income

Operating margin:

FedEx Express segment

FedEx Ground segment

FedEx Freight segment

Consolidated operating margin

Consolidated net income

Diluted earnings per share

FedEx Express segment

FedEx Ground segment

FedEx Freight segment

FedEx Services segment

Corporate, other and eliminations

for the years ended May 31:

182

142

390 bp

160 bp

460 bp

350 bp

307

297

1,814

1,179

425

—

3,440

2021(1)

2020(1)

Percent Change

83,959 $

69,217

2,810

3,193

1,005

(1,151 )

5,857

6.7 %

10.5 %

12.8 %

7.0 %

5,231 $

19.45 $

996

2,014

580

(1,173 )

2,417

2.8 %

8.9 %

8.2 %

3.5 %

1,286

4.90

Year-over-Year Changes

Revenue

Operating Results(1)

6,565 $

7,763

731

(327 )

14,742 $

2021

2020

(210 )

(116 )

—

(326 )

(270 )

—

(435 )

(705 )

895

(297 )

598

(583 )

—

(583 )

(1) The following is a summary of the effects of the (costs) benefits of certain key items affecting our financial results (in millions)

Items affecting Operating Income:

TNT Express integration expenses

Business realignment costs

Goodwill and other asset impairment charges

Items affecting Net Income:

Mark-to-market (“MTM”) retirement plans accounting

adjustments, net of tax

Loss on debt extinguishment, net of tax

Overview

Volume growth, reflecting increased e-commerce demand accelerated by the coronavirus (“COVID-19”) pandemic, as well as yield

improvement related to pricing initiatives, drove strong revenue and operating income growth in 2021. Increased operating expenses

to support unprecedented levels of demand for our services in the COVID-19 pandemic environment, including higher labor costs,

costs related to operating our air network to support higher demand in key international supply chains and higher costs associated with

operating our seven-day-per-week network at FedEx Ground, were incurred in 2021. See the “Impact of the COVID-19 Pandemic”

section below for further information regarding the pandemic’s impact on our business.

- 42 -
- 42 -

- 43 -

operating collaboratively and innovating digitally, under the respected FedEx brand. Our primary operating companies are Federal

Express Corporation (“FedEx Express”), the world’s largest express transportation company; FedEx Ground Package System, Inc.

(“FedEx Ground”), a leading North American provider of small-package ground delivery services; and FedEx Freight Corporation

(“FedEx Freight”), a leading North American provider of less-than-truckload (“LTL”) freight transportation services. These

companies represent our major service lines and, along with FedEx Corporate Services, Inc. (“FedEx Services”), constitute our

reportable segments. Our FedEx Services segment provides sales, marketing, information technology, communications, customer

service, technical support, billing and collection services, and certain back-office functions that support our operating segments. The

operating costs of the FedEx Services segment are allocated to the business units it serves. See “Reportable Segments” for further

discussion and refer to “Item 1. Business” for a more detailed description of each of our operating companies.

The key indicators necessary to understand our operating results include:

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

the volumes of transportation services provided through our networks, primarily measured by our average daily volume and

•

shipment weight and size;

the mix of services purchased by our customers;

the prices we obtain for our services, primarily measured by yield (revenue per package or pound or revenue per shipment or

hundredweight for LTL freight shipments);

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

•

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

surcharges.

Many of our operating expenses are directly impacted by revenue and volume levels, and we expect these operating expenses to

fluctuate on a year-over-year basis consistent with changes in revenue and volumes. Therefore, the discussion of operating expense

captions focuses on the key drivers and trends impacting expenses other than those factors strictly related to changes in revenue and

volumes. The line item “Other operating expense” includes costs associated with outside service contracts (such as facility services

and cargo handling, temporary labor and security), insurance, professional fees and uniforms.

Except as otherwise specified, references to years indicate our fiscal year ended May 31, 2021 or ended May 31 of the year referenced

and comparisons are to the corresponding period of the prior year. References to our transportation segments include, collectively, the

FedEx Express segment, the FedEx Ground segment and the FedEx Freight segment.

DESCRIPTION OF BUSINESS SEGMENTS

RESULTS OF OPERATIONS AND OUTLOOK
RESULTS OF OPERATIONS AND OUTLOOK

We provide a broad portfolio of transportation, e-commerce and business services through companies competing collectively,

CONSOLIDATED RESULTS
CONSOLIDATED RESULTS

The following table compares summary operating results (dollars in millions, except per share amounts) for the years ended May 31:
The following table compares summary operating results (dollars in millions, except per share amounts) for the years ended May 31:

Consolidated revenue
Consolidated revenue
Operating income (loss):
Operating income (loss):

FedEx Express segment
FedEx Express segment
FedEx Ground segment
FedEx Ground segment
FedEx Freight segment
FedEx Freight segment
Corporate, other and eliminations
Corporate, other and eliminations

Consolidated operating income
Consolidated operating income
Operating margin:
Operating margin:

FedEx Express segment
FedEx Express segment
FedEx Ground segment
FedEx Ground segment
FedEx Freight segment
FedEx Freight segment
Consolidated operating margin
Consolidated operating margin
Consolidated net income
Consolidated net income
Diluted earnings per share
Diluted earnings per share

2021(1)
2021(1)

2020(1)
2020(1)

$
$

83,959 $
83,959 $

Percent Change
Percent Change
21
21

69,217
69,217

2,810
2,810
3,193
3,193
1,005
1,005
(1,151 )
(1,151 )
5,857
5,857

6.7 %
6.7 %
10.5 %
10.5 %
12.8 %
12.8 %
7.0 %
7.0 %
5,231 $
5,231 $
19.45 $
19.45 $

996
996
2,014
2,014
580
580
(1,173 )
(1,173 )
2,417
2,417

2.8 %
2.8 %
8.9 %
8.9 %
8.2 %
8.2 %
3.5 %
3.5 %
1,286
1,286
4.90
4.90

$
$
$
$

182
182
59
59
73
73
2
2
142
142

390 bp
390 bp
160 bp
160 bp
460 bp
460 bp
350 bp
350 bp
307
307
297
297

The following table shows changes in revenue and operating results by reportable segment for 2021 compared to 2020 (in millions):
The following table shows changes in revenue and operating results by reportable segment for 2021 compared to 2020 (in millions):

Year-over-Year Changes
Year-over-Year Changes

FedEx Express segment
FedEx Express segment
FedEx Ground segment
FedEx Ground segment
FedEx Freight segment
FedEx Freight segment
FedEx Services segment
FedEx Services segment
Corporate, other and eliminations
Corporate, other and eliminations

$
$

Revenue
Revenue

Operating Results(1)
Operating Results(1)
1,814
1,814
1,179
1,179
425
425
—
—
22
22
3,440
3,440

6,565 $
6,565 $
7,763
7,763
731
731
10
10
(327 )
(327 )
14,742 $
14,742 $

(1) The following is a summary of the effects of the (costs) benefits of certain key items affecting our financial results (in millions)
(1) The following is a summary of the effects of the (costs) benefits of certain key items affecting our financial results (in millions)

for the years ended May 31:
for the years ended May 31:

Items affecting Operating Income:
Items affecting Operating Income:
TNT Express integration expenses
TNT Express integration expenses
Business realignment costs
Business realignment costs
Goodwill and other asset impairment charges
Goodwill and other asset impairment charges

Items affecting Net Income:
Items affecting Net Income:

Mark-to-market (“MTM”) retirement plans accounting
Mark-to-market (“MTM”) retirement plans accounting
adjustments, net of tax
adjustments, net of tax
Loss on debt extinguishment, net of tax
Loss on debt extinguishment, net of tax

2021
2021

2020
2020

$
$

(210 )
(210 )
(116 )
(116 )
—
—
(326 )
(326 )

895
895
(297 )
(297 )
598
598

$
$

(270 )
(270 )
—
—
(435 )
(435 )
(705 )
(705 )

(583 )
(583 )
—
—
(583 )
(583 )

Overview
Overview

Volume growth, reflecting increased e-commerce demand accelerated by the coronavirus (“COVID-19”) pandemic, as well as yield
Volume growth, reflecting increased e-commerce demand accelerated by the coronavirus (“COVID-19”) pandemic, as well as yield
improvement related to pricing initiatives, drove strong revenue and operating income growth in 2021. Increased operating expenses
improvement related to pricing initiatives, drove strong revenue and operating income growth in 2021. Increased operating expenses
to support unprecedented levels of demand for our services in the COVID-19 pandemic environment, including higher labor costs,
to support unprecedented levels of demand for our services in the COVID-19 pandemic environment, including higher labor costs,
costs related to operating our air network to support higher demand in key international supply chains and higher costs associated with
costs related to operating our air network to support higher demand in key international supply chains and higher costs associated with
operating our seven-day-per-week network at FedEx Ground, were incurred in 2021. See the “Impact of the COVID-19 Pandemic”
operating our seven-day-per-week network at FedEx Ground, were incurred in 2021. See the “Impact of the COVID-19 Pandemic”
section below for further information regarding the pandemic’s impact on our business.
section below for further information regarding the pandemic’s impact on our business.

- 42 -

- 43 -
- 43 -

We also took certain actions during 2021 to improve our liquidity and strengthen our financial position, given the uncertainty caused

by the COVID-19 pandemic. During 2021, we issued $970 million of pass-through certificates and $3.25 billion of senior unsecured

debt under our shelf registration statement. We used the proceeds of the senior unsecured debt offerings during the fourth quarter of

2021 to redeem $5.8 billion of our existing debt, which eliminated near-term debt obligations taken on during the early stages of the

COVID-19 pandemic. See Note 7 of the accompanying consolidated financial statements and “Financial Condition—Liquidity” below

for additional information.

At the height of the pandemic, Congress passed the CARES Act, which provided financial relief to businesses to help them survive the

economic impact while continuing to employ workers and keep the U.S. economy moving. During 2021, we recorded an income tax

benefit of $279 million related to the CARES Act provision allowing tax losses to be offset against income from prior years and a pre-

tax benefit of approximately $165 million from the excise tax holiday that expired on December 31, 2020. See Note 13 of the

accompanying consolidated financial statements for more information.

We expect continued uncertainty in our business and the global economy due to the duration and spread of the COVID-19 pandemic,

the success of efforts to contain it and treat its impact, the possibility of additional subsequent widespread outbreaks, the resulting

effects on the economic conditions in the global markets in which we operate, the future rate of e-commerce growth and the timeline

for recovery of passenger airline cargo capacity. See “Item 1A. Risk Factors” of this Annual Report for more information.

Our consolidated operating income improved during 2021 due to international export and U.S. domestic package volume growth at
Our consolidated operating income improved during 2021 due to international export and U.S. domestic package volume growth at
FedEx Express, residential volume growth at FedEx Ground and pricing initiatives across all of our transportation segments. Higher
FedEx Express, residential volume growth at FedEx Ground and pricing initiatives across all of our transportation segments. Higher
variable incentive compensation expense negatively impacted year-over-year operating income comparisons in 2021 by approximately
variable incentive compensation expense negatively impacted year-over-year operating income comparisons in 2021 by approximately
$1.3 billion, as maximum attainment levels were achieved for team members in our primary annual incentive programs.
$1.3 billion, as maximum attainment levels were achieved for team members in our primary annual incentive programs.

We incurred TNT Express integration expenses totaling $210 million ($162 million, net of tax, or $0.60 per diluted share) in 2021, a
We incurred TNT Express integration expenses totaling $210 million ($162 million, net of tax, or $0.60 per diluted share) in 2021, a
decrease of $60 million from 2020. The integration expenses are predominantly incremental costs directly associated with the
decrease of $60 million from 2020. The integration expenses are predominantly incremental costs directly associated with the
integration of TNT Express, including professional and legal fees, salaries and wages, advertising and travel expenses. Internal
integration of TNT Express, including professional and legal fees, salaries and wages, advertising and travel expenses. Internal
salaries and wages are included only to the extent the individuals are assigned full-time to integration activities. These costs were
salaries and wages are included only to the extent the individuals are assigned full-time to integration activities. These costs were
recognized at FedEx Express and FedEx Corporate. The identification of these costs as integration-related expenditures is subject to
recognized at FedEx Express and FedEx Corporate. The identification of these costs as integration-related expenditures is subject to
our disclosure controls and procedures. Integration expenses do not include costs associated with our business realignment activities.
our disclosure controls and procedures. Integration expenses do not include costs associated with our business realignment activities.
See the “Business Realignment Costs” section of this MD&A for further information.
See the “Business Realignment Costs” section of this MD&A for further information.

Our 2021 results include business realignment costs of $116 million ($90 million, net of tax, or $0.33 per diluted share) associated
Our 2021 results include business realignment costs of $116 million ($90 million, net of tax, or $0.33 per diluted share) associated
with our workforce reduction plan in Europe announced in January 2021. See the “Business Realignment Costs” section of this
with our workforce reduction plan in Europe announced in January 2021. See the “Business Realignment Costs” section of this
MD&A for more information.
MD&A for more information.

In the fourth quarter of 2020, we recognized $369 million ($366 million, net of tax, or $1.40 per diluted share) of goodwill and other
In the fourth quarter of 2020, we recognized $369 million ($366 million, net of tax, or $1.40 per diluted share) of goodwill and other
asset impairment charges associated with the FedEx Office and Print Services, Inc. (“FedEx Office”) and FedEx Logistics, Inc.
asset impairment charges associated with the FedEx Office and Print Services, Inc. (“FedEx Office”) and FedEx Logistics, Inc.
(“FedEx Logistics”) operating segments. Our 2020 results also include $66 million ($50 million, net of tax, or $0.19 per diluted share)
(“FedEx Logistics”) operating segments. Our 2020 results also include $66 million ($50 million, net of tax, or $0.19 per diluted share)
of asset impairment charges associated with the decision to permanently retire certain aircraft and related engines at FedEx Express.
of asset impairment charges associated with the decision to permanently retire certain aircraft and related engines at FedEx Express.
See the “Goodwill and Other Asset Impairment Charges” section of this MD&A for more information.
See the “Goodwill and Other Asset Impairment Charges” section of this MD&A for more information.

Consolidated net income includes a pre-tax, noncash gain of $1.2 billion in 2021 ($895 million, net of tax, or $3.33 per diluted share)
Consolidated net income includes a pre-tax, noncash gain of $1.2 billion in 2021 ($895 million, net of tax, or $3.33 per diluted share)
and a net loss of $794 million in 2020 ($583 million, net of tax, or $2.22 per diluted share) associated with our MTM retirement plans
and a net loss of $794 million in 2020 ($583 million, net of tax, or $2.22 per diluted share) associated with our MTM retirement plans
accounting adjustments. See the “Retirement Plans MTM Adjustments” section of this MD&A and Note 14 of the accompanying
accounting adjustments. See the “Retirement Plans MTM Adjustments” section of this MD&A and Note 14 of the accompanying
consolidated financial statements.
consolidated financial statements.

Consolidated net income in 2021 also includes a loss on debt extinguishment of $393 million ($297 million, net of tax, or $1.11 per
Consolidated net income in 2021 also includes a loss on debt extinguishment of $393 million ($297 million, net of tax, or $1.11 per
diluted share) associated with our capital allocation strategy, which includes reducing outstanding debt. See the “Other Income and
diluted share) associated with our capital allocation strategy, which includes reducing outstanding debt. See the “Other Income and
Expense” section of this MD&A and Note 7 of the accompanying consolidated financial statements.
Expense” section of this MD&A and Note 7 of the accompanying consolidated financial statements.

Net income for 2021 includes a tax benefit of $279 million ($1.04 per diluted share) related to the Coronavirus Aid, Relief, and
Net income for 2021 includes a tax benefit of $279 million ($1.04 per diluted share) related to the Coronavirus Aid, Relief, and
Economic Security Act (“CARES Act”), which allows tax losses to be offset against income from prior years that was taxed at higher
Economic Security Act (“CARES Act”), which allows tax losses to be offset against income from prior years that was taxed at higher
rates, and a tax benefit of $66 million ($0.25 per diluted share) from a tax rate increase in the Netherlands applied to our deferred tax
rates, and a tax benefit of $66 million ($0.25 per diluted share) from a tax rate increase in the Netherlands applied to our deferred tax
asset balances. In 2020, we recognized a tax benefit of $133 million ($0.51 per diluted share) from the reduction of a valuation
asset balances. In 2020, we recognized a tax benefit of $133 million ($0.51 per diluted share) from the reduction of a valuation
allowance on certain foreign tax loss carryforwards and a tax benefit of $71 million ($0.27 per diluted share) related to the CARES
allowance on certain foreign tax loss carryforwards and a tax benefit of $71 million ($0.27 per diluted share) related to the CARES
Act. See the “Income Taxes” section of this MD&A and Note 13 of the accompanying consolidated financial statements.
Act. See the “Income Taxes” section of this MD&A and Note 13 of the accompanying consolidated financial statements.

Impact of the COVID-19 Pandemic
Impact of the COVID-19 Pandemic

The COVID-19 pandemic had a profound impact on our industry throughout 2021, resulting in unprecedented demand for our
The COVID-19 pandemic had a profound impact on our industry throughout 2021, resulting in unprecedented demand for our
residential delivery services, rivaling our peak holiday season traffic. In addition, demand for our commercial service offerings
residential delivery services, rivaling our peak holiday season traffic. In addition, demand for our commercial service offerings
increased throughout the year as COVID-19 restrictions moderated globally.
increased throughout the year as COVID-19 restrictions moderated globally.

During 2021, we were able to flex our networks and make adjustments as needed to accommodate increased volumes under current
During 2021, we were able to flex our networks and make adjustments as needed to accommodate increased volumes under current
operating conditions; however, we incurred elevated operating expenses to support demand for our services in the COVID-19
operating conditions; however, we incurred elevated operating expenses to support demand for our services in the COVID-19
pandemic environment. Our business is labor and capital intensive in nature, which required us to incur higher costs to operate our
pandemic environment. Our business is labor and capital intensive in nature, which required us to incur higher costs to operate our
networks during the pandemic, including increased wage rates and costs for additional personnel in place to support our operations
networks during the pandemic, including increased wage rates and costs for additional personnel in place to support our operations
and meet regulatory requirements. The safety of our team members, our customers and the communities in which we operate is our
and meet regulatory requirements. The safety of our team members, our customers and the communities in which we operate is our
top priority, and we took, and continue to take, measures to adhere to all regulations and guidelines from government authorities
top priority, and we took, and continue to take, measures to adhere to all regulations and guidelines from government authorities
related to the containment of COVID-19 and to protect and promote health and safety. In connection with this, we incurred increased
related to the containment of COVID-19 and to protect and promote health and safety. In connection with this, we incurred increased
operating expenses related to personal protective equipment and medical/safety supplies, as well as additional security and cleaning
operating expenses related to personal protective equipment and medical/safety supplies, as well as additional security and cleaning
services, in order to protect our team members and customers during the COVID-19 pandemic, of approximately $255 million in 2021
services, in order to protect our team members and customers during the COVID-19 pandemic, of approximately $255 million in 2021
and approximately $125 million in 2020. As a response to these increased costs, we implemented various pricing initiatives
and approximately $125 million in 2020. As a response to these increased costs, we implemented various pricing initiatives
throughout 2021 to mitigate the negative impact of the change in our operating expense profile.
throughout 2021 to mitigate the negative impact of the change in our operating expense profile.

- 44 -
- 44 -

- 45 -

We also took certain actions during 2021 to improve our liquidity and strengthen our financial position, given the uncertainty caused
We also took certain actions during 2021 to improve our liquidity and strengthen our financial position, given the uncertainty caused
by the COVID-19 pandemic. During 2021, we issued $970 million of pass-through certificates and $3.25 billion of senior unsecured
by the COVID-19 pandemic. During 2021, we issued $970 million of pass-through certificates and $3.25 billion of senior unsecured
debt under our shelf registration statement. We used the proceeds of the senior unsecured debt offerings during the fourth quarter of
debt under our shelf registration statement. We used the proceeds of the senior unsecured debt offerings during the fourth quarter of
2021 to redeem $5.8 billion of our existing debt, which eliminated near-term debt obligations taken on during the early stages of the
2021 to redeem $5.8 billion of our existing debt, which eliminated near-term debt obligations taken on during the early stages of the
COVID-19 pandemic. See Note 7 of the accompanying consolidated financial statements and “Financial Condition—Liquidity” below
COVID-19 pandemic. See Note 7 of the accompanying consolidated financial statements and “Financial Condition—Liquidity” below
for additional information.
for additional information.

At the height of the pandemic, Congress passed the CARES Act, which provided financial relief to businesses to help them survive the
At the height of the pandemic, Congress passed the CARES Act, which provided financial relief to businesses to help them survive the
economic impact while continuing to employ workers and keep the U.S. economy moving. During 2021, we recorded an income tax
economic impact while continuing to employ workers and keep the U.S. economy moving. During 2021, we recorded an income tax
benefit of $279 million related to the CARES Act provision allowing tax losses to be offset against income from prior years and a pre-
benefit of $279 million related to the CARES Act provision allowing tax losses to be offset against income from prior years and a pre-
tax benefit of approximately $165 million from the excise tax holiday that expired on December 31, 2020. See Note 13 of the
tax benefit of approximately $165 million from the excise tax holiday that expired on December 31, 2020. See Note 13 of the
accompanying consolidated financial statements for more information.
accompanying consolidated financial statements for more information.

We expect continued uncertainty in our business and the global economy due to the duration and spread of the COVID-19 pandemic,
We expect continued uncertainty in our business and the global economy due to the duration and spread of the COVID-19 pandemic,
the success of efforts to contain it and treat its impact, the possibility of additional subsequent widespread outbreaks, the resulting
the success of efforts to contain it and treat its impact, the possibility of additional subsequent widespread outbreaks, the resulting
effects on the economic conditions in the global markets in which we operate, the future rate of e-commerce growth and the timeline
effects on the economic conditions in the global markets in which we operate, the future rate of e-commerce growth and the timeline
for recovery of passenger airline cargo capacity. See “Item 1A. Risk Factors” of this Annual Report for more information.
for recovery of passenger airline cargo capacity. See “Item 1A. Risk Factors” of this Annual Report for more information.

Our consolidated operating income improved during 2021 due to international export and U.S. domestic package volume growth at

FedEx Express, residential volume growth at FedEx Ground and pricing initiatives across all of our transportation segments. Higher

variable incentive compensation expense negatively impacted year-over-year operating income comparisons in 2021 by approximately

$1.3 billion, as maximum attainment levels were achieved for team members in our primary annual incentive programs.

We incurred TNT Express integration expenses totaling $210 million ($162 million, net of tax, or $0.60 per diluted share) in 2021, a

decrease of $60 million from 2020. The integration expenses are predominantly incremental costs directly associated with the

integration of TNT Express, including professional and legal fees, salaries and wages, advertising and travel expenses. Internal

salaries and wages are included only to the extent the individuals are assigned full-time to integration activities. These costs were

recognized at FedEx Express and FedEx Corporate. The identification of these costs as integration-related expenditures is subject to

our disclosure controls and procedures. Integration expenses do not include costs associated with our business realignment activities.

See the “Business Realignment Costs” section of this MD&A for further information.

Our 2021 results include business realignment costs of $116 million ($90 million, net of tax, or $0.33 per diluted share) associated

with our workforce reduction plan in Europe announced in January 2021. See the “Business Realignment Costs” section of this

MD&A for more information.

In the fourth quarter of 2020, we recognized $369 million ($366 million, net of tax, or $1.40 per diluted share) of goodwill and other

asset impairment charges associated with the FedEx Office and Print Services, Inc. (“FedEx Office”) and FedEx Logistics, Inc.

(“FedEx Logistics”) operating segments. Our 2020 results also include $66 million ($50 million, net of tax, or $0.19 per diluted share)

of asset impairment charges associated with the decision to permanently retire certain aircraft and related engines at FedEx Express.

See the “Goodwill and Other Asset Impairment Charges” section of this MD&A for more information.

Consolidated net income includes a pre-tax, noncash gain of $1.2 billion in 2021 ($895 million, net of tax, or $3.33 per diluted share)

and a net loss of $794 million in 2020 ($583 million, net of tax, or $2.22 per diluted share) associated with our MTM retirement plans

accounting adjustments. See the “Retirement Plans MTM Adjustments” section of this MD&A and Note 14 of the accompanying

consolidated financial statements.

Consolidated net income in 2021 also includes a loss on debt extinguishment of $393 million ($297 million, net of tax, or $1.11 per

diluted share) associated with our capital allocation strategy, which includes reducing outstanding debt. See the “Other Income and

Expense” section of this MD&A and Note 7 of the accompanying consolidated financial statements.

Net income for 2021 includes a tax benefit of $279 million ($1.04 per diluted share) related to the Coronavirus Aid, Relief, and

Economic Security Act (“CARES Act”), which allows tax losses to be offset against income from prior years that was taxed at higher

rates, and a tax benefit of $66 million ($0.25 per diluted share) from a tax rate increase in the Netherlands applied to our deferred tax

asset balances. In 2020, we recognized a tax benefit of $133 million ($0.51 per diluted share) from the reduction of a valuation

allowance on certain foreign tax loss carryforwards and a tax benefit of $71 million ($0.27 per diluted share) related to the CARES

Act. See the “Income Taxes” section of this MD&A and Note 13 of the accompanying consolidated financial statements.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic had a profound impact on our industry throughout 2021, resulting in unprecedented demand for our

residential delivery services, rivaling our peak holiday season traffic. In addition, demand for our commercial service offerings

increased throughout the year as COVID-19 restrictions moderated globally.

During 2021, we were able to flex our networks and make adjustments as needed to accommodate increased volumes under current

operating conditions; however, we incurred elevated operating expenses to support demand for our services in the COVID-19

pandemic environment. Our business is labor and capital intensive in nature, which required us to incur higher costs to operate our

networks during the pandemic, including increased wage rates and costs for additional personnel in place to support our operations

and meet regulatory requirements. The safety of our team members, our customers and the communities in which we operate is our

top priority, and we took, and continue to take, measures to adhere to all regulations and guidelines from government authorities

related to the containment of COVID-19 and to protect and promote health and safety. In connection with this, we incurred increased

operating expenses related to personal protective equipment and medical/safety supplies, as well as additional security and cleaning

services, in order to protect our team members and customers during the COVID-19 pandemic, of approximately $255 million in 2021

and approximately $125 million in 2020. As a response to these increased costs, we implemented various pricing initiatives

throughout 2021 to mitigate the negative impact of the change in our operating expense profile.

- 44 -

- 45 -
- 45 -

The following graphs for FedEx Express, FedEx Ground and FedEx Freight show selected volume trends (in thousands) for the years
The following graphs for FedEx Express, FedEx Ground and FedEx Freight show selected volume trends (in thousands) for the years
ended May 31:
ended May 31:

The following graphs for FedEx Express, FedEx Ground and FedEx Freight show selected yield trends for the years ended May 31:

FedEx Express
FedEx Express
U.S. Domestic
U.S. Domestic
Average Daily Package Volume
Average Daily Package Volume

3,283
3,283

2,901
2,901

2,808
2,808

2,729
2,729

FedEx Express
FedEx Express
International(1)
International(1)
Average Daily Package Volume
Average Daily Package Volume

2,454
2,454

2,471
2,471

2,337
2,337

2,362
2,362

803
803

831
831

841
841

1,036
1,036

3,000
3,000

2,500
2,500

2,000
2,000

1,500
1,500

1,000
1,000

500
500

2018
2018

2019
2019

2020
2020

2021
2021

2018
2018

2019
2019

2020
2020

2021
2021

International domestic
International domestic

International export
International export

FedEx Ground
FedEx Ground
Average Daily Package Volume
Average Daily Package Volume

FedEx Express and FedEx Ground
FedEx Express and FedEx Ground
Total Average Daily Package Volume
Total Average Daily Package Volume

12,272
12,272

20,000
20,000

18,500
18,500

17,000
17,000

15,500
15,500

14,000
14,000

12,500
12,500

9,997
9,997

8,952
8,952

8,336
8,336

15,983
15,983

15,155
15,155

14,322
14,322

18,953
18,953

$1.50

$1.31

$1.38

$1.41

$9.70

$9.00

$8.63

$8.97

$8.93

2018
2018

2019
2019

2020
2020

2021
2021

2018
2018

2019
2019

2020
2020

2021
2021

FedEx Express
FedEx Express
Average Daily Freight Pounds
Average Daily Freight Pounds

FedEx Freight
FedEx Freight
Average Daily Shipments
Average Daily Shipments

19,886
19,886

21,241
21,241

19,880
19,880

19,869
19,869

8,362
8,362

8,577
8,577

8,528
8,528

9,231
9,231

2018
2018

2019
2019

2020
2020

2021
2021

90.0
90.0

80.0
80.0

70.0
70.0

60.0
60.0

50.0
50.0

40.0
40.0

30.0
30.0

20.0
20.0

74.5
74.5

78.4
78.4

72.5
72.5

76.2
76.2

31.9
31.9

34.3
34.3

30.5
30.5

32.2
32.2

3,600
3,600

3,400
3,400

3,200
3,200

3,000
3,000

2,800
2,800

2,600
2,600

13,000
13,000

12,000
12,000

11,000
11,000

10,000
10,000

9,000
9,000

8,000
8,000

7,000
7,000

24,000
24,000

21,000
21,000

18,000
18,000

15,000
15,000

12,000
12,000

9,000
9,000

6,000
6,000

International(2)
International(2)
International(2)
International(2)

U.S.
U.S.

Priority
Priority

Economy
Economy

2018
2018

2019
2019

2020
2020

2021
2021

2018

2019

2020

2021

(1)
(1)

(2)
(2)

International domestic average daily package volume relates to our international intra-country operations. International
International domestic average daily package volume relates to our international intra-country operations. International
export average daily package volume relates to our international priority and economy services.
export average daily package volume relates to our international priority and economy services.

International export revenue per package relates to our international priority and economy services. International domestic

revenue per package relates to our international intra-country operations.

International average daily freight pounds relate to our international priority, economy and airfreight services.
International average daily freight pounds relate to our international priority, economy and airfreight services.

International revenue per pound relates to our international priority, economy and airfreight services.

(1)

(2)

- 46 -
- 46 -

- 47 -

$20.00

$19.00

$18.00

$17.00

$16.00

$2.00

$1.00

$0.50

FedEx Express

U.S. Domestic

Revenue per Package - Yield

$18.40

$18.54

$18.30

FedEx Express

International(1)

Revenue per Package - Yield

$17.79

$52.35

$51.21

$48.83

$49.03

$7.41

$7.20

$7.04

$7.70

2018

2019

2020

2021

2018

2019

2020

2021

International export composite

International domestic

FedEx Express

Freight

Revenue per Pound - Yield

FedEx Ground

Revenue per Package - Yield

$0.87

$0.83

$0.81

$0.96

U.S.

International(2)

2018

2019

2020

2021

2018

2019

2020

2021

$70.00

$60.00

$50.00

$40.00

$30.00

$20.00

$10.00

$11.00

$10.00

$8.00

$7.00

FedEx Freight

Revenue per Shipment

$300.02

$301.55

$286.85

$260.39

$250.95

$313.67

$269.98

$330.00

$310.00

$290.00

$270.00

$230.00

$210.00

$250.00

$236.78

Economy

Priority

The following graphs for FedEx Express, FedEx Ground and FedEx Freight show selected volume trends (in thousands) for the years

The following graphs for FedEx Express, FedEx Ground and FedEx Freight show selected yield trends for the years ended May 31:
The following graphs for FedEx Express, FedEx Ground and FedEx Freight show selected yield trends for the years ended May 31:

ended May 31:

FedEx Express

U.S. Domestic

FedEx Express

International(1)

Average Daily Package Volume

3,283

2,454

2,471

2,337

2,362

2,901

2,808

2,729

803

831

841

1,036

2018

2019

2020

2021

2018

2019

2020

2021

International domestic

International export

FedEx Ground

Average Daily Package Volume

FedEx Express and FedEx Ground

Total Average Daily Package Volume

$20.00
$20.00

$19.00
$19.00

$18.00
$18.00

$17.00
$17.00

$16.00
$16.00

$2.00
$2.00

3,600

3,400

3,200

3,000

2,800

2,600

13,000

12,000

11,000

10,000

9,000

8,000

7,000

24,000

21,000

18,000

15,000

12,000

9,000

6,000

3,000

2,500

2,000

1,500

1,000

500

20,000

18,500

17,000

15,500

14,000

12,500

90.0

80.0

70.0

60.0

50.0

40.0

30.0

20.0

FedEx Express

Average Daily Freight Pounds

FedEx Freight

Average Daily Shipments

21,241

19,886

19,880

19,869

74.5

78.4

72.5

76.2

8,362

8,577

8,528

9,231

31.9

34.3

30.5

32.2

2018

2019

2020

2021

International(2)

U.S.

Priority

Economy

9,997

8,952

8,336

15,983

15,155

14,322

2018

2019

2020

2021

2018

2019

2020

2021

$1.00
$1.00

$0.50
$0.50

$-
$-

FedEx Express
FedEx Express
U.S. Domestic
U.S. Domestic
Revenue per Package - Yield
Revenue per Package - Yield

$18.40
$18.40

$18.54
$18.54

$18.30
$18.30

$17.79
$17.79

FedEx Express
FedEx Express
International(1)
International(1)
Revenue per Package - Yield
Revenue per Package - Yield

$52.35
$52.35

$51.21
$51.21

$48.83
$48.83

$49.03
$49.03

$7.41
$7.41

$7.20
$7.20

$7.04
$7.04

$7.70
$7.70

$70.00
$70.00

$60.00
$60.00

$50.00
$50.00

$40.00
$40.00

$30.00
$30.00

$20.00
$20.00

$10.00
$10.00

$-
$-

2018
2018

2019
2019

2020
2020

2021
2021

2018
2018

2019
2019

2020
2020

2021
2021

International export composite
International export composite

International domestic
International domestic

FedEx Express
FedEx Express
Freight
Freight
Revenue per Pound - Yield
Revenue per Pound - Yield

FedEx Ground
FedEx Ground
Revenue per Package - Yield
Revenue per Package - Yield

$11.00
$11.00

$10.00
$10.00

$9.00
$9.00

$8.63
$8.63

$8.97
$8.97

$8.93
$8.93

$9.70
$9.70

$0.87
$0.87

$0.83
$0.83

$0.81
$0.81

$0.96
$0.96

$8.00
$8.00

$7.00
$7.00

2018
2018

2019
2019

2020
2020

2021
2021

2018
2018

2019
2019

2020
2020

2021
2021

U.S.
U.S.

International(2)
International(2)

FedEx Freight
FedEx Freight
Revenue per Shipment
Revenue per Shipment

$330.00
$330.00

$310.00
$310.00

$290.00
$290.00

$270.00
$270.00

$300.02
$300.02

$301.55
$301.55

$286.85
$286.85

$260.39
$260.39

$250.95
$250.95

$313.67
$313.67

$269.98
$269.98

$250.00
$250.00

$236.78
$236.78

$230.00
$230.00

$210.00
$210.00

12,272

18,953

$1.50
$1.50

$1.31
$1.31

$1.38
$1.38

$1.41
$1.41

2018

2019

2020

2021

2018
2018

2019
2019

2020
2020

2021
2021

Economy
Economy

Priority
Priority

(1)

(2)

International domestic average daily package volume relates to our international intra-country operations. International

export average daily package volume relates to our international priority and economy services.

International average daily freight pounds relate to our international priority, economy and airfreight services.

(1)
(1)

(2)
(2)

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

International revenue per pound relates to our international priority, economy and airfreight services.
International revenue per pound relates to our international priority, economy and airfreight services.

- 46 -

- 47 -
- 47 -

Revenue
Revenue

Revenue increased 21% in 2021 primarily due to volume growth in residential delivery services at FedEx Ground and U.S. domestic
Revenue increased 21% in 2021 primarily due to volume growth in residential delivery services at FedEx Ground and U.S. domestic
package volume growth at FedEx Express, both reflecting increased e-commerce demand accelerated by the COVID-19 pandemic.
package volume growth at FedEx Express, both reflecting increased e-commerce demand accelerated by the COVID-19 pandemic.
International export package volume growth at FedEx Express, as well as pricing initiatives across all of our transportation segments,
International export package volume growth at FedEx Express, as well as pricing initiatives across all of our transportation segments,
also contributed to the increase in revenue during 2021.
also contributed to the increase in revenue during 2021.

At FedEx Ground, revenue increased 34% in 2021 primarily due to residential delivery volume growth. Revenue at FedEx Express
At FedEx Ground, revenue increased 34% in 2021 primarily due to residential delivery volume growth. Revenue at FedEx Express
increased 18% in 2021 due to international export and U.S. domestic package volume growth. International export volume increased
increased 18% in 2021 due to international export and U.S. domestic package volume growth. International export volume increased
in 2021 driven by strong demand for international priority shipments due to air freight capacity constraints. FedEx Freight revenue
in 2021 driven by strong demand for international priority shipments due to air freight capacity constraints. FedEx Freight revenue
increased 10% in 2021 primarily due to higher revenue per shipment and increased average daily shipments.
increased 10% in 2021 primarily due to higher revenue per shipment and increased average daily shipments.

Business Realignment Costs
Business Realignment Costs

In January 2021, FedEx Express announced a workforce reduction plan in Europe as it nears the completion of the network integration
In January 2021, FedEx Express announced a workforce reduction plan in Europe as it nears the completion of the network integration
of TNT Express. The plan will impact between 5,500 and 6,300 employees in Europe across operational teams and back-office
of TNT Express. The plan will impact between 5,500 and 6,300 employees in Europe across operational teams and back-office
functions. The execution of the plan is subject to a works council consultation process that will occur over an 18-month period in
functions. The execution of the plan is subject to a works council consultation process that will occur over an 18-month period in
accordance with local country processes and regulations.
accordance with local country processes and regulations.

We incurred costs during 2021 of $116 million ($90 million, net of tax, or $0.33 per diluted share) associated with our business
We incurred costs during 2021 of $116 million ($90 million, net of tax, or $0.33 per diluted share) associated with our business
realignment activities. These costs are related to certain employee severance arrangements. Approximately $15 million was paid under
realignment activities. These costs are related to certain employee severance arrangements. Approximately $15 million was paid under
this program in 2021. We expect the pre-tax cost of our business realignment activities to range from $300 million to $575 million
this program in 2021. We expect the pre-tax cost of our business realignment activities to range from $300 million to $575 million
through fiscal 2023. We expect savings from our business realignment activities to be between $275 million and $350 million on an
through fiscal 2023. We expect savings from our business realignment activities to be between $275 million and $350 million on an
annualized basis beginning in fiscal 2024. The actual amount and timing of business realignment costs and related cost savings
annualized basis beginning in fiscal 2024. The actual amount and timing of business realignment costs and related cost savings
resulting from the workforce reduction plan are dependent on local country consultation processes and regulations and negotiated
resulting from the workforce reduction plan are dependent on local country consultation processes and regulations and negotiated
social plans and may differ from our current expectations and estimates.
social plans and may differ from our current expectations and estimates.

Goodwill and Other Asset Impairment Charges
Goodwill and Other Asset Impairment Charges

In 2020, we recorded goodwill impairment charges of $358 million predominantly attributable to our FedEx Office reporting unit. As
In 2020, we recorded goodwill impairment charges of $358 million predominantly attributable to our FedEx Office reporting unit. As
a result, the goodwill attributed to this reporting unit has been fully impaired. The COVID-19 pandemic resulted in store closures and
a result, the goodwill attributed to this reporting unit has been fully impaired. The COVID-19 pandemic resulted in store closures and
declining print revenue at FedEx Office during the fourth quarter of 2020, which negatively impacted its near-term operating
declining print revenue at FedEx Office during the fourth quarter of 2020, which negatively impacted its near-term operating
performance. We also recorded $11 million of other asset impairment charges at the FedEx Logistics operating segment in 2020.
performance. We also recorded $11 million of other asset impairment charges at the FedEx Logistics operating segment in 2020.

In 2020, we made the decision to permanently retire from service 10 Airbus A310-300 aircraft and 12 related engines at FedEx
In 2020, we made the decision to permanently retire from service 10 Airbus A310-300 aircraft and 12 related engines at FedEx
Express to align with the needs of the U.S. domestic network and modernize its aircraft fleet. As a consequence of this decision, we
Express to align with the needs of the U.S. domestic network and modernize its aircraft fleet. As a consequence of this decision, we
recognized noncash impairment charges of $66 million ($50 million, net of tax, or $0.19 per diluted share) in the FedEx Express
recognized noncash impairment charges of $66 million ($50 million, net of tax, or $0.19 per diluted share) in the FedEx Express
segment in 2020. For additional information regarding these impairment charges, see the “Critical Accounting Estimates” section of
segment in 2020. For additional information regarding these impairment charges, see the “Critical Accounting Estimates” section of
this MD&A and Note 5 of the accompanying consolidated financial statements.
this MD&A and Note 5 of the accompanying consolidated financial statements.

The following table compares operating expenses expressed as dollar amounts (in millions) and as a percent of revenue for the years

Operating Expenses

ended May 31:

Operating expenses:

Salaries and employee benefits

Purchased transportation

Rentals and landing fees

Depreciation and amortization

Fuel

Other

Maintenance and repairs

Business realignment costs(2)

Goodwill and other asset impairment charges(3)

Total operating expenses

Total operating income

2021(1)

2020(1)

Percent

Percent of Revenue

Change

2021(1)

2020(1)

30,173 $

21,674

4,155

3,793

2,882

3,328

116

—

11,981

78,102

5,857 $

25,031

17,466

3,712

3,615

3,156

2,893

—

435

10,492

66,800

2,417

(9 )

142

35.9 %

36.2 %

25.8

25.2

5.0

4.5

3.4

4.0

0.1

—

14.3

93.0

5.4

5.2

4.6

4.2

0.6

—

15.1

96.5

7.0 %

3.5 %

(1)

Includes TNT Express integration expenses of $210 million in 2021 and $270 million in 2020.

(2) Includes business realignment costs associated with the workforce reduction plan in Europe.

(3) Includes goodwill and other asset impairment charges associated with the FedEx Office, FedEx Express and FedEx Logistics

operating segments.

Our 2021 operating income improved due to international export and U.S. domestic package volume growth at FedEx Express and

residential volume growth at FedEx Ground, reflecting increased demand accelerated by the COVID-19 pandemic, as well as yield

improvement related to pricing initiatives across all of our transportation segments. We incurred increased operating expenses to

support unprecedented levels of demand for our services in the COVID-19 pandemic environment. Our business is labor and capital

intensive in nature, which has required us to incur higher costs to operate our networks during the pandemic, including increased wage

rates and costs for additional personnel in place to support our operations and meet regulatory requirements.

Volume growth in 2021, as discussed above, contributed to a 21% increase in salaries and employee benefits expense, a 24% increase

in purchased transportation costs and a 14% increase in other operating expenses. Higher variable incentive compensation expense

also contributed to an increase in salaries and employee benefits expense in 2021. Purchased transportation costs were also higher in

2021 primarily due to increased residential service mix at FedEx Ground. In addition, other operating expenses increased in 2021,

reflecting higher self-insurance accruals at FedEx Ground.

- 48 -
- 48 -

- 49 -

Revenue

Operating Expenses
Operating Expenses

The following table compares operating expenses expressed as dollar amounts (in millions) and as a percent of revenue for the years
The following table compares operating expenses expressed as dollar amounts (in millions) and as a percent of revenue for the years
ended May 31:
ended May 31:

We incurred costs during 2021 of $116 million ($90 million, net of tax, or $0.33 per diluted share) associated with our business

Total operating income
Total operating income

Operating expenses:
Operating expenses:

Salaries and employee benefits
Salaries and employee benefits
Purchased transportation
Purchased transportation
Rentals and landing fees
Rentals and landing fees
Depreciation and amortization
Depreciation and amortization
Fuel
Fuel
Maintenance and repairs
Maintenance and repairs
Business realignment costs(2)
Business realignment costs(2)
Goodwill and other asset impairment charges(3)
Goodwill and other asset impairment charges(3)
Other
Other

Total operating expenses
Total operating expenses

2021(1)
2021(1)

2020(1)
2020(1)

Percent
Percent

Percent of Revenue
Percent of Revenue

Change
Change

2021(1)
2021(1)

2020(1)
2020(1)

$
$

30,173 $
30,173 $
21,674
21,674
4,155
4,155
3,793
3,793
2,882
2,882
3,328
3,328
116
116
—
—

11,981
11,981
78,102
78,102
5,857 $
5,857 $

25,031
25,031
17,466
17,466
3,712
3,712
3,615
3,615
3,156
3,156
2,893
2,893
—
—
435
435
10,492
10,492
66,800
66,800
2,417
2,417

21
21
24
24
12
12
5
5
(9 )
(9 )
15
15
NM
NM
NM
NM
14
14
17
17
142
142

35.9 %
35.9 %
25.8
25.8
5.0
5.0
4.5
4.5
3.4
3.4
4.0
4.0
0.1
0.1
—
—
14.3
14.3
93.0
93.0

36.2 %
36.2 %
25.2
25.2
5.4
5.4
5.2
5.2
4.6
4.6
4.2
4.2
—
—
0.6
0.6
15.1
15.1
96.5
96.5

7.0 %
7.0 %

3.5 %
3.5 %

(1)
(1)

Includes TNT Express integration expenses of $210 million in 2021 and $270 million in 2020.
Includes TNT Express integration expenses of $210 million in 2021 and $270 million in 2020.

(2) Includes business realignment costs associated with the workforce reduction plan in Europe.
(2) Includes business realignment costs associated with the workforce reduction plan in Europe.

(3) Includes goodwill and other asset impairment charges associated with the FedEx Office, FedEx Express and FedEx Logistics
(3) Includes goodwill and other asset impairment charges associated with the FedEx Office, FedEx Express and FedEx Logistics

operating segments.
operating segments.

Our 2021 operating income improved due to international export and U.S. domestic package volume growth at FedEx Express and
Our 2021 operating income improved due to international export and U.S. domestic package volume growth at FedEx Express and
residential volume growth at FedEx Ground, reflecting increased demand accelerated by the COVID-19 pandemic, as well as yield
residential volume growth at FedEx Ground, reflecting increased demand accelerated by the COVID-19 pandemic, as well as yield
improvement related to pricing initiatives across all of our transportation segments. We incurred increased operating expenses to
improvement related to pricing initiatives across all of our transportation segments. We incurred increased operating expenses to
support unprecedented levels of demand for our services in the COVID-19 pandemic environment. Our business is labor and capital
support unprecedented levels of demand for our services in the COVID-19 pandemic environment. Our business is labor and capital
intensive in nature, which has required us to incur higher costs to operate our networks during the pandemic, including increased wage
intensive in nature, which has required us to incur higher costs to operate our networks during the pandemic, including increased wage
rates and costs for additional personnel in place to support our operations and meet regulatory requirements.
rates and costs for additional personnel in place to support our operations and meet regulatory requirements.

Volume growth in 2021, as discussed above, contributed to a 21% increase in salaries and employee benefits expense, a 24% increase
Volume growth in 2021, as discussed above, contributed to a 21% increase in salaries and employee benefits expense, a 24% increase
in purchased transportation costs and a 14% increase in other operating expenses. Higher variable incentive compensation expense
in purchased transportation costs and a 14% increase in other operating expenses. Higher variable incentive compensation expense
also contributed to an increase in salaries and employee benefits expense in 2021. Purchased transportation costs were also higher in
also contributed to an increase in salaries and employee benefits expense in 2021. Purchased transportation costs were also higher in
2021 primarily due to increased residential service mix at FedEx Ground. In addition, other operating expenses increased in 2021,
2021 primarily due to increased residential service mix at FedEx Ground. In addition, other operating expenses increased in 2021,
reflecting higher self-insurance accruals at FedEx Ground.
reflecting higher self-insurance accruals at FedEx Ground.

Revenue increased 21% in 2021 primarily due to volume growth in residential delivery services at FedEx Ground and U.S. domestic

package volume growth at FedEx Express, both reflecting increased e-commerce demand accelerated by the COVID-19 pandemic.

International export package volume growth at FedEx Express, as well as pricing initiatives across all of our transportation segments,

also contributed to the increase in revenue during 2021.

At FedEx Ground, revenue increased 34% in 2021 primarily due to residential delivery volume growth. Revenue at FedEx Express

increased 18% in 2021 due to international export and U.S. domestic package volume growth. International export volume increased

in 2021 driven by strong demand for international priority shipments due to air freight capacity constraints. FedEx Freight revenue

increased 10% in 2021 primarily due to higher revenue per shipment and increased average daily shipments.

Business Realignment Costs

In January 2021, FedEx Express announced a workforce reduction plan in Europe as it nears the completion of the network integration

of TNT Express. The plan will impact between 5,500 and 6,300 employees in Europe across operational teams and back-office

functions. The execution of the plan is subject to a works council consultation process that will occur over an 18-month period in

accordance with local country processes and regulations.

realignment activities. These costs are related to certain employee severance arrangements. Approximately $15 million was paid under

this program in 2021. We expect the pre-tax cost of our business realignment activities to range from $300 million to $575 million

through fiscal 2023. We expect savings from our business realignment activities to be between $275 million and $350 million on an

annualized basis beginning in fiscal 2024. The actual amount and timing of business realignment costs and related cost savings

resulting from the workforce reduction plan are dependent on local country consultation processes and regulations and negotiated

social plans and may differ from our current expectations and estimates.

Goodwill and Other Asset Impairment Charges

In 2020, we recorded goodwill impairment charges of $358 million predominantly attributable to our FedEx Office reporting unit. As

a result, the goodwill attributed to this reporting unit has been fully impaired. The COVID-19 pandemic resulted in store closures and

declining print revenue at FedEx Office during the fourth quarter of 2020, which negatively impacted its near-term operating

performance. We also recorded $11 million of other asset impairment charges at the FedEx Logistics operating segment in 2020.

In 2020, we made the decision to permanently retire from service 10 Airbus A310-300 aircraft and 12 related engines at FedEx

Express to align with the needs of the U.S. domestic network and modernize its aircraft fleet. As a consequence of this decision, we

recognized noncash impairment charges of $66 million ($50 million, net of tax, or $0.19 per diluted share) in the FedEx Express

segment in 2020. For additional information regarding these impairment charges, see the “Critical Accounting Estimates” section of

this MD&A and Note 5 of the accompanying consolidated financial statements.

- 48 -

- 49 -
- 49 -

Fuel
Fuel

Other Income and Expense

The following graph for our transportation segments shows our average cost of vehicle and jet fuel per gallon for the years ended
The following graph for our transportation segments shows our average cost of vehicle and jet fuel per gallon for the years ended
May 31:
May 31:

$4.00
$4.00

$3.00
$3.00

$2.00
$2.00

$1.00
$1.00

$-
$-

Average Fuel Cost per Gallon
Average Fuel Cost per Gallon

$2.79
$2.79

$3.05
$3.05

$2.69
$2.69

$2.47
$2.47

$1.93
$1.93

$2.21
$2.21

$1.78
$1.78

$1.44
$1.44

2018
2018

2019
2019

2020
2020

2021
2021

Vehicle
Vehicle

Jet
Jet

Fuel expense decreased 9% during 2021 due to lower fuel prices. Fuel prices represent only one component of the factors we consider
Fuel expense decreased 9% during 2021 due to lower fuel prices. Fuel prices represent only one component of the factors we consider
meaningful in understanding the impact of fuel on our business. Consideration must also be given to the fuel surcharge revenue we
meaningful in understanding the impact of fuel on our business. Consideration must also be given to the fuel surcharge revenue we
collect. Accordingly, we believe discussion of the net impact of fuel on our results, which is a comparison of the year-over-year
collect. Accordingly, we believe discussion of the net impact of fuel on our results, which is a comparison of the year-over-year
change in these two factors, is important to understand the impact of fuel on our business. In order to provide information about the
change in these two factors, is important to understand the impact of fuel on our business. In order to provide information about the
impact of fuel surcharges on the trend in revenue and yield growth, we have included the comparative weighted-average fuel
impact of fuel surcharges on the trend in revenue and yield growth, we have included the comparative weighted-average fuel
surcharge percentages in effect for 2021 and 2020 in the accompanying discussions of each of our transportation segments.
surcharge percentages in effect for 2021 and 2020 in the accompanying discussions of each of our transportation segments.

Most of our fuel surcharges are adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price from two weeks prior to
Most of our fuel surcharges are adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price from two weeks prior to
the week in which it is assessed. Some FedEx Express international fuel surcharges incorporate a timing lag of approximately six to
the week in which it is assessed. Some FedEx Express international fuel surcharges incorporate a timing lag of approximately six to
eight weeks.
eight weeks.

The manner in which we purchase fuel also influences the net impact of fuel on our results. For example, our contracts for jet fuel
The manner in which we purchase fuel also influences the net impact of fuel on our results. For example, our contracts for jet fuel
purchases at FedEx Express are tied to various indices, including the U.S. Gulf Coast index. While many of these indices are aligned,
purchases at FedEx Express are tied to various indices, including the U.S. Gulf Coast index. While many of these indices are aligned,
each index may fluctuate at a different pace, driving variability in the prices paid for jet fuel. Furthermore, under these contractual
each index may fluctuate at a different pace, driving variability in the prices paid for jet fuel. Furthermore, under these contractual
arrangements, approximately 70% of our jet fuel is purchased based on the index price for the preceding week, with the remainder of
arrangements, approximately 70% of our jet fuel is purchased based on the index price for the preceding week, with the remainder of
our purchases tied primarily to the index price for the preceding month and preceding day, rather than based on daily spot rates. These
our purchases tied primarily to the index price for the preceding month and preceding day, rather than based on daily spot rates. These
contractual provisions mitigate the impact of rapidly changing daily spot rates on our jet fuel purchases.
contractual provisions mitigate the impact of rapidly changing daily spot rates on our jet fuel purchases.

Because of the factors described above, our operating results may be affected should the market price of fuel suddenly change by a
Because of the factors described above, our operating results may be affected should the market price of fuel suddenly change by a
significant amount or change by amounts that do not result in an adjustment in our fuel surcharges, which can significantly affect our
significant amount or change by amounts that do not result in an adjustment in our fuel surcharges, which can significantly affect our
earnings either positively or negatively in the short-term. For more information, see “Item 1A. Risk Factors.”
earnings either positively or negatively in the short-term. For more information, see “Item 1A. Risk Factors.”

We routinely review our fuel surcharges and periodically update the tables used to determine our fuel surcharges at all of our
We routinely review our fuel surcharges and periodically update the tables used to determine our fuel surcharges at all of our
transportation segments. The net impact of fuel on operating income described below and for each segment below does not include the
transportation segments. The net impact of fuel on operating income described below and for each segment below does not include the
impact from these ordinary-course table changes.
impact from these ordinary-course table changes.

The net impact of fuel had a modest benefit to operating income in 2021 as decreased fuel prices outpaced lower fuel surcharges.
The net impact of fuel had a modest benefit to operating income in 2021 as decreased fuel prices outpaced lower fuel surcharges.

The net impact of fuel on our operating results does not consider the effects that fuel surcharge levels may have on our business,
The net impact of fuel on our operating results does not consider the effects that fuel surcharge levels may have on our business,
including changes in demand and shifts in the mix of services purchased by our customers. In addition, our purchased transportation
including changes in demand and shifts in the mix of services purchased by our customers. In addition, our purchased transportation
expense may be impacted by fuel costs. While fluctuations in fuel surcharge percentages can be significant from period to period, fuel
expense may be impacted by fuel costs. While fluctuations in fuel surcharge percentages can be significant from period to period, fuel
surcharges represent one of the many individual components of our pricing structure that impact our overall revenue and yield.
surcharges represent one of the many individual components of our pricing structure that impact our overall revenue and yield.
Additional components include the mix of services sold, the base price and extra service charges we obtain for these services and the
Additional components include the mix of services sold, the base price and extra service charges we obtain for these services and the
level of pricing discounts offered.
level of pricing discounts offered.

Interest expense increased $121 million in 2021 primarily due to our U.S. and euro debt issuances during the year. As part of our

capital allocation strategy, we issued $3.25 billion of senior unsecured debt under our shelf registration statement during 2021 and

used the net proceeds to redeem outstanding debt. In connection with our debt restructuring, we recognized a loss on debt

extinguishment of $393 million ($297 million, net of tax, or $1.11 per diluted share). See Note 7 of the accompanying consolidated

financial statements for more information.

Retirement Plans MTM Adjustments

We incurred a pre-tax, noncash MTM net gain of $1.2 billion in 2021 ($936 million, net of tax, or $3.48 per diluted share) and a net

loss of $794 million in 2020 ($583 million, net of tax, or $2.22 per diluted share) from actuarial adjustments to pension and

postretirement healthcare plans related to the year-end measurement of plan assets and liabilities. The net gain in 2021 is attributable

to higher than expected asset returns and an improved discount rate. The net loss in 2020 is attributable to a significantly lower

discount rate, partially offset by higher than expected asset returns.

In addition, we incurred a pre-tax, noncash MTM net loss of $52 million ($41 million, net of tax, or $0.15 per diluted share) in 2021

related to amendments to the TNT Express Netherlands Pension Plan. Benefits for approximately 2,100 employees were frozen

effective December 31, 2020. On January 1, 2021, these employees began earning pension benefits under a separate, multi-employer

pension plan. This $52 million net loss consists of a $106 million MTM loss due to a lower discount rate and a $54 million curtailment

For more information, see the “Critical Accounting Estimates” section of this MD&A and Note 1 and Note 14 of the accompanying

gain.

consolidated financial statements.

Income Taxes

A reconciliation of total income tax expense and the amount computed by applying the statutory federal income tax to income before

income taxes for the years ended May 31 is as follows (dollars in millions):

Taxes computed at federal statutory rate

(Decreases) increases in income tax from:

Benefit from U.S. tax loss carryback to prior years

State and local income taxes, net of federal benefit

Foreign operations

Benefits from share-based payments

Uncertain tax positions

Foreign tax rate enactments

Non-deductible expenses

Valuation allowance

Goodwill impairment charges

Other, net

Provision for income taxes

Effective Tax Rate

U.S. deferred tax adjustment related to foreign operations

2021

2020

1,401

(279 )

179

138

(69 )

(61 )

—

1,443

21.6 %

350

(71 )

(5 )

(14 )

(10 )

(129 )

(25 )

383

23.0 %

On March 27, 2020, the CARES Act was enacted to address the economic impact of the COVID-19 pandemic in the United States.

Among other things, the CARES Act allows a five-year carryback period for tax losses generated in 2019 through 2021. The 2021 tax

provision includes a benefit of $279 million from an increase in our 2020 tax loss that the CARES Act allows to be carried back to

2015, when the U.S. federal income tax rate was 35%. The increase in our estimated 2020 tax loss is attributable to our Application

for Change in Accounting Method discussed below, voluntary contributions to our tax-qualified U.S. domestic pension plans (“U.S.

Pension Plans”) and other accelerated deductions claimed on the 2020 tax return filed in 2021. The 2021 tax provision also includes a

benefit of $66 million from a tax rate increase in the Netherlands applied to our deferred tax asset balances and was unfavorably

impacted by an increase in uncertain tax positions for matters in multiple jurisdictions.

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- 50 -

- 51 -

Fuel

May 31:

The following graph for our transportation segments shows our average cost of vehicle and jet fuel per gallon for the years ended

$4.00

$3.00

$2.00

$1.00

Average Fuel Cost per Gallon

$2.79

$3.05

$2.69

$2.47

$1.93

$2.21

$1.78

$1.44

2018

2019

2020

2021

Vehicle

Jet

Fuel expense decreased 9% during 2021 due to lower fuel prices. Fuel prices represent only one component of the factors we consider

meaningful in understanding the impact of fuel on our business. Consideration must also be given to the fuel surcharge revenue we

collect. Accordingly, we believe discussion of the net impact of fuel on our results, which is a comparison of the year-over-year

change in these two factors, is important to understand the impact of fuel on our business. In order to provide information about the

impact of fuel surcharges on the trend in revenue and yield growth, we have included the comparative weighted-average fuel

surcharge percentages in effect for 2021 and 2020 in the accompanying discussions of each of our transportation segments.

eight weeks.

The manner in which we purchase fuel also influences the net impact of fuel on our results. For example, our contracts for jet fuel

purchases at FedEx Express are tied to various indices, including the U.S. Gulf Coast index. While many of these indices are aligned,

each index may fluctuate at a different pace, driving variability in the prices paid for jet fuel. Furthermore, under these contractual

arrangements, approximately 70% of our jet fuel is purchased based on the index price for the preceding week, with the remainder of

our purchases tied primarily to the index price for the preceding month and preceding day, rather than based on daily spot rates. These

contractual provisions mitigate the impact of rapidly changing daily spot rates on our jet fuel purchases.

Because of the factors described above, our operating results may be affected should the market price of fuel suddenly change by a

significant amount or change by amounts that do not result in an adjustment in our fuel surcharges, which can significantly affect our

earnings either positively or negatively in the short-term. For more information, see “Item 1A. Risk Factors.”

We routinely review our fuel surcharges and periodically update the tables used to determine our fuel surcharges at all of our

transportation segments. The net impact of fuel on operating income described below and for each segment below does not include the

impact from these ordinary-course table changes.

The net impact of fuel had a modest benefit to operating income in 2021 as decreased fuel prices outpaced lower fuel surcharges.

The net impact of fuel on our operating results does not consider the effects that fuel surcharge levels may have on our business,

including changes in demand and shifts in the mix of services purchased by our customers. In addition, our purchased transportation

expense may be impacted by fuel costs. While fluctuations in fuel surcharge percentages can be significant from period to period, fuel

surcharges represent one of the many individual components of our pricing structure that impact our overall revenue and yield.

Additional components include the mix of services sold, the base price and extra service charges we obtain for these services and the

level of pricing discounts offered.

Other Income and Expense
Other Income and Expense

Interest expense increased $121 million in 2021 primarily due to our U.S. and euro debt issuances during the year. As part of our
Interest expense increased $121 million in 2021 primarily due to our U.S. and euro debt issuances during the year. As part of our
capital allocation strategy, we issued $3.25 billion of senior unsecured debt under our shelf registration statement during 2021 and
capital allocation strategy, we issued $3.25 billion of senior unsecured debt under our shelf registration statement during 2021 and
used the net proceeds to redeem outstanding debt. In connection with our debt restructuring, we recognized a loss on debt
used the net proceeds to redeem outstanding debt. In connection with our debt restructuring, we recognized a loss on debt
extinguishment of $393 million ($297 million, net of tax, or $1.11 per diluted share). See Note 7 of the accompanying consolidated
extinguishment of $393 million ($297 million, net of tax, or $1.11 per diluted share). See Note 7 of the accompanying consolidated
financial statements for more information.
financial statements for more information.

Retirement Plans MTM Adjustments
Retirement Plans MTM Adjustments

We incurred a pre-tax, noncash MTM net gain of $1.2 billion in 2021 ($936 million, net of tax, or $3.48 per diluted share) and a net
We incurred a pre-tax, noncash MTM net gain of $1.2 billion in 2021 ($936 million, net of tax, or $3.48 per diluted share) and a net
loss of $794 million in 2020 ($583 million, net of tax, or $2.22 per diluted share) from actuarial adjustments to pension and
loss of $794 million in 2020 ($583 million, net of tax, or $2.22 per diluted share) from actuarial adjustments to pension and
postretirement healthcare plans related to the year-end measurement of plan assets and liabilities. The net gain in 2021 is attributable
postretirement healthcare plans related to the year-end measurement of plan assets and liabilities. The net gain in 2021 is attributable
to higher than expected asset returns and an improved discount rate. The net loss in 2020 is attributable to a significantly lower
to higher than expected asset returns and an improved discount rate. The net loss in 2020 is attributable to a significantly lower
discount rate, partially offset by higher than expected asset returns.
discount rate, partially offset by higher than expected asset returns.

In addition, we incurred a pre-tax, noncash MTM net loss of $52 million ($41 million, net of tax, or $0.15 per diluted share) in 2021
In addition, we incurred a pre-tax, noncash MTM net loss of $52 million ($41 million, net of tax, or $0.15 per diluted share) in 2021
related to amendments to the TNT Express Netherlands Pension Plan. Benefits for approximately 2,100 employees were frozen
related to amendments to the TNT Express Netherlands Pension Plan. Benefits for approximately 2,100 employees were frozen
effective December 31, 2020. On January 1, 2021, these employees began earning pension benefits under a separate, multi-employer
effective December 31, 2020. On January 1, 2021, these employees began earning pension benefits under a separate, multi-employer
pension plan. This $52 million net loss consists of a $106 million MTM loss due to a lower discount rate and a $54 million curtailment
pension plan. This $52 million net loss consists of a $106 million MTM loss due to a lower discount rate and a $54 million curtailment
gain.
gain.

For more information, see the “Critical Accounting Estimates” section of this MD&A and Note 1 and Note 14 of the accompanying
For more information, see the “Critical Accounting Estimates” section of this MD&A and Note 1 and Note 14 of the accompanying
consolidated financial statements.
consolidated financial statements.

Income Taxes
Income Taxes

A reconciliation of total income tax expense and the amount computed by applying the statutory federal income tax to income before
A reconciliation of total income tax expense and the amount computed by applying the statutory federal income tax to income before
income taxes for the years ended May 31 is as follows (dollars in millions):
income taxes for the years ended May 31 is as follows (dollars in millions):

Most of our fuel surcharges are adjusted on a weekly basis. The fuel surcharge is based on a weekly fuel price from two weeks prior to

the week in which it is assessed. Some FedEx Express international fuel surcharges incorporate a timing lag of approximately six to

Taxes computed at federal statutory rate
Taxes computed at federal statutory rate
(Decreases) increases in income tax from:
(Decreases) increases in income tax from:

2021
2021

2020
2020

$
$

1,401
1,401

$
$

Benefit from U.S. tax loss carryback to prior years
Benefit from U.S. tax loss carryback to prior years
State and local income taxes, net of federal benefit
State and local income taxes, net of federal benefit
Foreign operations
Foreign operations
Benefits from share-based payments
Benefits from share-based payments
Uncertain tax positions
Uncertain tax positions
Foreign tax rate enactments
Foreign tax rate enactments
Non-deductible expenses
Non-deductible expenses
Valuation allowance
Valuation allowance
Goodwill impairment charges
Goodwill impairment charges
U.S. deferred tax adjustment related to foreign operations
U.S. deferred tax adjustment related to foreign operations
Other, net
Other, net

Provision for income taxes
Provision for income taxes
Effective Tax Rate
Effective Tax Rate

$
$

(279 )
(279 )
179
179
138
138
(69 )
(69 )
65
65
(61 )
(61 )
53
53
14
14
—
—
—
—
2
2
1,443
1,443
21.6 %
21.6 %

$
$

350
350

(71 )
(71 )
53
53
38
38
(5 )
(5 )
(14 )
(14 )
(10 )
(10 )
70
70
(129 )
(129 )
75
75
51
51
(25 )
(25 )
383
383
23.0 %
23.0 %

On March 27, 2020, the CARES Act was enacted to address the economic impact of the COVID-19 pandemic in the United States.
On March 27, 2020, the CARES Act was enacted to address the economic impact of the COVID-19 pandemic in the United States.
Among other things, the CARES Act allows a five-year carryback period for tax losses generated in 2019 through 2021. The 2021 tax
Among other things, the CARES Act allows a five-year carryback period for tax losses generated in 2019 through 2021. The 2021 tax
provision includes a benefit of $279 million from an increase in our 2020 tax loss that the CARES Act allows to be carried back to
provision includes a benefit of $279 million from an increase in our 2020 tax loss that the CARES Act allows to be carried back to
2015, when the U.S. federal income tax rate was 35%. The increase in our estimated 2020 tax loss is attributable to our Application
2015, when the U.S. federal income tax rate was 35%. The increase in our estimated 2020 tax loss is attributable to our Application
for Change in Accounting Method discussed below, voluntary contributions to our tax-qualified U.S. domestic pension plans (“U.S.
for Change in Accounting Method discussed below, voluntary contributions to our tax-qualified U.S. domestic pension plans (“U.S.
Pension Plans”) and other accelerated deductions claimed on the 2020 tax return filed in 2021. The 2021 tax provision also includes a
Pension Plans”) and other accelerated deductions claimed on the 2020 tax return filed in 2021. The 2021 tax provision also includes a
benefit of $66 million from a tax rate increase in the Netherlands applied to our deferred tax asset balances and was unfavorably
benefit of $66 million from a tax rate increase in the Netherlands applied to our deferred tax asset balances and was unfavorably
impacted by an increase in uncertain tax positions for matters in multiple jurisdictions.
impacted by an increase in uncertain tax positions for matters in multiple jurisdictions.

- 50 -

- 51 -
- 51 -

We filed an application with the Internal Revenue Service (“IRS”) in 2020 requesting approval to change our accounting method for
We filed an application with the Internal Revenue Service (“IRS”) in 2020 requesting approval to change our accounting method for
depreciation to allow retroactive application of tax regulations issued during 2020 on certain assets placed in service during 2018 and
depreciation to allow retroactive application of tax regulations issued during 2020 on certain assets placed in service during 2018 and
2019. During 2021, the IRS issued guidance granting automatic approval to change the method of accounting for these assets resulting
2019. During 2021, the IRS issued guidance granting automatic approval to change the method of accounting for these assets resulting
in an income tax benefit of $130 million.
in an income tax benefit of $130 million.

The 2020 tax provision includes a benefit of $133 million from the reduction of a valuation allowance on certain foreign tax loss
The 2020 tax provision includes a benefit of $133 million from the reduction of a valuation allowance on certain foreign tax loss
carryforwards and a benefit of $71 million in connection with our estimated 2020 tax loss that the CARES Act allows to be carried
carryforwards and a benefit of $71 million in connection with our estimated 2020 tax loss that the CARES Act allows to be carried
back to 2015, a tax year when the U.S. federal income tax rate was 35%. The 2020 tax provision also includes a deferred income tax
back to 2015, a tax year when the U.S. federal income tax rate was 35%. The 2020 tax provision also includes a deferred income tax
expense of $51 million for a change in deferred tax balances related to future foreign tax credits from our international structure as a
expense of $51 million for a change in deferred tax balances related to future foreign tax credits from our international structure as a
result of changes in legal entity forecasts during the fourth quarter. The 2020 effective tax rate was negatively impacted by decreased
result of changes in legal entity forecasts during the fourth quarter. The 2020 effective tax rate was negatively impacted by decreased
earnings in certain non-U.S. jurisdictions.
earnings in certain non-U.S. jurisdictions.

We are subject to taxation in the U.S. and various U.S. state, local and foreign jurisdictions. We are currently under examination by
We are subject to taxation in the U.S. and various U.S. state, local and foreign jurisdictions. We are currently under examination by
the IRS for the 2016 through 2019 tax years. It is reasonably possible that certain income tax return proceedings will be completed
the IRS for the 2016 through 2019 tax years. It is reasonably possible that certain income tax return proceedings will be completed
during the next 12 months and could result in a change in our balance of unrecognized tax benefits. However, we believe we have
during the next 12 months and could result in a change in our balance of unrecognized tax benefits. However, we believe we have
recorded adequate amounts of tax, including interest and penalties, for any adjustments expected to occur.
recorded adequate amounts of tax, including interest and penalties, for any adjustments expected to occur.

During 2021, we filed suit in U.S. District Court for the Western District of Tennessee challenging the validity of a tax regulation
During 2021, we filed suit in U.S. District Court for the Western District of Tennessee challenging the validity of a tax regulation
related to the one-time transition tax on unrepatriated foreign earnings, which was enacted as part of the Tax Cuts and Jobs Act
related to the one-time transition tax on unrepatriated foreign earnings, which was enacted as part of the Tax Cuts and Jobs Act
(“TCJA”). Our lawsuit seeks to have the court declare this regulation invalid and order the refund of overpayments of U.S. federal
(“TCJA”). Our lawsuit seeks to have the court declare this regulation invalid and order the refund of overpayments of U.S. federal
income taxes for 2018 and 2019 attributable to the denial of foreign tax credits under the regulation. We have recorded a cumulative
income taxes for 2018 and 2019 attributable to the denial of foreign tax credits under the regulation. We have recorded a cumulative
benefit of $233 million through 2019 attributable to our interpretation of the TCJA and the Internal Revenue Code. We continue to
benefit of $233 million through 2019 attributable to our interpretation of the TCJA and the Internal Revenue Code. We continue to
pursue this lawsuit; however, if we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit
pursue this lawsuit; however, if we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit
previously recorded.
previously recorded.

For more information on income taxes, see the “Critical Accounting Estimates” section of this MD&A and Note 13 of the
For more information on income taxes, see the “Critical Accounting Estimates” section of this MD&A and Note 13 of the
accompanying consolidated financial statements.
accompanying consolidated financial statements.

Business Acquisitions
Business Acquisitions

See Note 4 of the accompanying consolidated financial statements for a discussion of business acquisitions.
See Note 4 of the accompanying consolidated financial statements for a discussion of business acquisitions.

Outlook
Outlook

During 2022, we expect volume and yield growth across our transportation segments to drive improved revenue and operating income.
During 2022, we expect volume and yield growth across our transportation segments to drive improved revenue and operating income.
We anticipate our volume to continue to benefit from growing demand for our e-commerce services and international export package
We anticipate our volume to continue to benefit from growing demand for our e-commerce services and international export package
services. We also expect to continue to incur higher costs required to meet anticipated demand, including higher labor costs as a result
services. We also expect to continue to incur higher costs required to meet anticipated demand, including higher labor costs as a result
of challenging labor markets. However, variable incentive compensation expenses are not expected to be an expense headwind in
of challenging labor markets. However, variable incentive compensation expenses are not expected to be an expense headwind in
2022.
2022.

The uncertainty of the COVID-19 pandemic is expected to continue to impact our business in 2022, as the extent and timing of the
The uncertainty of the COVID-19 pandemic is expected to continue to impact our business in 2022, as the extent and timing of the
post-pandemic economic recovery remains uncertain. We expect continued demand growth for our e-commerce services and global
post-pandemic economic recovery remains uncertain. We expect continued demand growth for our e-commerce services and global
capacity constraints to continue driving strong demand for international export shipments in 2022. We will continue to manage
capacity constraints to continue driving strong demand for international export shipments in 2022. We will continue to manage
network capacity to the demand levels, flexing our network and making adjustments as needed to align with volumes and operating
network capacity to the demand levels, flexing our network and making adjustments as needed to align with volumes and operating
conditions.
conditions.

We will continue optimizing our FedEx Ground seven-day-per-week residential delivery network capacity to meet evolving customer
We will continue optimizing our FedEx Ground seven-day-per-week residential delivery network capacity to meet evolving customer
needs in 2022. In addition, we will continue to focus on last-mile delivery optimization by directing certain U.S. day-definite FedEx
needs in 2022. In addition, we will continue to focus on last-mile delivery optimization by directing certain U.S. day-definite FedEx
Express shipments into the FedEx Ground network to increase efficiency and lower our cost-to-serve. We also are focused on
Express shipments into the FedEx Ground network to increase efficiency and lower our cost-to-serve. We also are focused on
improving revenue quality and lowering costs through investments in technology aimed at improving productivity and safety.
improving revenue quality and lowering costs through investments in technology aimed at improving productivity and safety.

We expect to complete the final phase of FedEx Express and TNT Express international air network interoperability in early calendar
We expect to complete the final phase of FedEx Express and TNT Express international air network interoperability in early calendar
2022 allowing us to leverage the capabilities that TNT Express adds to our portfolio, which is expected to improve our European
2022 allowing us to leverage the capabilities that TNT Express adds to our portfolio, which is expected to improve our European
revenue and profitability.
revenue and profitability.

We expect to incur approximately $150 million of TNT Express integration expenses in 2022 in the form of professional fees, outside
We expect to incur approximately $150 million of TNT Express integration expenses in 2022 in the form of professional fees, outside
service contracts, salaries and wages and other operating expenses. We now expect the aggregate integration program expenses to be
service contracts, salaries and wages and other operating expenses. We now expect the aggregate integration program expenses to be
approximately $1.8 billion through the completion of the physical network integration of TNT Express into FedEx Express in 2022,
approximately $1.8 billion through the completion of the physical network integration of TNT Express into FedEx Express in 2022,
which is slightly higher than our previous estimates due to costs associated with further optimizing our international legal entity
which is slightly higher than our previous estimates due to costs associated with further optimizing our international legal entity
structures and improving back-office automation to enhance long-term cost savings.
structures and improving back-office automation to enhance long-term cost savings.

During 2022, we will continue to execute initiatives in addition to the integration to transform and optimize the FedEx Express

international business, particularly in Europe. These actions are focused on reducing the complexity and fragmentation of our

international business, improving efficiency to meet changing customer expectations and business dynamics, lowering costs,

increasing profitability and improving service levels. We expect to incur additional costs, over multiple years, including

transformation costs and capital investments related to these actions. As part of this strategy, in January 2021 we announced a

workforce reduction plan in Europe. We expect the pre-tax cost of the severance benefits to be provided under the plan to range from

$300 million to $575 million in cash expenditures through fiscal 2023. We expect savings from our business realignment activities to

be between $275 million and $350 million on an annualized basis beginning in fiscal 2024. See the “Business Realignment Costs”

section of this MD&A for additional information.

Our capital expenditures for 2022 are expected to be approximately $7.2 billion, an increase of $1.3 billion from 2021 due to

investments in capacity to support increased volume levels, facility modernization, as well as replacement capital spend which was

postponed in 2021 to improve liquidity and strengthen our financial position. Our 2022 expected capital expenditures include

investments in aircraft fleet modernization, strategic investments to increase capacity and improve productivity and safety, and the

FedEx Express Indianapolis and Memphis hub modernization and expansion programs.

Our aircraft fleet modernization and hub modernization and expansion programs at FedEx Express are multi-year programs that will

entail significant investments over the next several years. See the “Contractual Cash Obligations and Off-Balance Sheet

Arrangements” section of this MD&A for details of our capital commitments for 2022 and beyond. We will continue to evaluate our

investments in critical long-term strategic projects to ensure our capital expenditures are expected to generate high returns on

investment and are balanced with our outlook for global economic conditions. For additional details on key 2022 capital projects, refer

to the “Financial Condition – Capital Resources” and “Financial Condition – Liquidity Outlook” sections of this MD&A.

See “Item 1A. Risk Factors” and “Forward-Looking Statements” for a discussion of these and other potential risks and uncertainties

that could materially affect our future performance.

Seasonality of Business

Our businesses are cyclical in nature, as seasonal fluctuations affect volumes, revenue and earnings. Historically, the U.S. express

package business experiences an increase in volumes in late November and December. International business, particularly in the Asia-

to-U.S. market, peaks in October and November in advance of the U.S. holiday sales season. Our first and third fiscal quarters,

because they are summer vacation and post winter-holiday seasons, have historically experienced lower volumes relative to other

periods. Normally, the fall is the busiest shipping period for FedEx Ground, while late December, June and July are the slowest

periods. However, FedEx Ground experienced peak-level volumes since the fourth quarter of 2020 due to the COVID-19 pandemic.

For FedEx Freight, the spring and fall are the busiest periods and the latter part of December through February is the slowest

period. Shipment levels, operating costs and earnings for each of our companies can also be adversely affected by inclement weather,

particularly the impact of severe winter weather in our third fiscal quarter. See “Item 1A. Risk Factors” for more information.

See Note 2 of the accompanying consolidated financial statements for a discussion of recent accounting guidance.

RECENT ACCOUNTING GUIDANCE

REPORTABLE SEGMENTS

FedEx Express, FedEx Ground and FedEx Freight represent our major service lines and, along with FedEx Services, constitute our

reportable segments. Our reportable segments include the following businesses:

FedEx Express Segment

FedEx Express (express transportation, small-package ground delivery and freight

transportation)

FedEx Custom Critical, Inc. (“FedEx Custom Critical”) (time-critical transportation)

FedEx Cross Border Holdings, Inc. (“FedEx Cross Border”) (cross-border e-commerce

technology and e-commerce transportation solutions)

FedEx Ground Segment

FedEx Ground (small-package ground delivery)

FedEx Freight Segment

FedEx Freight (LTL freight transportation)

FedEx Services Segment

FedEx Services (sales, marketing, information technology, communications, customer

service, technical support, billing and collection services and back-office functions)

- 52 -
- 52 -

- 53 -

We filed an application with the Internal Revenue Service (“IRS”) in 2020 requesting approval to change our accounting method for

depreciation to allow retroactive application of tax regulations issued during 2020 on certain assets placed in service during 2018 and

2019. During 2021, the IRS issued guidance granting automatic approval to change the method of accounting for these assets resulting

in an income tax benefit of $130 million.

The 2020 tax provision includes a benefit of $133 million from the reduction of a valuation allowance on certain foreign tax loss

carryforwards and a benefit of $71 million in connection with our estimated 2020 tax loss that the CARES Act allows to be carried

back to 2015, a tax year when the U.S. federal income tax rate was 35%. The 2020 tax provision also includes a deferred income tax

expense of $51 million for a change in deferred tax balances related to future foreign tax credits from our international structure as a

result of changes in legal entity forecasts during the fourth quarter. The 2020 effective tax rate was negatively impacted by decreased

earnings in certain non-U.S. jurisdictions.

We are subject to taxation in the U.S. and various U.S. state, local and foreign jurisdictions. We are currently under examination by

the IRS for the 2016 through 2019 tax years. It is reasonably possible that certain income tax return proceedings will be completed

during the next 12 months and could result in a change in our balance of unrecognized tax benefits. However, we believe we have

recorded adequate amounts of tax, including interest and penalties, for any adjustments expected to occur.

During 2021, we filed suit in U.S. District Court for the Western District of Tennessee challenging the validity of a tax regulation

related to the one-time transition tax on unrepatriated foreign earnings, which was enacted as part of the Tax Cuts and Jobs Act

(“TCJA”). Our lawsuit seeks to have the court declare this regulation invalid and order the refund of overpayments of U.S. federal

income taxes for 2018 and 2019 attributable to the denial of foreign tax credits under the regulation. We have recorded a cumulative

benefit of $233 million through 2019 attributable to our interpretation of the TCJA and the Internal Revenue Code. We continue to

pursue this lawsuit; however, if we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit

previously recorded.

For more information on income taxes, see the “Critical Accounting Estimates” section of this MD&A and Note 13 of the

accompanying consolidated financial statements.

Business Acquisitions

See Note 4 of the accompanying consolidated financial statements for a discussion of business acquisitions.

Outlook

2022.

conditions.

During 2022, we expect volume and yield growth across our transportation segments to drive improved revenue and operating income.

We anticipate our volume to continue to benefit from growing demand for our e-commerce services and international export package

services. We also expect to continue to incur higher costs required to meet anticipated demand, including higher labor costs as a result

of challenging labor markets. However, variable incentive compensation expenses are not expected to be an expense headwind in

The uncertainty of the COVID-19 pandemic is expected to continue to impact our business in 2022, as the extent and timing of the

post-pandemic economic recovery remains uncertain. We expect continued demand growth for our e-commerce services and global

capacity constraints to continue driving strong demand for international export shipments in 2022. We will continue to manage

network capacity to the demand levels, flexing our network and making adjustments as needed to align with volumes and operating

We will continue optimizing our FedEx Ground seven-day-per-week residential delivery network capacity to meet evolving customer

needs in 2022. In addition, we will continue to focus on last-mile delivery optimization by directing certain U.S. day-definite FedEx

Express shipments into the FedEx Ground network to increase efficiency and lower our cost-to-serve. We also are focused on

improving revenue quality and lowering costs through investments in technology aimed at improving productivity and safety.

We expect to complete the final phase of FedEx Express and TNT Express international air network interoperability in early calendar

2022 allowing us to leverage the capabilities that TNT Express adds to our portfolio, which is expected to improve our European

revenue and profitability.

During 2022, we will continue to execute initiatives in addition to the integration to transform and optimize the FedEx Express
During 2022, we will continue to execute initiatives in addition to the integration to transform and optimize the FedEx Express
international business, particularly in Europe. These actions are focused on reducing the complexity and fragmentation of our
international business, particularly in Europe. These actions are focused on reducing the complexity and fragmentation of our
international business, improving efficiency to meet changing customer expectations and business dynamics, lowering costs,
international business, improving efficiency to meet changing customer expectations and business dynamics, lowering costs,
increasing profitability and improving service levels. We expect to incur additional costs, over multiple years, including
increasing profitability and improving service levels. We expect to incur additional costs, over multiple years, including
transformation costs and capital investments related to these actions. As part of this strategy, in January 2021 we announced a
transformation costs and capital investments related to these actions. As part of this strategy, in January 2021 we announced a
workforce reduction plan in Europe. We expect the pre-tax cost of the severance benefits to be provided under the plan to range from
workforce reduction plan in Europe. We expect the pre-tax cost of the severance benefits to be provided under the plan to range from
$300 million to $575 million in cash expenditures through fiscal 2023. We expect savings from our business realignment activities to
$300 million to $575 million in cash expenditures through fiscal 2023. We expect savings from our business realignment activities to
be between $275 million and $350 million on an annualized basis beginning in fiscal 2024. See the “Business Realignment Costs”
be between $275 million and $350 million on an annualized basis beginning in fiscal 2024. See the “Business Realignment Costs”
section of this MD&A for additional information.
section of this MD&A for additional information.

Our capital expenditures for 2022 are expected to be approximately $7.2 billion, an increase of $1.3 billion from 2021 due to
Our capital expenditures for 2022 are expected to be approximately $7.2 billion, an increase of $1.3 billion from 2021 due to
investments in capacity to support increased volume levels, facility modernization, as well as replacement capital spend which was
investments in capacity to support increased volume levels, facility modernization, as well as replacement capital spend which was
postponed in 2021 to improve liquidity and strengthen our financial position. Our 2022 expected capital expenditures include
postponed in 2021 to improve liquidity and strengthen our financial position. Our 2022 expected capital expenditures include
investments in aircraft fleet modernization, strategic investments to increase capacity and improve productivity and safety, and the
investments in aircraft fleet modernization, strategic investments to increase capacity and improve productivity and safety, and the
FedEx Express Indianapolis and Memphis hub modernization and expansion programs.
FedEx Express Indianapolis and Memphis hub modernization and expansion programs.

Our aircraft fleet modernization and hub modernization and expansion programs at FedEx Express are multi-year programs that will
Our aircraft fleet modernization and hub modernization and expansion programs at FedEx Express are multi-year programs that will
entail significant investments over the next several years. See the “Contractual Cash Obligations and Off-Balance Sheet
entail significant investments over the next several years. See the “Contractual Cash Obligations and Off-Balance Sheet
Arrangements” section of this MD&A for details of our capital commitments for 2022 and beyond. We will continue to evaluate our
Arrangements” section of this MD&A for details of our capital commitments for 2022 and beyond. We will continue to evaluate our
investments in critical long-term strategic projects to ensure our capital expenditures are expected to generate high returns on
investments in critical long-term strategic projects to ensure our capital expenditures are expected to generate high returns on
investment and are balanced with our outlook for global economic conditions. For additional details on key 2022 capital projects, refer
investment and are balanced with our outlook for global economic conditions. For additional details on key 2022 capital projects, refer
to the “Financial Condition – Capital Resources” and “Financial Condition – Liquidity Outlook” sections of this MD&A.
to the “Financial Condition – Capital Resources” and “Financial Condition – Liquidity Outlook” sections of this MD&A.

See “Item 1A. Risk Factors” and “Forward-Looking Statements” for a discussion of these and other potential risks and uncertainties
See “Item 1A. Risk Factors” and “Forward-Looking Statements” for a discussion of these and other potential risks and uncertainties
that could materially affect our future performance.
that could materially affect our future performance.

Seasonality of Business
Seasonality of Business

Our businesses are cyclical in nature, as seasonal fluctuations affect volumes, revenue and earnings. Historically, the U.S. express
Our businesses are cyclical in nature, as seasonal fluctuations affect volumes, revenue and earnings. Historically, the U.S. express
package business experiences an increase in volumes in late November and December. International business, particularly in the Asia-
package business experiences an increase in volumes in late November and December. International business, particularly in the Asia-
to-U.S. market, peaks in October and November in advance of the U.S. holiday sales season. Our first and third fiscal quarters,
to-U.S. market, peaks in October and November in advance of the U.S. holiday sales season. Our first and third fiscal quarters,
because they are summer vacation and post winter-holiday seasons, have historically experienced lower volumes relative to other
because they are summer vacation and post winter-holiday seasons, have historically experienced lower volumes relative to other
periods. Normally, the fall is the busiest shipping period for FedEx Ground, while late December, June and July are the slowest
periods. Normally, the fall is the busiest shipping period for FedEx Ground, while late December, June and July are the slowest
periods. However, FedEx Ground experienced peak-level volumes since the fourth quarter of 2020 due to the COVID-19 pandemic.
periods. However, FedEx Ground experienced peak-level volumes since the fourth quarter of 2020 due to the COVID-19 pandemic.
For FedEx Freight, the spring and fall are the busiest periods and the latter part of December through February is the slowest
For FedEx Freight, the spring and fall are the busiest periods and the latter part of December through February is the slowest
period. Shipment levels, operating costs and earnings for each of our companies can also be adversely affected by inclement weather,
period. Shipment levels, operating costs and earnings for each of our companies can also be adversely affected by inclement weather,
particularly the impact of severe winter weather in our third fiscal quarter. See “Item 1A. Risk Factors” for more information.
particularly the impact of severe winter weather in our third fiscal quarter. See “Item 1A. Risk Factors” for more information.

RECENT ACCOUNTING GUIDANCE
RECENT ACCOUNTING GUIDANCE

See Note 2 of the accompanying consolidated financial statements for a discussion of recent accounting guidance.
See Note 2 of the accompanying consolidated financial statements for a discussion of recent accounting guidance.

REPORTABLE SEGMENTS
REPORTABLE SEGMENTS

FedEx Express, FedEx Ground and FedEx Freight represent our major service lines and, along with FedEx Services, constitute our
FedEx Express, FedEx Ground and FedEx Freight represent our major service lines and, along with FedEx Services, constitute our
reportable segments. Our reportable segments include the following businesses:
reportable segments. Our reportable segments include the following businesses:

FedEx Express Segment
FedEx Express Segment

FedEx Express (express transportation, small-package ground delivery and freight
FedEx Express (express transportation, small-package ground delivery and freight

transportation)
transportation)

FedEx Custom Critical, Inc. (“FedEx Custom Critical”) (time-critical transportation)
FedEx Custom Critical, Inc. (“FedEx Custom Critical”) (time-critical transportation)
FedEx Cross Border Holdings, Inc. (“FedEx Cross Border”) (cross-border e-commerce
FedEx Cross Border Holdings, Inc. (“FedEx Cross Border”) (cross-border e-commerce

technology and e-commerce transportation solutions)
technology and e-commerce transportation solutions)

We expect to incur approximately $150 million of TNT Express integration expenses in 2022 in the form of professional fees, outside

service contracts, salaries and wages and other operating expenses. We now expect the aggregate integration program expenses to be

FedEx Freight Segment
FedEx Freight Segment

FedEx Freight (LTL freight transportation)
FedEx Freight (LTL freight transportation)

FedEx Ground Segment
FedEx Ground Segment

FedEx Ground (small-package ground delivery)
FedEx Ground (small-package ground delivery)

approximately $1.8 billion through the completion of the physical network integration of TNT Express into FedEx Express in 2022,

which is slightly higher than our previous estimates due to costs associated with further optimizing our international legal entity

structures and improving back-office automation to enhance long-term cost savings.

FedEx Services Segment
FedEx Services Segment

FedEx Services (sales, marketing, information technology, communications, customer
FedEx Services (sales, marketing, information technology, communications, customer
service, technical support, billing and collection services and back-office functions)
service, technical support, billing and collection services and back-office functions)

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- 53 -
- 53 -

FEDEX SERVICES SEGMENT
FEDEX SERVICES SEGMENT

FEDEX EXPRESS SEGMENT

The FedEx Services segment provides direct and indirect support to our operating segments, and we allocate all of the net operating
The FedEx Services segment provides direct and indirect support to our operating segments, and we allocate all of the net operating
costs of the FedEx Services segment to reflect the full cost of operating our businesses in the results of those segments. We review and
costs of the FedEx Services segment to reflect the full cost of operating our businesses in the results of those segments. We review and
evaluate the performance of our transportation segments based on operating income (inclusive of FedEx Services segment
evaluate the performance of our transportation segments based on operating income (inclusive of FedEx Services segment
allocations). For the FedEx Services segment, performance is evaluated based on the impact of its total allocated net operating costs
allocations). For the FedEx Services segment, performance is evaluated based on the impact of its total allocated net operating costs
on our operating segments.
on our operating segments.

The operating expense line item “Intercompany charges” on the accompanying consolidated financial statements of our transportation
The operating expense line item “Intercompany charges” on the accompanying consolidated financial statements of our transportation
segments reflects the allocations from the FedEx Services segment to the respective operating segments. The allocations of net
segments reflects the allocations from the FedEx Services segment to the respective operating segments. The allocations of net
operating costs are based on metrics such as relative revenue or estimated services provided. We believe these allocations approximate
operating costs are based on metrics such as relative revenue or estimated services provided. We believe these allocations approximate
the net cost of providing these functions. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our
the net cost of providing these functions. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our
businesses.
businesses.

CORPORATE, OTHER AND ELIMINATIONS
CORPORATE, OTHER AND ELIMINATIONS

Corporate and other includes corporate headquarters costs for executive officers and certain legal and finance functions, as well as
Corporate and other includes corporate headquarters costs for executive officers and certain legal and finance functions, as well as
certain other costs and credits not attributed to our core business, including certain costs associated with developing our innovate
certain other costs and credits not attributed to our core business, including certain costs associated with developing our innovate
digitally strategic pillar. These costs are not allocated to the other business segments.
digitally strategic pillar. These costs are not allocated to the other business segments.

Also included in Corporate and other are the FedEx Office operating segment, which provides an array of document and business
Also included in Corporate and other are the FedEx Office operating segment, which provides an array of document and business
services and retail access to our customers for our package transportation businesses, and the FedEx Logistics operating segment,
services and retail access to our customers for our package transportation businesses, and the FedEx Logistics operating segment,
which provides integrated supply chain management solutions, specialty transportation, customs brokerage and global ocean and air
which provides integrated supply chain management solutions, specialty transportation, customs brokerage and global ocean and air
freight forwarding. Additionally, Corporate and other includes the financial results of ShopRunner, Inc. beginning December 23,
freight forwarding. Additionally, Corporate and other includes the financial results of ShopRunner, Inc. beginning December 23,
2020.
2020.

In 2021, the decrease in revenue in “Corporate, other and eliminations” was due to a decline in non-shipping revenue at FedEx Office
In 2021, the decrease in revenue in “Corporate, other and eliminations” was due to a decline in non-shipping revenue at FedEx Office
resulting from the COVID-19 pandemic, partially offset by higher revenue at FedEx Logistics. The higher revenue at FedEx Logistics
resulting from the COVID-19 pandemic, partially offset by higher revenue at FedEx Logistics. The higher revenue at FedEx Logistics
in 2021 is driven by increased volumes and yields also resulting from the COVID-19 pandemic, partially offset by the transfer of
in 2021 is driven by increased volumes and yields also resulting from the COVID-19 pandemic, partially offset by the transfer of
FedEx Custom Critical and FedEx Cross Border into the FedEx Express segment.
FedEx Custom Critical and FedEx Cross Border into the FedEx Express segment.

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable
Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable
segment in order to optimize our resources. For example, during 2021 FedEx Freight provided road and intermodal support for both
segment in order to optimize our resources. For example, during 2021 FedEx Freight provided road and intermodal support for both
FedEx Ground and FedEx Express, and FedEx Ground provided delivery support for certain FedEx Express packages as part of our
FedEx Ground and FedEx Express, and FedEx Ground provided delivery support for certain FedEx Express packages as part of our
last-mile optimization efforts. In addition, FedEx Express is working with FedEx Logistics to secure air charters for U.S. customers.
last-mile optimization efforts. In addition, FedEx Express is working with FedEx Logistics to secure air charters for U.S. customers.
Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenue of the
Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenue of the
billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenue and expenses are
billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenue and expenses are
eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are
eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are
not material.
not material.

FedEx Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight including

priority, deferred and economy services, which provide delivery on a time-definite or day-definite basis. The following table compares

revenue, operating expenses, operating income (dollars in millions), operating margin and operating expenses as a percent of revenue for

Total U.S. domestic package revenue

Total international export package revenue

the years ended May 31:

Revenue:

Package:

U.S. overnight box

U.S. overnight envelope

U.S. deferred

International priority

International economy

International domestic(1)

Total package revenue

Freight:

U.S.

International priority

International economy

International airfreight

Total freight revenue

Other(2)

Total revenue

Operating expenses:

Salaries and employee benefits

Purchased transportation

Rentals and landing fees

Depreciation and amortization

Fuel

Maintenance and repairs

Business realignment costs

Goodwill and other asset impairment charges

Intercompany charges

Other

Total operating expenses

Operating income

Operating margin

(1)

(2)

2021

2020

Percent

Change

8,116 $

1,791

4,984

14,891

10,317

2,632

12,949

4,640

32,480

3,325

3,030

1,582

245

8,182

1,416

7,234

1,776

4,038

13,048

7,354

3,082

10,436

4,179

27,663

2,998

1,915

1,930

270

7,113

737

16,217

13,764

5,744

2,296

1,946

2,461

2,228

116

—

1,996

6,264

4,832

2,045

1,894

2,664

1,874

—

1,956

5,422

(15 )

(18 )

(9 )

(8 )

182

39,268

34,517

2,810 $

6.7 %

996

2.8 %

390 bp

Percent of Revenue

2021

2020

38.5 38.7

13.7 13.6

5.5

4.6

5.8

5.3

5.8

5.3

7.5

5.3

0.2

5.5

0.3 —

—

4.7

14.9 15.3

93.3 % 97.2 %

42,078

35,513

100.0 % 100.0 %

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

Includes the operations of FedEx Custom Critical beginning March 1, 2020 and FedEx Cross Border beginning June 1, 2020.

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- 54 -

- 55 -

on our operating segments.

The operating expense line item “Intercompany charges” on the accompanying consolidated financial statements of our transportation

segments reflects the allocations from the FedEx Services segment to the respective operating segments. The allocations of net

operating costs are based on metrics such as relative revenue or estimated services provided. We believe these allocations approximate

the net cost of providing these functions. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our

businesses.

CORPORATE, OTHER AND ELIMINATIONS

Corporate and other includes corporate headquarters costs for executive officers and certain legal and finance functions, as well as

certain other costs and credits not attributed to our core business, including certain costs associated with developing our innovate

digitally strategic pillar. These costs are not allocated to the other business segments.

Also included in Corporate and other are the FedEx Office operating segment, which provides an array of document and business

services and retail access to our customers for our package transportation businesses, and the FedEx Logistics operating segment,

which provides integrated supply chain management solutions, specialty transportation, customs brokerage and global ocean and air

freight forwarding. Additionally, Corporate and other includes the financial results of ShopRunner, Inc. beginning December 23,

2020.

In 2021, the decrease in revenue in “Corporate, other and eliminations” was due to a decline in non-shipping revenue at FedEx Office

resulting from the COVID-19 pandemic, partially offset by higher revenue at FedEx Logistics. The higher revenue at FedEx Logistics

in 2021 is driven by increased volumes and yields also resulting from the COVID-19 pandemic, partially offset by the transfer of

FedEx Custom Critical and FedEx Cross Border into the FedEx Express segment.

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable

segment in order to optimize our resources. For example, during 2021 FedEx Freight provided road and intermodal support for both

FedEx Ground and FedEx Express, and FedEx Ground provided delivery support for certain FedEx Express packages as part of our

last-mile optimization efforts. In addition, FedEx Express is working with FedEx Logistics to secure air charters for U.S. customers.

Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenue of the

billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenue and expenses are

eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are

not material.

FEDEX SERVICES SEGMENT

FEDEX EXPRESS SEGMENT
FEDEX EXPRESS SEGMENT

The FedEx Services segment provides direct and indirect support to our operating segments, and we allocate all of the net operating

costs of the FedEx Services segment to reflect the full cost of operating our businesses in the results of those segments. We review and

evaluate the performance of our transportation segments based on operating income (inclusive of FedEx Services segment

allocations). For the FedEx Services segment, performance is evaluated based on the impact of its total allocated net operating costs

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

2021
2021

2020
2020

Percent
Percent
Change
Change

Revenue:
Revenue:

Package:
Package:

U.S. overnight box
U.S. overnight box
U.S. overnight envelope
U.S. overnight envelope
U.S. deferred
U.S. deferred

Total U.S. domestic package revenue
Total U.S. domestic package revenue

International priority
International priority
International economy
International economy

Total international export package revenue
Total international export package revenue

$
$

International domestic(1)
International domestic(1)

Total package revenue
Total package revenue

Freight:
Freight:
U.S.
U.S.
International priority
International priority
International economy
International economy
International airfreight
International airfreight

Total freight revenue
Total freight revenue

Other(2)
Other(2)

Total revenue
Total revenue

Operating expenses:
Operating expenses:

Salaries and employee benefits
Salaries and employee benefits
Purchased transportation
Purchased transportation
Rentals and landing fees
Rentals and landing fees
Depreciation and amortization
Depreciation and amortization
Fuel
Fuel
Maintenance and repairs
Maintenance and repairs
Business realignment costs
Business realignment costs
Goodwill and other asset impairment charges
Goodwill and other asset impairment charges
Intercompany charges
Intercompany charges
Other
Other

Total operating expenses
Total operating expenses

Operating income
Operating income
Operating margin
Operating margin

$
$

8,116 $
8,116 $
1,791
1,791
4,984
4,984
14,891
14,891
10,317
10,317
2,632
2,632
12,949
12,949
4,640
4,640
32,480
32,480

3,325
3,325
3,030
3,030
1,582
1,582
245
245
8,182
8,182
1,416
1,416
42,078
42,078

16,217
16,217
5,744
5,744
2,296
2,296
1,946
1,946
2,461
2,461
2,228
2,228
116
116
—
—
1,996
1,996
6,264
6,264
39,268
39,268
2,810 $
2,810 $
6.7 %
6.7 %

7,234
7,234
1,776
1,776
4,038
4,038
13,048
13,048
7,354
7,354
3,082
3,082
10,436
10,436
4,179
4,179
27,663
27,663

2,998
2,998
1,915
1,915
1,930
1,930
270
270
7,113
7,113
737
737
35,513
35,513

13,764
13,764
4,832
4,832
2,045
2,045
1,894
1,894
2,664
2,664
1,874
1,874
—
—
66
66
1,956
1,956
5,422
5,422
34,517
34,517
996
996
2.8 %
2.8 %

12
12
1
1
23
23
14
14
40
40
(15 )
(15 )
24
24
11
11
17
17

11
11
58
58
(18 )
(18 )
(9 )
(9 )
15
15
92
92
18
18

Percent of Revenue
Percent of Revenue

2021
2021

2020
2020

100.0 % 100.0 %
100.0 % 100.0 %

38.5 38.7
38.5 38.7
13.7 13.6
13.7 13.6
5.8
5.5
5.5
5.8
5.3
4.6
5.3
4.6
7.5
5.8
7.5
5.8
5.3
5.3
5.3
5.3
0.3 —
0.3 —
0.2
0.2
5.5
5.5
14.9 15.3
14.9 15.3
93.3 % 97.2 %
93.3 % 97.2 %

—
—
4.7
4.7

18
18
19
19
12
12
3
3
(8 )
(8 )
19
19
NM
NM
NM
NM
2
2
16
16
14
14
182
182
390 bp
390 bp

(1)
(1)

(2)
(2)

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

Includes the operations of FedEx Custom Critical beginning March 1, 2020 and FedEx Cross Border beginning June 1, 2020.
Includes the operations of FedEx Custom Critical beginning March 1, 2020 and FedEx Cross Border beginning June 1, 2020.

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- 55 -
- 55 -

The following table compares selected statistics (in thousands, except yield amounts) for the years ended May 31:
The following table compares selected statistics (in thousands, except yield amounts) for the years ended May 31:

FedEx Express’s U.S. domestic and outbound fuel surcharge and international fuel surcharges ranged as follows for the years ended

Package Statistics
Package Statistics

Average daily package volume (ADV):
Average daily package volume (ADV):

U.S. overnight box
U.S. overnight box
U.S. overnight envelope
U.S. overnight envelope
U.S. deferred
U.S. deferred

Total U.S. domestic ADV
Total U.S. domestic ADV

International priority
International priority
International economy
International economy

Total international export ADV
Total international export ADV

International domestic(1)
International domestic(1)
Total ADV
Total ADV
Revenue per package (yield):
Revenue per package (yield):

U.S. overnight box
U.S. overnight box
U.S. overnight envelope
U.S. overnight envelope
U.S. deferred
U.S. deferred

U.S. domestic composite
U.S. domestic composite

International priority
International priority
International economy
International economy

International export composite
International export composite

International domestic(1)
International domestic(1)

Composite package yield
Composite package yield

Freight Statistics
Freight Statistics

Average daily freight pounds:
Average daily freight pounds:

U.S.
U.S.
International priority
International priority
International economy
International economy
International airfreight
International airfreight

Total average daily freight pounds
Total average daily freight pounds

Revenue per pound (yield):
Revenue per pound (yield):

U.S.
U.S.
International priority
International priority
International economy
International economy
International airfreight
International airfreight

Composite freight yield
Composite freight yield

2021
2021

2020
2020

Percent Change
Percent Change

1,427
1,427
505
505
1,351
1,351
3,283
3,283
752
752
284
284
1,036
1,036
2,362
2,362
6,681
6,681

22.31 $
22.31 $
13.90
13.90
14.46
14.46
17.79
17.79
53.84
53.84
36.32
36.32
49.03
49.03
7.70
7.70
19.06
19.06

9,231
9,231
6,155
6,155
12,245
12,245
1,469
1,469
29,100
29,100

1.41 $
1.41 $
1.93
1.93
0.51
0.51
0.65
0.65
1.10
1.10

1,211
1,211
521
521
1,076
1,076
2,808
2,808
559
559
282
282
841
841
2,337
2,337
5,986
5,986

23.51
23.51
13.43
13.43
14.78
14.78
18.30
18.30
51.75
51.75
43.03
43.03
48.83
48.83
7.04
7.04
18.19
18.19

8,528
8,528
4,895
4,895
13,450
13,450
1,535
1,535
28,408
28,408

1.38
1.38
1.54
1.54
0.56
0.56
0.69
0.69
0.99
0.99

$
$

18
18
(3 )
(3 )
26
26
17
17
35
35
1
1
23
23
1
1
12
12

(5 )
(5 )
3
3
(2 )
(2 )
(3 )
(3 )
4
4
(16 )
(16 )
—
—
9
9
5
5

8
8
26
26
(9 )
(9 )
(4 )
(4 )
2
2

2
2
25
25
(9 )
(9 )
(6 )
(6 )
11
11

(1)
(1)

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

FedEx Express Segment Revenue
FedEx Express Segment Revenue

FedEx Express segment revenue increased 18% in 2021 primarily due to international export and U.S. domestic package volume
FedEx Express segment revenue increased 18% in 2021 primarily due to international export and U.S. domestic package volume
growth, as well as pricing initiatives resulting from global air freight capacity constraints.
growth, as well as pricing initiatives resulting from global air freight capacity constraints.

International export average daily volumes increased 23% in 2021 led by volume growth from Asia-Pacific and Europe. In addition,
International export average daily volumes increased 23% in 2021 led by volume growth from Asia-Pacific and Europe. In addition,
industry-wide capacity constraints and actions to prioritize premium-yielding products drove a mix shift from international economy
industry-wide capacity constraints and actions to prioritize premium-yielding products drove a mix shift from international economy
to international priority services in 2021. International export package yield increased slightly in 2021 due to favorable exchange rates
to international priority services in 2021. International export package yield increased slightly in 2021 due to favorable exchange rates
and pricing initiatives resulting from global air freight capacity constraints, partially offset by base yield declines and lower fuel
and pricing initiatives resulting from global air freight capacity constraints, partially offset by base yield declines and lower fuel
surcharges. U.S. domestic package average daily volumes increased 17% in 2021 driven by growth in deferred service offerings,
surcharges. U.S. domestic package average daily volumes increased 17% in 2021 driven by growth in deferred service offerings,
reflecting increased e-commerce demand resulting from the COVID-19 pandemic, as well as growth in overnight box service
reflecting increased e-commerce demand resulting from the COVID-19 pandemic, as well as growth in overnight box service
offerings. U.S. domestic package yield decreased 3% in 2021 due to lower package weights and lower fuel surcharges. Average daily
offerings. U.S. domestic package yield decreased 3% in 2021 due to lower package weights and lower fuel surcharges. Average daily
freight pounds increased 2% in 2021 primarily due to volume growth in international priority and U.S. services. Composite freight
freight pounds increased 2% in 2021 primarily due to volume growth in international priority and U.S. services. Composite freight
yield increased 11% in 2021 primarily due to improved base yields. Other revenue increased 92% in 2021 due to the transfer of FedEx
yield increased 11% in 2021 primarily due to improved base yields. Other revenue increased 92% in 2021 due to the transfer of FedEx
Custom Critical and FedEx Cross Border into the FedEx Express segment.
Custom Critical and FedEx Cross Border into the FedEx Express segment.

- 56 -
- 56 -

- 57 -

May 31:

Low

High

Low

High

Low

High

U.S. Domestic and Outbound Fuel Surcharge:

Weighted-average

International Export and Freight Fuel Surcharge:

Weighted-average

International Domestic Fuel Surcharge:

Weighted-average

FedEx Express Segment Operating Income

2021

2020

2.7 %

8.0

4.9

0.3

22.0

12.8

2.6

20.4

6.4

0.5 %

8.6

6.3

—

19.3

14.0

3.2

24.5

7.3

FedEx Express segment operating income increased substantially in 2021 primarily due to international export and U.S. domestic

package volume growth. FedEx Express segment operating results include a pre-tax benefit of approximately $165 million in 2021

from a reduction in aviation excise taxes provided by the CARES Act, which expired on December 31, 2020. These factors were

partially offset by higher variable incentive compensation expense of approximately $800 million in 2021, which includes

approximately $125 million in special bonuses paid in January 2021 to our front-line operational team members. We experienced

constrained commercial air capacity leading to high usage of our aircraft fleet and increased costs of operating our global network in

2021 as result of the COVID-19 pandemic. Results in 2020 were negatively impacted by $66 million of asset impairment charges

associated with the decision to permanently retire certain aircraft and related engines.

FedEx Express segment results include approximately $176 million of TNT Express integration expenses in 2021, a decrease of $46

million from 2020.

Salaries and employee benefits expense increased 18% in 2021 primarily due to staffing to support volume growth and higher variable

incentive compensation expense. In addition, higher labor expense and increased costs associated with network contingencies as a

result of the COVID-19 pandemic contributed to the increase in salaries and employee benefits expense in 2021. Purchased

transportation expense increased 19% in 2021 primarily due to the transfer of FedEx Custom Critical and FedEx Cross Border into the

FedEx Express segment, as well as higher utilization of third-party transportation providers. Other operating expense increased 16% in

2021 primarily due to bad debt expense and additional volume-related expenses. Maintenance and repairs expense increased 19% in

2021 primarily due to additional flight hours as constrained commercial air capacity drove increased usage of owned assets.

Fuel expense decreased 8% in 2021 due to lower fuel prices, partially offset by higher aircraft and vehicle fuel usage. The net impact

of fuel had a slightly negative impact to operating income in 2021 as lower fuel surcharges outpaced decreased fuel prices. See the

“Results of Operations and Outlook – Consolidated Results – Fuel” section of this MD&A for a description and additional discussion

of the net impact of fuel on our operating results.

FedEx Express Segment Outlook

We expect increased demand for our e-commerce services, international export volume growth and pricing initiatives to drive

improved revenue and operating income in 2022. As a result of business growth and service improvement initiatives, we anticipate

increases in staffing costs, purchased transportation and other operating expenses in 2022. We also expect continued high usage of our

aircraft fleet resulting from limited commercial availability on transoceanic lanes.

We expect the FedEx Express segment to incur approximately $125 million of TNT Express integration expenses in 2022. See the

“Outlook” section of this MD&A for additional information regarding the integration of TNT Express.

Capital expenditures at FedEx Express are expected to increase in 2022 primarily related to facility investments and vehicle purchases,

partially offset by a decrease in aircraft-related payments. We continue to make multi-year investments in our facilities of

approximately $1.5 billion to significantly expand the Indianapolis hub and approximately $1.5 billion to modernize the Memphis

World Hub.

The following table compares selected statistics (in thousands, except yield amounts) for the years ended May 31:

FedEx Express’s U.S. domestic and outbound fuel surcharge and international fuel surcharges ranged as follows for the years ended
FedEx Express’s U.S. domestic and outbound fuel surcharge and international fuel surcharges ranged as follows for the years ended
May 31:
May 31:

2021

2020

Percent Change

Package Statistics

Average daily package volume (ADV):

U.S. overnight box

U.S. overnight envelope

U.S. deferred

Total U.S. domestic ADV

International priority

International economy

Total international export ADV

International domestic(1)

Total ADV

Revenue per package (yield):

U.S. overnight box

U.S. overnight envelope

U.S. deferred

U.S. domestic composite

International priority

International economy

International export composite

International domestic(1)

Composite package yield

Freight Statistics

Average daily freight pounds:

U.S.

International priority

International economy

International airfreight

Total average daily freight pounds

Revenue per pound (yield):

U.S.

International priority

International economy

International airfreight

Composite freight yield

FedEx Express Segment Revenue

22.31 $

1,427

505

1,351

3,283

752

284

1,036

2,362

6,681

13.90

14.46

17.79

53.84

36.32

49.03

7.70

19.06

9,231

6,155

12,245

1,469

29,100

1.41 $

1.93

0.51

0.65

1.10

1,211

521

1,076

2,808

559

282

841

2,337

5,986

23.51

13.43

14.78

18.30

51.75

43.03

48.83

7.04

18.19

8,528

4,895

13,450

1,535

28,408

1.38

1.54

0.56

0.69

0.99

(3 )

(5 )

(2 )

(3 )

(16 )

—

(9 )

(4 )

(9 )

(6 )

U.S. Domestic and Outbound Fuel Surcharge:
U.S. Domestic and Outbound Fuel Surcharge:

Low
Low
High
High
Weighted-average
Weighted-average

International Export and Freight Fuel Surcharge:
International Export and Freight Fuel Surcharge:

Low
Low
High
High
Weighted-average
Weighted-average

International Domestic Fuel Surcharge:
International Domestic Fuel Surcharge:

Low
Low
High
High
Weighted-average
Weighted-average

FedEx Express Segment Operating Income
FedEx Express Segment Operating Income

2021
2021

2020
2020

2.7 %
2.7 %
8.0
8.0
4.9
4.9

0.3
0.3
22.0
22.0
12.8
12.8

2.6
2.6
20.4
20.4
6.4
6.4

0.5 %
0.5 %
8.6
8.6
6.3
6.3

—
—
19.3
19.3
14.0
14.0

3.2
3.2
24.5
24.5
7.3
7.3

FedEx Express segment operating income increased substantially in 2021 primarily due to international export and U.S. domestic
FedEx Express segment operating income increased substantially in 2021 primarily due to international export and U.S. domestic
package volume growth. FedEx Express segment operating results include a pre-tax benefit of approximately $165 million in 2021
package volume growth. FedEx Express segment operating results include a pre-tax benefit of approximately $165 million in 2021
from a reduction in aviation excise taxes provided by the CARES Act, which expired on December 31, 2020. These factors were
from a reduction in aviation excise taxes provided by the CARES Act, which expired on December 31, 2020. These factors were
partially offset by higher variable incentive compensation expense of approximately $800 million in 2021, which includes
partially offset by higher variable incentive compensation expense of approximately $800 million in 2021, which includes
approximately $125 million in special bonuses paid in January 2021 to our front-line operational team members. We experienced
approximately $125 million in special bonuses paid in January 2021 to our front-line operational team members. We experienced
constrained commercial air capacity leading to high usage of our aircraft fleet and increased costs of operating our global network in
constrained commercial air capacity leading to high usage of our aircraft fleet and increased costs of operating our global network in
2021 as result of the COVID-19 pandemic. Results in 2020 were negatively impacted by $66 million of asset impairment charges
2021 as result of the COVID-19 pandemic. Results in 2020 were negatively impacted by $66 million of asset impairment charges
associated with the decision to permanently retire certain aircraft and related engines.
associated with the decision to permanently retire certain aircraft and related engines.

FedEx Express segment results include approximately $176 million of TNT Express integration expenses in 2021, a decrease of $46
FedEx Express segment results include approximately $176 million of TNT Express integration expenses in 2021, a decrease of $46
million from 2020.
million from 2020.

Salaries and employee benefits expense increased 18% in 2021 primarily due to staffing to support volume growth and higher variable
Salaries and employee benefits expense increased 18% in 2021 primarily due to staffing to support volume growth and higher variable
incentive compensation expense. In addition, higher labor expense and increased costs associated with network contingencies as a
incentive compensation expense. In addition, higher labor expense and increased costs associated with network contingencies as a
result of the COVID-19 pandemic contributed to the increase in salaries and employee benefits expense in 2021. Purchased
result of the COVID-19 pandemic contributed to the increase in salaries and employee benefits expense in 2021. Purchased
transportation expense increased 19% in 2021 primarily due to the transfer of FedEx Custom Critical and FedEx Cross Border into the
transportation expense increased 19% in 2021 primarily due to the transfer of FedEx Custom Critical and FedEx Cross Border into the
FedEx Express segment, as well as higher utilization of third-party transportation providers. Other operating expense increased 16% in
FedEx Express segment, as well as higher utilization of third-party transportation providers. Other operating expense increased 16% in
2021 primarily due to bad debt expense and additional volume-related expenses. Maintenance and repairs expense increased 19% in
2021 primarily due to bad debt expense and additional volume-related expenses. Maintenance and repairs expense increased 19% in
2021 primarily due to additional flight hours as constrained commercial air capacity drove increased usage of owned assets.
2021 primarily due to additional flight hours as constrained commercial air capacity drove increased usage of owned assets.

Fuel expense decreased 8% in 2021 due to lower fuel prices, partially offset by higher aircraft and vehicle fuel usage. The net impact
Fuel expense decreased 8% in 2021 due to lower fuel prices, partially offset by higher aircraft and vehicle fuel usage. The net impact
of fuel had a slightly negative impact to operating income in 2021 as lower fuel surcharges outpaced decreased fuel prices. See the
of fuel had a slightly negative impact to operating income in 2021 as lower fuel surcharges outpaced decreased fuel prices. See the
“Results of Operations and Outlook – Consolidated Results – Fuel” section of this MD&A for a description and additional discussion
“Results of Operations and Outlook – Consolidated Results – Fuel” section of this MD&A for a description and additional discussion
of the net impact of fuel on our operating results.
of the net impact of fuel on our operating results.

(1)

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

FedEx Express segment revenue increased 18% in 2021 primarily due to international export and U.S. domestic package volume

FedEx Express Segment Outlook
FedEx Express Segment Outlook

growth, as well as pricing initiatives resulting from global air freight capacity constraints.

International export average daily volumes increased 23% in 2021 led by volume growth from Asia-Pacific and Europe. In addition,

industry-wide capacity constraints and actions to prioritize premium-yielding products drove a mix shift from international economy

to international priority services in 2021. International export package yield increased slightly in 2021 due to favorable exchange rates

and pricing initiatives resulting from global air freight capacity constraints, partially offset by base yield declines and lower fuel

surcharges. U.S. domestic package average daily volumes increased 17% in 2021 driven by growth in deferred service offerings,

reflecting increased e-commerce demand resulting from the COVID-19 pandemic, as well as growth in overnight box service

offerings. U.S. domestic package yield decreased 3% in 2021 due to lower package weights and lower fuel surcharges. Average daily

freight pounds increased 2% in 2021 primarily due to volume growth in international priority and U.S. services. Composite freight

yield increased 11% in 2021 primarily due to improved base yields. Other revenue increased 92% in 2021 due to the transfer of FedEx

Custom Critical and FedEx Cross Border into the FedEx Express segment.

We expect increased demand for our e-commerce services, international export volume growth and pricing initiatives to drive
We expect increased demand for our e-commerce services, international export volume growth and pricing initiatives to drive
improved revenue and operating income in 2022. As a result of business growth and service improvement initiatives, we anticipate
improved revenue and operating income in 2022. As a result of business growth and service improvement initiatives, we anticipate
increases in staffing costs, purchased transportation and other operating expenses in 2022. We also expect continued high usage of our
increases in staffing costs, purchased transportation and other operating expenses in 2022. We also expect continued high usage of our
aircraft fleet resulting from limited commercial availability on transoceanic lanes.
aircraft fleet resulting from limited commercial availability on transoceanic lanes.

We expect the FedEx Express segment to incur approximately $125 million of TNT Express integration expenses in 2022. See the
We expect the FedEx Express segment to incur approximately $125 million of TNT Express integration expenses in 2022. See the
“Outlook” section of this MD&A for additional information regarding the integration of TNT Express.
“Outlook” section of this MD&A for additional information regarding the integration of TNT Express.

Capital expenditures at FedEx Express are expected to increase in 2022 primarily related to facility investments and vehicle purchases,
Capital expenditures at FedEx Express are expected to increase in 2022 primarily related to facility investments and vehicle purchases,
partially offset by a decrease in aircraft-related payments. We continue to make multi-year investments in our facilities of
partially offset by a decrease in aircraft-related payments. We continue to make multi-year investments in our facilities of
approximately $1.5 billion to significantly expand the Indianapolis hub and approximately $1.5 billion to modernize the Memphis
approximately $1.5 billion to significantly expand the Indianapolis hub and approximately $1.5 billion to modernize the Memphis
World Hub.
World Hub.

- 56 -

- 57 -
- 57 -

89.5 % 91.1 %
89.5 % 91.1 %

49
49
31
31
18
18
7
7
40
40
27
27
18
18
30
30
32
32
59
59
160 bp
160 bp
23
23
9
9

19.9 17.9
19.9 17.9
46.3 47.5
46.3 47.5
4.3
3.8
4.3
3.8
3.5
2.8
3.5
2.8
0.1
0.1
0.1
0.1
1.7
1.6
1.7
1.6
6.9
6.1
6.9
6.1
9.2
8.9
9.2
8.9

2021
2021

2020
2020

Percent
Percent
Change
Change

$
$

30,496 $
30,496 $

22,733
22,733

34
34

Percent of Revenue
Percent of Revenue
2021
2021
100.0 % 100.0 %
100.0 % 100.0 %

2020
2020

FEDEX GROUND SEGMENT
FEDEX GROUND SEGMENT

FedEx Ground Segment Outlook

FedEx Ground service offerings include day-certain delivery to businesses in the U.S. and Canada and to 100% of U.S. residences.
FedEx Ground service offerings include day-certain delivery to businesses in the U.S. and Canada and to 100% of U.S. residences.
The following table compares revenue, operating expenses, operating income (dollars in millions), operating margin, selected package
The following table compares revenue, operating expenses, operating income (dollars in millions), operating margin, selected package
statistics (in thousands, except yield amounts) and operating expenses as a percent of revenue for the years ended May 31:
statistics (in thousands, except yield amounts) and operating expenses as a percent of revenue for the years ended May 31:

6,060
6,060
14,126
14,126
1,166
1,166
843
843
21
21
496
496
1,862
1,862
2,729
2,729
27,303
27,303
3,193 $
3,193 $
10.5 %
10.5 %
12,272
12,272
9.70 $
9.70 $

4,060
4,060
10,799
10,799
989
989
789
789
15
15
392
392
1,581
1,581
2,094
2,094
20,719
20,719
2,014
2,014
8.9 %
8.9 %
9,997
9,997
8.93
8.93

$
$

Revenue
Revenue
Operating expenses:
Operating expenses:

Salaries and employee benefits
Salaries and employee benefits
Purchased transportation
Purchased transportation
Rentals
Rentals
Depreciation and amortization
Depreciation and amortization
Fuel
Fuel
Maintenance and repairs
Maintenance and repairs
Intercompany charges
Intercompany charges
Other
Other

Total operating expenses
Total operating expenses

Operating income
Operating income
Operating margin
Operating margin
Average daily package volume
Average daily package volume
Revenue per package (yield)
Revenue per package (yield)

FedEx Ground Segment Revenue
FedEx Ground Segment Revenue

We anticipate increased demand for residential and commercial services to continue at FedEx Ground in 2022. We will continue to

focus on pricing initiatives to align with market demand, network capacity dynamics and labor market challenges in 2022.

FedEx Ground is making strategic technology investments to optimize last-mile deliveries via route optimization, expand capabilities

to better handle large items and improve scheduling at its hubs and stations, leading to anticipated productivity improvements.

Strategic investments for safety technology will remain a critical focus in 2022 throughout the FedEx Ground network. We believe

these initiatives will allow for the more efficient use of our existing assets, which will drive improved performance and enhance our

competitive position over the long term.

Capital expenditures at FedEx Ground are expected to increase in 2022 primarily for new and expanded facilities, as well as trailer

purchases to support increased demand for our services.

FEDEX FREIGHT SEGMENT

FedEx Freight LTL service offerings include priority services when speed is critical and economy services when time can be traded

for savings. Prior year statistical information has been revised to conform to the current year presentation. The following table

compares revenue, operating expenses, operating income (dollars in millions), operating margin, selected statistics and operating

expenses as a percent of revenue for the years ended May 31:

2021

2020

Percent

Change

Percent of Revenue

2021

2020

7,833 $

7,102

100.0 % 100.0 %

Revenue

Operating expenses:

Salaries and employee benefits

Purchased transportation

Depreciation and amortization

Rentals

Fuel

Other

Maintenance and repairs

Intercompany charges

Total operating expenses

Operating income

Operating margin

Average daily shipments (in thousands):

Total average daily shipments

Weight per shipment:

Priority

Economy

Priority

Economy

Priority

Economy

Priority

Economy

Composite revenue per shipment

Revenue per hundredweight:

Composite revenue per hundredweight

FedEx Freight Segment Revenue

shipments.

46.8

10.6

48.5

2.9

5.3

5.1

2.9

6.5

7.1

9.8

2.9

5.4

6.7

3.5

7.3

7.7

87.2 % 91.8 %

8.2 %

460 bp

3,666

3,449

827

229

417

398

227

505

559

6,828

1,005 $

12.8 %

76.2

32.2

108.4

1,104

987

1,069

695

208

381

476

247

516

550

6,522

580

72.5

30.5

103.0

1,146

986

1,098

269.98 $

313.67

282.95 $

260.39

301.55

272.56

24.45 $

31.80

26.46 $

22.73

30.59

24.82

(16 )

(8 )

(2 )

(4 )

—

(3 )

FedEx Ground segment revenue increased 34% in 2021 due to residential delivery volume growth reflecting increased e-commerce
FedEx Ground segment revenue increased 34% in 2021 due to residential delivery volume growth reflecting increased e-commerce
demand accelerated by the COVID-19 pandemic. Additionally, improved yields related to pricing initiatives positively impacted
demand accelerated by the COVID-19 pandemic. Additionally, improved yields related to pricing initiatives positively impacted
revenue in 2021.
revenue in 2021.

Average daily volume increased 23% in 2021 primarily due to continued growth in residential services driven by e-commerce, as well
Average daily volume increased 23% in 2021 primarily due to continued growth in residential services driven by e-commerce, as well
as growth in commercial services. FedEx Ground yields increased 9% in 2021 primarily due to pricing initiatives.
as growth in commercial services. FedEx Ground yields increased 9% in 2021 primarily due to pricing initiatives.

The FedEx Ground fuel surcharge is based on a rounded average of the national U.S. on-highway average price for a gallon of diesel
The FedEx Ground fuel surcharge is based on a rounded average of the national U.S. on-highway average price for a gallon of diesel
fuel, as published by the Department of Energy. The fuel surcharge ranged as follows for the years ended May 31:
fuel, as published by the Department of Energy. The fuel surcharge ranged as follows for the years ended May 31:

Low
Low
High
High
Weighted-average
Weighted-average

FedEx Ground Segment Operating Income
FedEx Ground Segment Operating Income

2021
2021

2020
2020

5.5 %
5.5 %
8.0
8.0
6.4
6.4

5.8 %
5.8 %
7.3
7.3
6.7
6.7

FedEx Ground segment operating income increased 59% in 2021 primarily due to residential delivery volume growth and yield
FedEx Ground segment operating income increased 59% in 2021 primarily due to residential delivery volume growth and yield
improvement. These factors were partially offset by higher purchased transportation service provider settlements related to residential
improvement. These factors were partially offset by higher purchased transportation service provider settlements related to residential
service mix, increased labor expenses and higher self-insurance accruals in 2021.
service mix, increased labor expenses and higher self-insurance accruals in 2021.

Composite weight per shipment

Revenue per shipment:

Purchased transportation expense increased 31% in 2021 due to higher volumes and increased residential service mix. Salaries and
Purchased transportation expense increased 31% in 2021 due to higher volumes and increased residential service mix. Salaries and
employee benefits expense increased 49% in 2021 due to additional staffing to support volume growth, including costs associated with
employee benefits expense increased 49% in 2021 due to additional staffing to support volume growth, including costs associated with
operating our seven-day-per-week U.S. network, merit increases and higher variable incentive compensation expense of
operating our seven-day-per-week U.S. network, merit increases and higher variable incentive compensation expense of
approximately $215 million. Other operating expense increased 30% in 2021 primarily due to higher self-insurance accruals and
approximately $215 million. Other operating expense increased 30% in 2021 primarily due to higher self-insurance accruals and
additional volume-related expenses.
additional volume-related expenses.

The net impact of fuel had a moderate benefit to operating income in 2021 as decreased fuel prices outpaced lower fuel surcharges.
The net impact of fuel had a moderate benefit to operating income in 2021 as decreased fuel prices outpaced lower fuel surcharges.
See the “Results of Operations and Outlook – Consolidated Results – Fuel” section of this MD&A for a description and additional
See the “Results of Operations and Outlook – Consolidated Results – Fuel” section of this MD&A for a description and additional
discussion of the net impact of fuel on our operating results.
discussion of the net impact of fuel on our operating results.

- 58 -
- 58 -

- 59 -

FedEx Freight segment revenue increased 10% in 2021 primarily due to higher revenue per shipment and increased average daily

FedEx Ground service offerings include day-certain delivery to businesses in the U.S. and Canada and to 100% of U.S. residences.

The following table compares revenue, operating expenses, operating income (dollars in millions), operating margin, selected package

statistics (in thousands, except yield amounts) and operating expenses as a percent of revenue for the years ended May 31:

Revenue

Operating expenses:

Salaries and employee benefits

Purchased transportation

Depreciation and amortization

Rentals

Fuel

Other

Maintenance and repairs

Intercompany charges

Total operating expenses

Operating income

Operating margin

Average daily package volume

Revenue per package (yield)

FedEx Ground Segment Revenue

2021

2020

Percent

Change

30,496 $

22,733

100.0 % 100.0 %

6,060

14,126

1,166

843

496

1,862

2,729

27,303

10.5 %

12,272

3,193 $

9.70 $

4,060

10,799

989

789

392

1,581

2,094

20,719

2,014

8.9 %

9,997

8.93

Percent of Revenue

2021

2020

19.9 17.9

46.3 47.5

3.8

2.8

0.1

1.6

6.1

8.9

4.3

3.5

0.1

1.7

6.9

9.2

89.5 % 91.1 %

160 bp

FedEx Ground segment revenue increased 34% in 2021 due to residential delivery volume growth reflecting increased e-commerce

demand accelerated by the COVID-19 pandemic. Additionally, improved yields related to pricing initiatives positively impacted

revenue in 2021.

Average daily volume increased 23% in 2021 primarily due to continued growth in residential services driven by e-commerce, as well

as growth in commercial services. FedEx Ground yields increased 9% in 2021 primarily due to pricing initiatives.

The FedEx Ground fuel surcharge is based on a rounded average of the national U.S. on-highway average price for a gallon of diesel

fuel, as published by the Department of Energy. The fuel surcharge ranged as follows for the years ended May 31:

Low

High

Weighted-average

FedEx Ground Segment Operating Income

2021

2020

5.5 %

8.0

6.4

5.8 %

7.3

6.7

FedEx Ground segment operating income increased 59% in 2021 primarily due to residential delivery volume growth and yield

improvement. These factors were partially offset by higher purchased transportation service provider settlements related to residential

service mix, increased labor expenses and higher self-insurance accruals in 2021.

Purchased transportation expense increased 31% in 2021 due to higher volumes and increased residential service mix. Salaries and

employee benefits expense increased 49% in 2021 due to additional staffing to support volume growth, including costs associated with

operating our seven-day-per-week U.S. network, merit increases and higher variable incentive compensation expense of

approximately $215 million. Other operating expense increased 30% in 2021 primarily due to higher self-insurance accruals and

additional volume-related expenses.

The net impact of fuel had a moderate benefit to operating income in 2021 as decreased fuel prices outpaced lower fuel surcharges.

See the “Results of Operations and Outlook – Consolidated Results – Fuel” section of this MD&A for a description and additional

discussion of the net impact of fuel on our operating results.

FEDEX GROUND SEGMENT

FedEx Ground Segment Outlook
FedEx Ground Segment Outlook

We anticipate increased demand for residential and commercial services to continue at FedEx Ground in 2022. We will continue to
We anticipate increased demand for residential and commercial services to continue at FedEx Ground in 2022. We will continue to
focus on pricing initiatives to align with market demand, network capacity dynamics and labor market challenges in 2022.
focus on pricing initiatives to align with market demand, network capacity dynamics and labor market challenges in 2022.

FedEx Ground is making strategic technology investments to optimize last-mile deliveries via route optimization, expand capabilities
FedEx Ground is making strategic technology investments to optimize last-mile deliveries via route optimization, expand capabilities
to better handle large items and improve scheduling at its hubs and stations, leading to anticipated productivity improvements.
to better handle large items and improve scheduling at its hubs and stations, leading to anticipated productivity improvements.
Strategic investments for safety technology will remain a critical focus in 2022 throughout the FedEx Ground network. We believe
Strategic investments for safety technology will remain a critical focus in 2022 throughout the FedEx Ground network. We believe
these initiatives will allow for the more efficient use of our existing assets, which will drive improved performance and enhance our
these initiatives will allow for the more efficient use of our existing assets, which will drive improved performance and enhance our
competitive position over the long term.
competitive position over the long term.

Capital expenditures at FedEx Ground are expected to increase in 2022 primarily for new and expanded facilities, as well as trailer
Capital expenditures at FedEx Ground are expected to increase in 2022 primarily for new and expanded facilities, as well as trailer
purchases to support increased demand for our services.
purchases to support increased demand for our services.

FEDEX FREIGHT SEGMENT
FEDEX FREIGHT SEGMENT

FedEx Freight LTL service offerings include priority services when speed is critical and economy services when time can be traded
FedEx Freight LTL service offerings include priority services when speed is critical and economy services when time can be traded
for savings. Prior year statistical information has been revised to conform to the current year presentation. The following table
for savings. Prior year statistical information has been revised to conform to the current year presentation. The following table
compares revenue, operating expenses, operating income (dollars in millions), operating margin, selected statistics and operating
compares revenue, operating expenses, operating income (dollars in millions), operating margin, selected statistics and operating
expenses as a percent of revenue for the years ended May 31:
expenses as a percent of revenue for the years ended May 31:

Revenue
Revenue
Operating expenses:
Operating expenses:

Total operating expenses
Total operating expenses

Operating income
Operating income
Operating margin
Operating margin
Average daily shipments (in thousands):
Average daily shipments (in thousands):

Priority
Priority
Economy
Economy

Total average daily shipments
Total average daily shipments

Weight per shipment:
Weight per shipment:

Priority
Priority
Economy
Economy

Composite weight per shipment
Composite weight per shipment

Revenue per shipment:
Revenue per shipment:

Priority
Priority
Economy
Economy

Composite revenue per shipment
Composite revenue per shipment

Revenue per hundredweight:
Revenue per hundredweight:

Priority
Priority
Economy
Economy

Composite revenue per hundredweight
Composite revenue per hundredweight

FedEx Freight Segment Revenue
FedEx Freight Segment Revenue

2021
2021

2020
2020

Percent
Percent
Change
Change

$
$

7,833 $
7,833 $

7,102
7,102

10
10

Percent of Revenue
Percent of Revenue
2020
2020

2021
2021
100.0 % 100.0 %
100.0 % 100.0 %

$
$

3,666
3,666
827
827
229
229
417
417
398
398
227
227
505
505
559
559
6,828
6,828
1,005 $
1,005 $
12.8 %
12.8 %

76.2
76.2
32.2
32.2
108.4
108.4

1,104
1,104
987
987
1,069
1,069

3,449
3,449
695
695
208
208
381
381
476
476
247
247
516
516
550
550
6,522
6,522
580
580
8.2 %
8.2 %

72.5
72.5
30.5
30.5
103.0
103.0

1,146
1,146
986
986
1,098
1,098

$
$

269.98 $
269.98 $
313.67
313.67
282.95 $
282.95 $

260.39
260.39
301.55
301.55
272.56
272.56

24.45 $
24.45 $
31.80
31.80
26.46 $
26.46 $

22.73
22.73
30.59
30.59
24.82
24.82

48.5
48.5
9.8
9.8
2.9
2.9
5.4
5.4
6.7
6.7
3.5
3.5
7.3
7.3
7.7
7.7

46.8
46.8
10.6
10.6
2.9
2.9
5.3
5.3
5.1
5.1
2.9
2.9
6.5
6.5
7.1
7.1

6
6
19
19
10
10
9
9
(16 )
(16 )
(8 )
(8 )
(2 )
(2 )
2
2
5
5
73
73
460 bp
460 bp

87.2 % 91.8 %
87.2 % 91.8 %

5
5
6
6
5
5

(4 )
(4 )
—
—
(3 )
(3 )

4
4
4
4
4
4

8
8
4
4
7
7

- 58 -

- 59 -
- 59 -

FedEx Freight segment revenue increased 10% in 2021 primarily due to higher revenue per shipment and increased average daily
FedEx Freight segment revenue increased 10% in 2021 primarily due to higher revenue per shipment and increased average daily
shipments.
shipments.

Revenue per shipment increased 4% in 2021 primarily due to higher base rates reflecting our ongoing revenue quality initiatives,
Revenue per shipment increased 4% in 2021 primarily due to higher base rates reflecting our ongoing revenue quality initiatives,
partially offset by lower weight per shipment and lower fuel surcharge rates. Average daily shipments increased 5% in 2021 due to
partially offset by lower weight per shipment and lower fuel surcharge rates. Average daily shipments increased 5% in 2021 due to
volumes returning to pre-COVID-19 levels and higher demand for our service offerings.
volumes returning to pre-COVID-19 levels and higher demand for our service offerings.

FINANCIAL CONDITION

LIQUIDITY

The weekly indexed fuel surcharge is based on the average of the U.S. on-highway prices for a gallon of diesel fuel, as published by
The weekly indexed fuel surcharge is based on the average of the U.S. on-highway prices for a gallon of diesel fuel, as published by
the Department of Energy. The indexed FedEx Freight fuel surcharge ranged as follows for the years ended May 31:
the Department of Energy. The indexed FedEx Freight fuel surcharge ranged as follows for the years ended May 31:

Cash and cash equivalents totaled $7.1 billion at May 31, 2021, compared to $4.9 billion at May 31, 2020. The following table

provides a summary of our cash flows for the years ended May 31 (in millions):

Low
Low
High
High
Weighted-average
Weighted-average

FedEx Freight Segment Operating Income
FedEx Freight Segment Operating Income

2021
2021

2020
2020

21.0 %
21.0 %
25.4
25.4
22.5
22.5

21.0 %
21.0 %
24.4
24.4
23.4
23.4

FedEx Freight segment operating income increased 73% in 2021 driven by continued focus on revenue quality initiatives, managing
FedEx Freight segment operating income increased 73% in 2021 driven by continued focus on revenue quality initiatives, managing
our costs and improving operational efficiencies.
our costs and improving operational efficiencies.

Salaries and employee benefits increased 6% in 2021 primarily due to higher variable incentive compensation expense of
Salaries and employee benefits increased 6% in 2021 primarily due to higher variable incentive compensation expense of
approximately $115 million, higher volumes and merit increases. Purchased transportation increased 19% in 2021 primarily due to
approximately $115 million, higher volumes and merit increases. Purchased transportation increased 19% in 2021 primarily due to
higher utilization of third-party transportation and rail providers.
higher utilization of third-party transportation and rail providers.

Fuel expense decreased 16% in 2021 primarily due to lower fuel prices. The net impact of fuel had a slightly negative impact to
Fuel expense decreased 16% in 2021 primarily due to lower fuel prices. The net impact of fuel had a slightly negative impact to
operating income in 2021 as lower fuel surcharges outpaced decreased fuel prices. See the “Results of Operations and Outlook –
operating income in 2021 as lower fuel surcharges outpaced decreased fuel prices. See the “Results of Operations and Outlook –
Consolidated Results – Fuel” section of this MD&A for a description and additional discussion of the net impact of fuel on our
Consolidated Results – Fuel” section of this MD&A for a description and additional discussion of the net impact of fuel on our
operating results.
operating results.

FedEx Freight Segment Outlook
FedEx Freight Segment Outlook

We expect higher revenue and operating results at FedEx Freight during 2022, and we will continue to remain focused on safety,
We expect higher revenue and operating results at FedEx Freight during 2022, and we will continue to remain focused on safety,
profitable market share growth and cost management. We will also remain committed to our revenue quality initiatives and will utilize
profitable market share growth and cost management. We will also remain committed to our revenue quality initiatives and will utilize
technology and engineering to improve operational productivities and efficiencies throughout our network. We will continue to invest
technology and engineering to improve operational productivities and efficiencies throughout our network. We will continue to invest
in new service offerings and deliver improved customer experiences, including growing our FedEx Freight Direct employee-based and
in new service offerings and deliver improved customer experiences, including growing our FedEx Freight Direct employee-based and
company-branded basic, standard and premium service offerings. FedEx Freight will continue its collaboration with FedEx Ground
company-branded basic, standard and premium service offerings. FedEx Freight will continue its collaboration with FedEx Ground
and FedEx Express during 2022 by providing road and intermodal support.
and FedEx Express during 2022 by providing road and intermodal support.

Capital expenditures at FedEx Freight are expected to increase in 2022 due to fleet modernization and strategic initiatives to improve
Capital expenditures at FedEx Freight are expected to increase in 2022 due to fleet modernization and strategic initiatives to improve
the safety and security of our employees.
the safety and security of our employees.

Operating activities:

Net income

Retirement plans mark-to-market adjustments

Loss on extinguishment of debt

Business realignment costs

Goodwill and other asset impairment charges

Other noncash charges and credits

Changes in assets and liabilities

Cash provided by operating activities

Investing activities:

Capital expenditures

Business acquisitions, net of cash acquired

Proceeds from asset dispositions and other

Cash used in investing activities

Financing activities:

Payments on debt

Proceeds from debt issuances

Proceeds from stock issuances

Dividends paid

Purchase of treasury stock

Other

Cash (used in) provided by financing activities

Effect of exchange rate changes on cash

Net increase in cash and cash equivalents

Cash and cash equivalents at end of period

2021

2020

5,231

(1,176 )

393

102

—

7,457

(1,872 )

10,135

(5,884 )

(228 )

102

(6,010 )

(6,318 )

4,212

740

(686 )

—

(38 )

(2,090 )

171

2,206 $

7,087 $

1,286

794

—

435

6,674

(4,092 )

5,097

(5,868 )

—

(5,846 )

(2,548 )

6,556

(679 )

(3 )

(9 )

3,381

(70 )

2,562

4,881

Cash Provided by Operating Activities. Cash flows from operating activities increased $5.0 billion in 2021 primarily due to higher net

income, the timing of variable incentive compensation payments and lower pension contributions.

Cash Used in Investing Activities. Capital expenditures increased slightly in 2021 primarily due to higher aircraft spending at FedEx

Express, partially offset by lower vehicle spending across all of our transportation segments. See “Capital Resources” below for a

more detailed discussion of capital expenditures during 2021.

Financing Activities. We issued $3.25 billion of senior unsecured debt under our shelf registration statement during 2021 and used the

net proceeds to redeem $5.8 billion of outstanding debt and pay associated redemption premiums of $393 million, eliminating all debt

maturities through 2025 and one maturity in 2027. See Note 7 of the accompanying consolidated financial statements for additional

information on the terms of the senior unsecured debt, including the Sustainability Notes, as well as the debt maturities redeemed.

Additionally, during 2021 FedEx Express issued $970 million of Pass-Through Certificates, Series 2020-1AA (the “Certificates”) with

a fixed interest rate of 1.875% due in February 2034 utilizing pass-through trusts. The Certificates are secured by 19 Boeing aircraft.

The payment obligations of FedEx Express in respect of the Certificates are fully and unconditionally guaranteed by FedEx. FedEx

Express is using the proceeds from the issuance for general corporate purposes. See Note 7 of the accompanying consolidated

financial statements for additional information regarding the terms of the Certificates.

During 2020, we issued $5.1 billion of senior unsecured debt under our shelf registration statement and used the net proceeds to make

voluntary contributions to our U.S. Pension Plans, to redeem the $400 million aggregate principal amount of 2.30% notes due 2020

and the €500 million aggregate principal amount of 0.50% notes due 2020, to repay $1.5 billion of borrowings under our 364-Day

Credit Agreement that we drew in March 2020 and $136 million of commercial paper outstanding under our commercial paper

program and for general corporate purposes.

- 60 -
- 60 -

- 61 -

Revenue per shipment increased 4% in 2021 primarily due to higher base rates reflecting our ongoing revenue quality initiatives,

partially offset by lower weight per shipment and lower fuel surcharge rates. Average daily shipments increased 5% in 2021 due to

volumes returning to pre-COVID-19 levels and higher demand for our service offerings.

FINANCIAL CONDITION
FINANCIAL CONDITION

LIQUIDITY
LIQUIDITY

The weekly indexed fuel surcharge is based on the average of the U.S. on-highway prices for a gallon of diesel fuel, as published by

the Department of Energy. The indexed FedEx Freight fuel surcharge ranged as follows for the years ended May 31:

Cash and cash equivalents totaled $7.1 billion at May 31, 2021, compared to $4.9 billion at May 31, 2020. The following table
Cash and cash equivalents totaled $7.1 billion at May 31, 2021, compared to $4.9 billion at May 31, 2020. The following table
provides a summary of our cash flows for the years ended May 31 (in millions):
provides a summary of our cash flows for the years ended May 31 (in millions):

Low

High

Weighted-average

FedEx Freight Segment Operating Income

2021

2020

21.0 %

25.4

22.5

21.0 %

24.4

23.4

FedEx Freight segment operating income increased 73% in 2021 driven by continued focus on revenue quality initiatives, managing

our costs and improving operational efficiencies.

Salaries and employee benefits increased 6% in 2021 primarily due to higher variable incentive compensation expense of

approximately $115 million, higher volumes and merit increases. Purchased transportation increased 19% in 2021 primarily due to

higher utilization of third-party transportation and rail providers.

Fuel expense decreased 16% in 2021 primarily due to lower fuel prices. The net impact of fuel had a slightly negative impact to

operating income in 2021 as lower fuel surcharges outpaced decreased fuel prices. See the “Results of Operations and Outlook –

Consolidated Results – Fuel” section of this MD&A for a description and additional discussion of the net impact of fuel on our

operating results.

FedEx Freight Segment Outlook

We expect higher revenue and operating results at FedEx Freight during 2022, and we will continue to remain focused on safety,

profitable market share growth and cost management. We will also remain committed to our revenue quality initiatives and will utilize

technology and engineering to improve operational productivities and efficiencies throughout our network. We will continue to invest

in new service offerings and deliver improved customer experiences, including growing our FedEx Freight Direct employee-based and

company-branded basic, standard and premium service offerings. FedEx Freight will continue its collaboration with FedEx Ground

and FedEx Express during 2022 by providing road and intermodal support.

Capital expenditures at FedEx Freight are expected to increase in 2022 due to fleet modernization and strategic initiatives to improve

the safety and security of our employees.

Operating activities:
Operating activities:
Net income
Net income
Retirement plans mark-to-market adjustments
Retirement plans mark-to-market adjustments
Loss on extinguishment of debt
Loss on extinguishment of debt
Business realignment costs
Business realignment costs
Goodwill and other asset impairment charges
Goodwill and other asset impairment charges
Other noncash charges and credits
Other noncash charges and credits
Changes in assets and liabilities
Changes in assets and liabilities

Cash provided by operating activities
Cash provided by operating activities

Investing activities:
Investing activities:

Capital expenditures
Capital expenditures
Business acquisitions, net of cash acquired
Business acquisitions, net of cash acquired
Proceeds from asset dispositions and other
Proceeds from asset dispositions and other

Cash used in investing activities
Cash used in investing activities

Financing activities:
Financing activities:
Payments on debt
Payments on debt
Proceeds from debt issuances
Proceeds from debt issuances
Proceeds from stock issuances
Proceeds from stock issuances
Dividends paid
Dividends paid
Purchase of treasury stock
Purchase of treasury stock
Other
Other

Cash (used in) provided by financing activities
Cash (used in) provided by financing activities

Effect of exchange rate changes on cash
Effect of exchange rate changes on cash
Net increase in cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at end of period
Cash and cash equivalents at end of period

2021
2021

2020
2020

$
$

$
$
$
$

5,231
$
$
5,231
(1,176 )
(1,176 )
393
393
102
102
—
—
7,457
7,457
(1,872 )
(1,872 )
10,135
10,135

(5,884 )
(5,884 )
(228 )
(228 )
102
102
(6,010 )
(6,010 )

(6,318 )
(6,318 )
4,212
4,212
740
740
(686 )
(686 )
—
—
(38 )
(38 )
(2,090 )
(2,090 )
171
171
2,206 $
2,206 $
7,087 $
7,087 $

1,286
1,286
794
794
—
—
—
—
435
435
6,674
6,674
(4,092 )
(4,092 )
5,097
5,097

(5,868 )
(5,868 )
—
—
22
22
(5,846 )
(5,846 )

(2,548 )
(2,548 )
6,556
6,556
64
64
(679 )
(679 )
(3 )
(3 )
(9 )
(9 )
3,381
3,381
(70 )
(70 )
2,562
2,562
4,881
4,881

Cash Provided by Operating Activities. Cash flows from operating activities increased $5.0 billion in 2021 primarily due to higher net
Cash Provided by Operating Activities. Cash flows from operating activities increased $5.0 billion in 2021 primarily due to higher net
income, the timing of variable incentive compensation payments and lower pension contributions.
income, the timing of variable incentive compensation payments and lower pension contributions.

Cash Used in Investing Activities. Capital expenditures increased slightly in 2021 primarily due to higher aircraft spending at FedEx
Cash Used in Investing Activities. Capital expenditures increased slightly in 2021 primarily due to higher aircraft spending at FedEx
Express, partially offset by lower vehicle spending across all of our transportation segments. See “Capital Resources” below for a
Express, partially offset by lower vehicle spending across all of our transportation segments. See “Capital Resources” below for a
more detailed discussion of capital expenditures during 2021.
more detailed discussion of capital expenditures during 2021.

Financing Activities. We issued $3.25 billion of senior unsecured debt under our shelf registration statement during 2021 and used the
Financing Activities. We issued $3.25 billion of senior unsecured debt under our shelf registration statement during 2021 and used the
net proceeds to redeem $5.8 billion of outstanding debt and pay associated redemption premiums of $393 million, eliminating all debt
net proceeds to redeem $5.8 billion of outstanding debt and pay associated redemption premiums of $393 million, eliminating all debt
maturities through 2025 and one maturity in 2027. See Note 7 of the accompanying consolidated financial statements for additional
maturities through 2025 and one maturity in 2027. See Note 7 of the accompanying consolidated financial statements for additional
information on the terms of the senior unsecured debt, including the Sustainability Notes, as well as the debt maturities redeemed.
information on the terms of the senior unsecured debt, including the Sustainability Notes, as well as the debt maturities redeemed.

Additionally, during 2021 FedEx Express issued $970 million of Pass-Through Certificates, Series 2020-1AA (the “Certificates”) with
Additionally, during 2021 FedEx Express issued $970 million of Pass-Through Certificates, Series 2020-1AA (the “Certificates”) with
a fixed interest rate of 1.875% due in February 2034 utilizing pass-through trusts. The Certificates are secured by 19 Boeing aircraft.
a fixed interest rate of 1.875% due in February 2034 utilizing pass-through trusts. The Certificates are secured by 19 Boeing aircraft.
The payment obligations of FedEx Express in respect of the Certificates are fully and unconditionally guaranteed by FedEx. FedEx
The payment obligations of FedEx Express in respect of the Certificates are fully and unconditionally guaranteed by FedEx. FedEx
Express is using the proceeds from the issuance for general corporate purposes. See Note 7 of the accompanying consolidated
Express is using the proceeds from the issuance for general corporate purposes. See Note 7 of the accompanying consolidated
financial statements for additional information regarding the terms of the Certificates.
financial statements for additional information regarding the terms of the Certificates.

During 2020, we issued $5.1 billion of senior unsecured debt under our shelf registration statement and used the net proceeds to make
During 2020, we issued $5.1 billion of senior unsecured debt under our shelf registration statement and used the net proceeds to make
voluntary contributions to our U.S. Pension Plans, to redeem the $400 million aggregate principal amount of 2.30% notes due 2020
voluntary contributions to our U.S. Pension Plans, to redeem the $400 million aggregate principal amount of 2.30% notes due 2020
and the €500 million aggregate principal amount of 0.50% notes due 2020, to repay $1.5 billion of borrowings under our 364-Day
and the €500 million aggregate principal amount of 0.50% notes due 2020, to repay $1.5 billion of borrowings under our 364-Day
Credit Agreement that we drew in March 2020 and $136 million of commercial paper outstanding under our commercial paper
Credit Agreement that we drew in March 2020 and $136 million of commercial paper outstanding under our commercial paper
program and for general corporate purposes.
program and for general corporate purposes.

- 60 -

- 61 -
- 61 -

The following table provides a summary of repurchases of our common stock for the periods ended May 31 (dollars in millions,
The following table provides a summary of repurchases of our common stock for the periods ended May 31 (dollars in millions,
except per share amounts):
except per share amounts):

GUARANTOR FINANCIAL INFORMATION

Common stock repurchases
Common stock repurchases

2021
2021

2020
2020

Total
Total
Number of
Number of
Shares
Shares

Purchased
Purchased

Average
Average
Price Paid
Price Paid
per Share
per Share

Total
Total
Purchase
Purchase
Price
Price

Total
Total
Number of
Number of
Shares
Shares

Purchased
Purchased

Average
Average
Price Paid
Price Paid
per Share
per Share

Total
Total
Purchase
Purchase
Price
Price

— $
— $

— 20,000 $ 156.90 $
— 20,000 $ 156.90 $

3
3

In January 2016, our Board of Directors authorized a stock repurchase program of up to 25 million shares. Shares under the current
In January 2016, our Board of Directors authorized a stock repurchase program of up to 25 million shares. Shares under the current
repurchase program may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and
repurchase program may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and
volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx
volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx
common stock and general market conditions. No time limit was set for the completion of the program, and the program may be
common stock and general market conditions. No time limit was set for the completion of the program, and the program may be
suspended or discontinued at any time. As of May 31, 2021, 5.1 million shares remained under the current stock repurchase
suspended or discontinued at any time. As of May 31, 2021, 5.1 million shares remained under the current stock repurchase
authorization.
authorization.

Effective March 16, 2021, we further amended our amended and restated $2.0 billion five-year credit agreement (the “Five-Year
Effective March 16, 2021, we further amended our amended and restated $2.0 billion five-year credit agreement (the “Five-Year
Credit Agreement”) and entered into a new $1.5 billion 364-day credit agreement (the “364-Day Credit Agreement” and together with
Credit Agreement”) and entered into a new $1.5 billion 364-day credit agreement (the “364-Day Credit Agreement” and together with
the Five-Year Credit Agreement, the “Credit Agreements”). The Credit Agreements no longer contain the temporary covenant added
the Five-Year Credit Agreement, the “Credit Agreements”). The Credit Agreements no longer contain the temporary covenant added
in the fourth quarter of 2020 restricting us from repurchasing any shares of our common stock or from increasing the amount of our
in the fourth quarter of 2020 restricting us from repurchasing any shares of our common stock or from increasing the amount of our
quarterly dividend payable per share of common stock from $0.65 per share. Prior to the amendment of the Five-Year Credit
quarterly dividend payable per share of common stock from $0.65 per share. Prior to the amendment of the Five-Year Credit
Agreement and entry into the current 364-Day Credit Agreement on March 16, 2021, our credit agreements contained a financial
Agreement and entry into the current 364-Day Credit Agreement on March 16, 2021, our credit agreements contained a financial
covenant requiring us to maintain a ratio of debt to consolidated earnings (excluding noncash retirement plans MTM adjustments,
covenant requiring us to maintain a ratio of debt to consolidated earnings (excluding noncash retirement plans MTM adjustments,
noncash pension service costs and noncash asset impairment charges) before interest, taxes, depreciation and amortization (“adjusted
noncash pension service costs and noncash asset impairment charges) before interest, taxes, depreciation and amortization (“adjusted
EBITDA”) of not more than 3.75 to 1.0, calculated as of May 31, 2021 on a rolling four-quarter basis. Effective March 16, 2021, we
EBITDA”) of not more than 3.75 to 1.0, calculated as of May 31, 2021 on a rolling four-quarter basis. Effective March 16, 2021, we
are required to maintain a ratio of debt to adjusted EBITDA of not more than 3.5 to 1.0, calculated as of the end of the applicable
are required to maintain a ratio of debt to adjusted EBITDA of not more than 3.5 to 1.0, calculated as of the end of the applicable
quarter on a rolling four-quarter basis. See Note 7 of the accompanying consolidated financial statements for additional information
quarter on a rolling four-quarter basis. See Note 7 of the accompanying consolidated financial statements for additional information
regarding the Credit Agreements.
regarding the Credit Agreements.

CAPITAL RESOURCES
CAPITAL RESOURCES

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

The following table compares capital expenditures by asset category and reportable segment for the years ended May 31 (in millions):
The following table compares capital expenditures by asset category and reportable segment for the years ended May 31 (in millions):

Aircraft and related equipment
Aircraft and related equipment
Package handling and ground support equipment
Package handling and ground support equipment
Vehicles and trailers
Vehicles and trailers
Information technology
Information technology
Facilities and other
Facilities and other

Total capital expenditures
Total capital expenditures

FedEx Express segment
FedEx Express segment
FedEx Ground segment
FedEx Ground segment
FedEx Freight segment
FedEx Freight segment
FedEx Services segment
FedEx Services segment
Other
Other

Total capital expenditures
Total capital expenditures

$
$

2,451 $
2,451 $
1,352
1,352
351
351
816
816
914
914
5,884 $
5,884 $

3,503 $
3,503 $
1,446
1,446
320
320
512
512
103
103
5,884 $
5,884 $

2021
2021

2020
2020

Percent Change
Percent Change
51
51
49
49
(67 )
(67 )
(11 )
(11 )
(33 )
(33 )
—
—

1,628
1,628
910
910
1,056
1,056
915
915
1,359
1,359
5,868
5,868

3,560
3,560
1,083
1,083
539
539
527
527
159
159
5,868
5,868

(2 )
(2 )
34
34
(41 )
(41 )
(3 )
(3 )
(35 )
(35 )
—
—

Current Assets

Intercompany Receivable

Total Assets

Current Liabilities

Intercompany Payable

Total Liabilities

We are providing the following information in compliance with Rule 13-01 of Regulation S-X, “Financial Disclosures about

Guarantors and Issuers of Guaranteed Securities” with respect to our senior unsecured debt securities and the Certificates.

The $19.7 billion principal amount of the senior unsecured notes issued by FedEx under a shelf registration statement are guaranteed

by certain direct and indirect subsidiaries of FedEx (“Guarantor Subsidiaries”). See Note 7 of the accompanying consolidated financial

statements for additional information regarding the terms of the senior unsecured debt securities. FedEx owns, directly or indirectly,

100% of each Guarantor Subsidiary. The guarantees (1) are unsecured obligations of the respective Guarantor Subsidiary, (2) rank

equally with all of their other unsecured and unsubordinated indebtedness, and (3) are full and unconditional and joint and several. If

we sell, transfer or otherwise dispose of all of the capital stock or all or substantially all of the assets of a Guarantor Subsidiary to any

person that is not an affiliate of FedEx, the guarantee of that Guarantor Subsidiary will terminate and holders of debt securities will no

longer have a direct claim against such subsidiary under the guarantee.

Additionally, FedEx fully and unconditionally guarantees the payment obligation of FedEx Express in respect of the $944 million

principal amount of the Certificates. See Note 7 of the accompanying consolidated financial statements for additional information

regarding the terms of the Certificates.

The following tables present summarized financial information for FedEx (as Parent) and the Guarantor Subsidiaries on a combined

basis after transactions and balances within the combined entities have been eliminated.

The following table presents the summarized balance sheet information as of May 31, 2021 (in millions):

Parent and Guarantor Subsidiaries

Current Assets

Intercompany Receivable

Total Assets

Current Liabilities

Intercompany Payable

Total Liabilities

Revenue

Intercompany Charges, net

Operating Income

Intercompany Charges, net

Income Before Income Taxes

Net Income

The following table presents the summarized statement of income information as of May 31, 2021 (in millions):

The following table presents summarized financial information for FedEx (as Parent Guarantor) and FedEx Express (as Subsidiary

Issuer) on a combined basis after transactions and balances within the combined entities have been eliminated.

The following table presents the summarized balance sheet information as of May 31, 2021 (in millions):

Parent Guarantor and Subsidiary Issuer

12,795

3,348

80,470

9,135

—

55,783

61,455

(3,372 )

4,840

191

5,762

4,668

5,281

—

67,084

4,325

5,929

46,386

Capital expenditures increased slightly during 2021 primarily due to higher aircraft spending at FedEx Express and increased spending
Capital expenditures increased slightly during 2021 primarily due to higher aircraft spending at FedEx Express and increased spending
on package handling equipment at FedEx Ground, partially offset by lower vehicle spending across all of our transportation segments,
on package handling equipment at FedEx Ground, partially offset by lower vehicle spending across all of our transportation segments,
as well as lower facility expenditures at FedEx Express.
as well as lower facility expenditures at FedEx Express.

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- 62 -

- 63 -

The following table provides a summary of repurchases of our common stock for the periods ended May 31 (dollars in millions,

GUARANTOR FINANCIAL INFORMATION
GUARANTOR FINANCIAL INFORMATION

except per share amounts):

Common stock repurchases

Total

Number of

2021

Average

Price Paid

Total

Number of

2020

Average

Price Paid

Total

Purchase

Price

Total

Purchase

Price

Purchased

per Share

Purchased

per Share

— $

— 20,000 $ 156.90 $

In January 2016, our Board of Directors authorized a stock repurchase program of up to 25 million shares. Shares under the current

repurchase program may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and

volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx

common stock and general market conditions. No time limit was set for the completion of the program, and the program may be

suspended or discontinued at any time. As of May 31, 2021, 5.1 million shares remained under the current stock repurchase

authorization.

Effective March 16, 2021, we further amended our amended and restated $2.0 billion five-year credit agreement (the “Five-Year

Credit Agreement”) and entered into a new $1.5 billion 364-day credit agreement (the “364-Day Credit Agreement” and together with

the Five-Year Credit Agreement, the “Credit Agreements”). The Credit Agreements no longer contain the temporary covenant added

in the fourth quarter of 2020 restricting us from repurchasing any shares of our common stock or from increasing the amount of our

quarterly dividend payable per share of common stock from $0.65 per share. Prior to the amendment of the Five-Year Credit

Agreement and entry into the current 364-Day Credit Agreement on March 16, 2021, our credit agreements contained a financial

covenant requiring us to maintain a ratio of debt to consolidated earnings (excluding noncash retirement plans MTM adjustments,

noncash pension service costs and noncash asset impairment charges) before interest, taxes, depreciation and amortization (“adjusted

EBITDA”) of not more than 3.75 to 1.0, calculated as of May 31, 2021 on a rolling four-quarter basis. Effective March 16, 2021, we

are required to maintain a ratio of debt to adjusted EBITDA of not more than 3.5 to 1.0, calculated as of the end of the applicable

quarter on a rolling four-quarter basis. See Note 7 of the accompanying consolidated financial statements for additional information

regarding the Credit Agreements.

CAPITAL RESOURCES

Our operations are capital intensive, characterized by significant investments in aircraft, package handling and sort equipment,

vehicles and trailers, technology and facilities. The amount and timing of capital investments depend on various factors, including pre-

existing contractual commitments, anticipated volume growth, domestic and international economic conditions, new or enhanced

services, geographical expansion of services, availability of satisfactory financing and actions of regulatory authorities.

The following table compares capital expenditures by asset category and reportable segment for the years ended May 31 (in millions):

Aircraft and related equipment

Package handling and ground support equipment

Vehicles and trailers

Information technology

Facilities and other

Total capital expenditures

FedEx Express segment

FedEx Ground segment

FedEx Freight segment

FedEx Services segment

Other

Total capital expenditures

2021

2020

Percent Change

2,451 $

1,352

351

816

914

5,884 $

3,503 $

1,446

320

512

103

1,628

910

1,056

915

1,359

5,868

3,560

1,083

539

527

159

5,884 $

5,868

(67 )

(11 )

(33 )

—

(2 )

(41 )

(3 )

(35 )

—

Capital expenditures increased slightly during 2021 primarily due to higher aircraft spending at FedEx Express and increased spending

on package handling equipment at FedEx Ground, partially offset by lower vehicle spending across all of our transportation segments,

as well as lower facility expenditures at FedEx Express.

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

The $19.7 billion principal amount of the senior unsecured notes issued by FedEx under a shelf registration statement are guaranteed
The $19.7 billion principal amount of the senior unsecured notes issued by FedEx under a shelf registration statement are guaranteed
by certain direct and indirect subsidiaries of FedEx (“Guarantor Subsidiaries”). See Note 7 of the accompanying consolidated financial
by certain direct and indirect subsidiaries of FedEx (“Guarantor Subsidiaries”). See Note 7 of the accompanying consolidated financial
statements for additional information regarding the terms of the senior unsecured debt securities. FedEx owns, directly or indirectly,
statements for additional information regarding the terms of the senior unsecured debt securities. FedEx owns, directly or indirectly,
100% of each Guarantor Subsidiary. The guarantees (1) are unsecured obligations of the respective Guarantor Subsidiary, (2) rank
100% of each Guarantor Subsidiary. The guarantees (1) are unsecured obligations of the respective Guarantor Subsidiary, (2) rank
equally with all of their other unsecured and unsubordinated indebtedness, and (3) are full and unconditional and joint and several. If
equally with all of their other unsecured and unsubordinated indebtedness, and (3) are full and unconditional and joint and several. If
we sell, transfer or otherwise dispose of all of the capital stock or all or substantially all of the assets of a Guarantor Subsidiary to any
we sell, transfer or otherwise dispose of all of the capital stock or all or substantially all of the assets of a Guarantor Subsidiary to any
person that is not an affiliate of FedEx, the guarantee of that Guarantor Subsidiary will terminate and holders of debt securities will no
person that is not an affiliate of FedEx, the guarantee of that Guarantor Subsidiary will terminate and holders of debt securities will no
longer have a direct claim against such subsidiary under the guarantee.
longer have a direct claim against such subsidiary under the guarantee.

Additionally, FedEx fully and unconditionally guarantees the payment obligation of FedEx Express in respect of the $944 million
Additionally, FedEx fully and unconditionally guarantees the payment obligation of FedEx Express in respect of the $944 million
principal amount of the Certificates. See Note 7 of the accompanying consolidated financial statements for additional information
principal amount of the Certificates. See Note 7 of the accompanying consolidated financial statements for additional information
regarding the terms of the Certificates.
regarding the terms of the Certificates.

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

The following table presents the summarized balance sheet information as of May 31, 2021 (in millions):
The following table presents the summarized balance sheet information as of May 31, 2021 (in millions):

Parent and Guarantor Subsidiaries
Parent and Guarantor Subsidiaries

Current Assets
Current Assets
Intercompany Receivable
Intercompany Receivable
Total Assets
Total Assets
Current Liabilities
Current Liabilities
Intercompany Payable
Intercompany Payable
Total Liabilities
Total Liabilities

$
$

The following table presents the summarized statement of income information as of May 31, 2021 (in millions):
The following table presents the summarized statement of income information as of May 31, 2021 (in millions):

Revenue
Revenue
Intercompany Charges, net
Intercompany Charges, net
Operating Income
Operating Income
Intercompany Charges, net
Intercompany Charges, net
Income Before Income Taxes
Income Before Income Taxes
Net Income
Net Income

$
$

12,795
12,795
3,348
3,348
80,470
80,470
9,135
9,135
—
—
55,783
55,783

61,455
61,455
(3,372 )
(3,372 )
4,840
4,840
191
191
5,762
5,762
4,668
4,668

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

Parent Guarantor and Subsidiary Issuer
Parent Guarantor and Subsidiary Issuer

$
$

5,281
5,281
—
—
67,084
67,084
4,325
4,325
5,929
5,929
46,386
46,386

- 62 -

- 63 -
- 63 -

LIQUIDITY OUTLOOK
LIQUIDITY OUTLOOK

$
$

23,158
23,158
(1,678 )
(1,678 )
1,531
1,531
806
806
4,608
4,608
4,254
4,254

In response to current business and economic conditions as referenced above in the “Outlook” section of this MD&A, we have and
In response to current business and economic conditions as referenced above in the “Outlook” section of this MD&A, we have and
will continue to actively manage our cash flow and seek to protect capital in a still challenging macroeconomic environment from the
will continue to actively manage our cash flow and seek to protect capital in a still challenging macroeconomic environment from the
ongoing pandemic. Following our 11% debt reduction in the fourth quarter of 2021, our liquidity position remains strong with $7.1
ongoing pandemic. Following our 11% debt reduction in the fourth quarter of 2021, our liquidity position remains strong with $7.1
billion in cash and $3.5 billion in available liquidity under our Credit Agreements, and we believe that our cash and cash equivalents,
billion in cash and $3.5 billion in available liquidity under our Credit Agreements, and we believe that our cash and cash equivalents,
cash flow from operations and available financing sources will be adequate to meet our liquidity needs, including expected 2022
cash flow from operations and available financing sources will be adequate to meet our liquidity needs, including expected 2022
capital expenditures. As business and economic conditions improve, we will routinely evaluate our capital allocation strategy with a
capital expenditures. As business and economic conditions improve, we will routinely evaluate our capital allocation strategy with a
continued focus on strengthening our balance sheet.
continued focus on strengthening our balance sheet.

Our cash and cash equivalents balance at May 31, 2021 includes $2.3 billion of cash in foreign jurisdictions associated with our
Our cash and cash equivalents balance at May 31, 2021 includes $2.3 billion of cash in foreign jurisdictions associated with our
permanent reinvestment strategy. We are able to access the majority of this cash without a material tax cost and do not believe that the
permanent reinvestment strategy. We are able to access the majority of this cash without a material tax cost and do not believe that the
indefinite reinvestment of these funds impairs our ability to meet our U.S. domestic debt or working capital obligations.
indefinite reinvestment of these funds impairs our ability to meet our U.S. domestic debt or working capital obligations.

Our capital expenditures are expected to be approximately $7.2 billion in 2022, which will include strategic investments to increase
Our capital expenditures are expected to be approximately $7.2 billion in 2022, which will include strategic investments to increase
capacity to support elevated volume levels, aircraft modernization at FedEx Express and investments in productivity and safety. In
capacity to support elevated volume levels, aircraft modernization at FedEx Express and investments in productivity and safety. In
addition, we are making investments over multiple years of approximately $1.5 billion to significantly expand the FedEx Express
addition, we are making investments over multiple years of approximately $1.5 billion to significantly expand the FedEx Express
Indianapolis hub and approximately $1.5 billion to modernize the FedEx Express Memphis World Hub. We expect approximately
Indianapolis hub and approximately $1.5 billion to modernize the FedEx Express Memphis World Hub. We expect approximately
50% of capital expenditures in 2022 to be designated for growth initiatives. Our expected capital expenditures for 2022 include $1.7
50% of capital expenditures in 2022 to be designated for growth initiatives. Our expected capital expenditures for 2022 include $1.7
billion for delivery of aircraft and related equipment and progress payments toward future aircraft deliveries at FedEx Express. While
billion for delivery of aircraft and related equipment and progress payments toward future aircraft deliveries at FedEx Express. While
we continue to invest in our business, the capital intensity relative to revenue remains below historical levels.
we continue to invest in our business, the capital intensity relative to revenue remains below historical levels.

We have several aircraft modernization programs underway that are supported by the purchase of Boeing 777 Freighter and Boeing
We have several aircraft modernization programs underway that are supported by the purchase of Boeing 777 Freighter and Boeing
767-300 Freighter (“B767F”) aircraft. These aircraft are significantly more fuel-efficient per unit than the aircraft types previously
767-300 Freighter (“B767F”) aircraft. These aircraft are significantly more fuel-efficient per unit than the aircraft types previously
utilized, and these expenditures are necessary to achieve significant long-term operating savings and to replace older aircraft. Our
utilized, and these expenditures are necessary to achieve significant long-term operating savings and to replace older aircraft. Our
ability to delay the timing of these aircraft-related expenditures is limited without incurring significant costs to modify existing
ability to delay the timing of these aircraft-related expenditures is limited without incurring significant costs to modify existing
purchase agreements.
purchase agreements.

On June 22, 2021, FedEx Express exercised options to purchase an additional 20 B767F aircraft, ten of which will be delivered in
On June 22, 2021, FedEx Express exercised options to purchase an additional 20 B767F aircraft, ten of which will be delivered in
2024 and ten of which will be delivered in 2025.
2024 and ten of which will be delivered in 2025.

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

The Five-Year Credit Agreement expires in March 2026 and includes a $250 million letter of credit sublimit. The 364-Day Credit
The Five-Year Credit Agreement expires in March 2026 and includes a $250 million letter of credit sublimit. The 364-Day Credit
Agreement expires in March 2022. See Note 7 of the accompanying consolidated financial statements for a description of the terms
Agreement expires in March 2022. See Note 7 of the accompanying consolidated financial statements for a description of the terms
and significant covenants of the Credit Agreements.
and significant covenants of the Credit Agreements.

Operating Activities

For 2022, we anticipate making voluntary contributions of $500 million to our U.S. Pension Plans. As noted in our discussion of
For 2022, we anticipate making voluntary contributions of $500 million to our U.S. Pension Plans. As noted in our discussion of
critical accounting estimates, we do not anticipate contributions to our U.S. Pension Plans will be required for the foreseeable future
critical accounting estimates, we do not anticipate contributions to our U.S. Pension Plans will be required for the foreseeable future
based on our funded status and the fact we have a credit balance related to our cumulative excess voluntary pension contributions over
based on our funded status and the fact we have a credit balance related to our cumulative excess voluntary pension contributions over
those required that exceeds $3 billion. The credit balance is subtracted from plan assets to determine the minimum funding
those required that exceeds $3 billion. The credit balance is subtracted from plan assets to determine the minimum funding
requirements. Therefore, we could eliminate all required contributions to our principal U.S. Pension Plans for several years if we were
requirements. Therefore, we could eliminate all required contributions to our principal U.S. Pension Plans for several years if we were
to choose to waive part of that credit balance in any given year. Our U.S. Pension Plans have ample funds to meet expected benefit
to choose to waive part of that credit balance in any given year. Our U.S. Pension Plans have ample funds to meet expected benefit
payments.
payments.

On June 14, 2021, our Board of Directors declared a quarterly dividend of $0.75 per share of common stock. The dividend was paid
On June 14, 2021, our Board of Directors declared a quarterly dividend of $0.75 per share of common stock. The dividend was paid
on July 12, 2021 to stockholders of record as of the close of business on June 28, 2021. Each quarterly dividend payment is subject to
on July 12, 2021 to stockholders of record as of the close of business on June 28, 2021. Each quarterly dividend payment is subject to
review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis.
review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis.

- 64 -
- 64 -

- 65 -

The Credit Agreements no longer contain the temporary covenant added in the fourth quarter of 2020 restricting us from repurchasing

any shares of our common stock, as mentioned above. During the first quarter of 2022, we resumed our stock repurchase program. See

Note 1 of the accompanying consolidated financial statements for more information regarding our stock repurchase program.

Standard & Poor’s has assigned us a senior unsecured debt credit rating of BBB, a Certificates rating of AA-, a commercial paper

rating of A-2 and a ratings outlook of “stable.” Moody’s Investors Service has assigned us an unsecured debt credit rating of Baa2, a

Certificates rating of Aa3, a commercial paper rating of P-2 and a ratings outlook of “stable.” If our credit ratings drop, our interest

expense may increase. If our commercial paper ratings drop below current levels, we may have difficulty utilizing the commercial

paper market. If our senior unsecured debt credit ratings drop below investment grade, our access to financing may become limited.

CONTRACTUAL CASH OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

The following table sets forth a summary of our contractual cash obligations as of May 31, 2021. Certain of these obligations are

reflected in our balance sheet, while others are disclosed as future obligations. We have certain contingent liabilities that are not

accrued in our balance sheet in accordance with accounting principles generally accepted in the United States. These contingent

liabilities are not included in the table below. We have other long-term liabilities reflected in our balance sheet, including deferred

income taxes, qualified and nonqualified pension and postretirement healthcare plan liabilities and other self-insurance

accruals. Unless statutorily required, the payment obligations associated with these liabilities are not reflected in the table below due

to the absence of scheduled maturities. Accordingly, this table is not meant to represent a forecast of our total cash expenditures for

any of the periods presented.

Operating activities:

Operating leases

Non-capital purchase obligations and other

Interest on long-term debt

Investing activities:

Aircraft and aircraft-related capital

commitments

Other capital purchase obligations

Financing activities:

Debt

Finance leases

Total

Payments Due by Fiscal Year (Undiscounted)

(in millions)

2022

2023

2024

2025

2026

Thereafter

Total

$ 2,637 $ 2,453 $ 2,088 $ 1,808 $ 1,577 $ 7,542 $ 18,105

1,491

1,074

711

708

755

707

651

706

741

2,574

7,286

705 11,385 14,922

1,452

2,172

773

231

—

4,665

121

106

1,412 18,986 20,606

698

894

$ 6,445 $ 6,597 $ 4,400 $ 3,473 $ 4,496 $ 41,188 $ 66,599

Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and

are not included in the table above. Such purchase orders often represent authorizations to purchase rather than binding

agreements. See Note 18 of the accompanying consolidated financial statements for more information on such purchase orders. The

table above does not include estimated payments of approximately $2.5 billion primarily related to build-to-suit arrangements that

have not yet commenced, as we cannot reasonably estimate the timing of the associated payments. See Note 8 of the accompanying

consolidated financial statements for further information.

The amounts reflected in the table above for operating leases represent undiscounted future minimum lease payments under

noncancelable operating leases (principally facilities and aircraft) with an initial or remaining term in excess of one year at May 31,

2021. Under the new lease accounting rules, the majority of these leases are recognized at the net present value on the balance sheet as

a liability with an offsetting right-to-use asset effective in 2020. See Note 8 of the accompanying consolidated financial statements for

further information. Credit rating agencies routinely use information concerning minimum lease payments required for our operating

leases to calculate our debt capacity.

The amounts reflected for purchase obligations represent noncancelable agreements to purchase goods or services that are not capital-

related. Such contracts include those for printing and advertising and promotions contracts.

Included in the table above within the caption entitled “Non-capital purchase obligations and other” is our estimate of the current

portion of the liability ($103 million) for uncertain tax positions. We cannot reasonably estimate the timing of the long-term payments

or the amount by which the liability will increase or decrease over time; therefore, the long-term portion of the liability ($89 million)

is excluded from the table. See Note 13 of the accompanying consolidated financial statements for further information.

23,158

(1,678 )

1,531

806

4,608

4,254

The Credit Agreements no longer contain the temporary covenant added in the fourth quarter of 2020 restricting us from repurchasing
The Credit Agreements no longer contain the temporary covenant added in the fourth quarter of 2020 restricting us from repurchasing
any shares of our common stock, as mentioned above. During the first quarter of 2022, we resumed our stock repurchase program. See
any shares of our common stock, as mentioned above. During the first quarter of 2022, we resumed our stock repurchase program. See
Note 1 of the accompanying consolidated financial statements for more information regarding our stock repurchase program.
Note 1 of the accompanying consolidated financial statements for more information regarding our stock repurchase program.

Standard & Poor’s has assigned us a senior unsecured debt credit rating of BBB, a Certificates rating of AA-, a commercial paper
Standard & Poor’s has assigned us a senior unsecured debt credit rating of BBB, a Certificates rating of AA-, a commercial paper
rating of A-2 and a ratings outlook of “stable.” Moody’s Investors Service has assigned us an unsecured debt credit rating of Baa2, a
rating of A-2 and a ratings outlook of “stable.” Moody’s Investors Service has assigned us an unsecured debt credit rating of Baa2, a
Certificates rating of Aa3, a commercial paper rating of P-2 and a ratings outlook of “stable.” If our credit ratings drop, our interest
Certificates rating of Aa3, a commercial paper rating of P-2 and a ratings outlook of “stable.” If our credit ratings drop, our interest
expense may increase. If our commercial paper ratings drop below current levels, we may have difficulty utilizing the commercial
expense may increase. If our commercial paper ratings drop below current levels, we may have difficulty utilizing the commercial
paper market. If our senior unsecured debt credit ratings drop below investment grade, our access to financing may become limited.
paper market. If our senior unsecured debt credit ratings drop below investment grade, our access to financing may become limited.

CONTRACTUAL CASH OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS
CONTRACTUAL CASH OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

The following table sets forth a summary of our contractual cash obligations as of May 31, 2021. Certain of these obligations are
The following table sets forth a summary of our contractual cash obligations as of May 31, 2021. Certain of these obligations are
reflected in our balance sheet, while others are disclosed as future obligations. We have certain contingent liabilities that are not
reflected in our balance sheet, while others are disclosed as future obligations. We have certain contingent liabilities that are not
accrued in our balance sheet in accordance with accounting principles generally accepted in the United States. These contingent
accrued in our balance sheet in accordance with accounting principles generally accepted in the United States. These contingent
liabilities are not included in the table below. We have other long-term liabilities reflected in our balance sheet, including deferred
liabilities are not included in the table below. We have other long-term liabilities reflected in our balance sheet, including deferred
income taxes, qualified and nonqualified pension and postretirement healthcare plan liabilities and other self-insurance
income taxes, qualified and nonqualified pension and postretirement healthcare plan liabilities and other self-insurance
accruals. Unless statutorily required, the payment obligations associated with these liabilities are not reflected in the table below due
accruals. Unless statutorily required, the payment obligations associated with these liabilities are not reflected in the table below due
to the absence of scheduled maturities. Accordingly, this table is not meant to represent a forecast of our total cash expenditures for
to the absence of scheduled maturities. Accordingly, this table is not meant to represent a forecast of our total cash expenditures for
any of the periods presented.
any of the periods presented.

The following table presents the summarized statement of income information as of May 31, 2021 (in millions):

Revenue

Intercompany Charges, net

Operating Income

Intercompany Charges, net

Income Before Income Taxes

Net Income

LIQUIDITY OUTLOOK

In response to current business and economic conditions as referenced above in the “Outlook” section of this MD&A, we have and

will continue to actively manage our cash flow and seek to protect capital in a still challenging macroeconomic environment from the

ongoing pandemic. Following our 11% debt reduction in the fourth quarter of 2021, our liquidity position remains strong with $7.1

billion in cash and $3.5 billion in available liquidity under our Credit Agreements, and we believe that our cash and cash equivalents,

cash flow from operations and available financing sources will be adequate to meet our liquidity needs, including expected 2022

capital expenditures. As business and economic conditions improve, we will routinely evaluate our capital allocation strategy with a

continued focus on strengthening our balance sheet.

Our cash and cash equivalents balance at May 31, 2021 includes $2.3 billion of cash in foreign jurisdictions associated with our

permanent reinvestment strategy. We are able to access the majority of this cash without a material tax cost and do not believe that the

indefinite reinvestment of these funds impairs our ability to meet our U.S. domestic debt or working capital obligations.

Our capital expenditures are expected to be approximately $7.2 billion in 2022, which will include strategic investments to increase

capacity to support elevated volume levels, aircraft modernization at FedEx Express and investments in productivity and safety. In

addition, we are making investments over multiple years of approximately $1.5 billion to significantly expand the FedEx Express

Indianapolis hub and approximately $1.5 billion to modernize the FedEx Express Memphis World Hub. We expect approximately

50% of capital expenditures in 2022 to be designated for growth initiatives. Our expected capital expenditures for 2022 include $1.7

billion for delivery of aircraft and related equipment and progress payments toward future aircraft deliveries at FedEx Express. While

we continue to invest in our business, the capital intensity relative to revenue remains below historical levels.

We have several aircraft modernization programs underway that are supported by the purchase of Boeing 777 Freighter and Boeing

767-300 Freighter (“B767F”) aircraft. These aircraft are significantly more fuel-efficient per unit than the aircraft types previously

utilized, and these expenditures are necessary to achieve significant long-term operating savings and to replace older aircraft. Our

ability to delay the timing of these aircraft-related expenditures is limited without incurring significant costs to modify existing

purchase agreements.

On June 22, 2021, FedEx Express exercised options to purchase an additional 20 B767F aircraft, ten of which will be delivered in

2024 and ten of which will be delivered in 2025.

We have a shelf registration statement filed with the Securities and Exchange Commission (“SEC”) that allows us to sell, in one or

more future offerings, any combination of our unsecured debt securities and common stock and allows pass-through trusts formed by

FedEx Express to sell, in one or more future offerings, pass-through certificates.

and significant covenants of the Credit Agreements.

For 2022, we anticipate making voluntary contributions of $500 million to our U.S. Pension Plans. As noted in our discussion of

critical accounting estimates, we do not anticipate contributions to our U.S. Pension Plans will be required for the foreseeable future

based on our funded status and the fact we have a credit balance related to our cumulative excess voluntary pension contributions over

those required that exceeds $3 billion. The credit balance is subtracted from plan assets to determine the minimum funding

requirements. Therefore, we could eliminate all required contributions to our principal U.S. Pension Plans for several years if we were

to choose to waive part of that credit balance in any given year. Our U.S. Pension Plans have ample funds to meet expected benefit

payments.

On June 14, 2021, our Board of Directors declared a quarterly dividend of $0.75 per share of common stock. The dividend was paid

on July 12, 2021 to stockholders of record as of the close of business on June 28, 2021. Each quarterly dividend payment is subject to

review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis.

Operating activities:
Operating activities:
Operating leases
Operating leases
Non-capital purchase obligations and other
Non-capital purchase obligations and other
Interest on long-term debt
Interest on long-term debt

Investing activities:
Investing activities:

Aircraft and aircraft-related capital
Aircraft and aircraft-related capital
commitments
commitments
Other capital purchase obligations
Other capital purchase obligations

Financing activities:
Financing activities:

Debt
Debt
Finance leases
Finance leases
Total
Total

$ 2,637 $ 2,453 $ 2,088 $ 1,808 $ 1,577 $ 7,542 $ 18,105
$ 2,637 $ 2,453 $ 2,088 $ 1,808 $ 1,577 $ 7,542 $ 18,105
741
7,286
2,574
2,574
741
7,286
705 11,385 14,922
705 11,385 14,922

1,491
1,491
711
711

1,074
1,074
708
708

651
651
706
706

755
755
707
707

1,452
1,452
83
83

2,172
2,172
32
32

773
773
1
1

231
231
1
1

37
37
1
1

—
—
3
3

4,665
4,665
121
121

52
52
19
19

1,412 18,986 20,606
1,412 18,986 20,606
894
894
$ 6,445 $ 6,597 $ 4,400 $ 3,473 $ 4,496 $ 41,188 $ 66,599
$ 6,445 $ 6,597 $ 4,400 $ 3,473 $ 4,496 $ 41,188 $ 66,599

52
52
106
106

52
52
24
24

698
698

23
23

The Five-Year Credit Agreement expires in March 2026 and includes a $250 million letter of credit sublimit. The 364-Day Credit

Agreement expires in March 2022. See Note 7 of the accompanying consolidated financial statements for a description of the terms

Operating Activities
Operating Activities

Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and
Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and
are not included in the table above. Such purchase orders often represent authorizations to purchase rather than binding
are not included in the table above. Such purchase orders often represent authorizations to purchase rather than binding
agreements. See Note 18 of the accompanying consolidated financial statements for more information on such purchase orders. The
agreements. See Note 18 of the accompanying consolidated financial statements for more information on such purchase orders. The
table above does not include estimated payments of approximately $2.5 billion primarily related to build-to-suit arrangements that
table above does not include estimated payments of approximately $2.5 billion primarily related to build-to-suit arrangements that
have not yet commenced, as we cannot reasonably estimate the timing of the associated payments. See Note 8 of the accompanying
have not yet commenced, as we cannot reasonably estimate the timing of the associated payments. See Note 8 of the accompanying
consolidated financial statements for further information.
consolidated financial statements for further information.

The amounts reflected in the table above for operating leases represent undiscounted future minimum lease payments under
The amounts reflected in the table above for operating leases represent undiscounted future minimum lease payments under
noncancelable operating leases (principally facilities and aircraft) with an initial or remaining term in excess of one year at May 31,
noncancelable operating leases (principally facilities and aircraft) with an initial or remaining term in excess of one year at May 31,
2021. Under the new lease accounting rules, the majority of these leases are recognized at the net present value on the balance sheet as
2021. Under the new lease accounting rules, the majority of these leases are recognized at the net present value on the balance sheet as
a liability with an offsetting right-to-use asset effective in 2020. See Note 8 of the accompanying consolidated financial statements for
a liability with an offsetting right-to-use asset effective in 2020. See Note 8 of the accompanying consolidated financial statements for
further information. Credit rating agencies routinely use information concerning minimum lease payments required for our operating
further information. Credit rating agencies routinely use information concerning minimum lease payments required for our operating
leases to calculate our debt capacity.
leases to calculate our debt capacity.

The amounts reflected for purchase obligations represent noncancelable agreements to purchase goods or services that are not capital-
The amounts reflected for purchase obligations represent noncancelable agreements to purchase goods or services that are not capital-
related. Such contracts include those for printing and advertising and promotions contracts.
related. Such contracts include those for printing and advertising and promotions contracts.

Included in the table above within the caption entitled “Non-capital purchase obligations and other” is our estimate of the current
Included in the table above within the caption entitled “Non-capital purchase obligations and other” is our estimate of the current
portion of the liability ($103 million) for uncertain tax positions. We cannot reasonably estimate the timing of the long-term payments
portion of the liability ($103 million) for uncertain tax positions. We cannot reasonably estimate the timing of the long-term payments
or the amount by which the liability will increase or decrease over time; therefore, the long-term portion of the liability ($89 million)
or the amount by which the liability will increase or decrease over time; therefore, the long-term portion of the liability ($89 million)
is excluded from the table. See Note 13 of the accompanying consolidated financial statements for further information.
is excluded from the table. See Note 13 of the accompanying consolidated financial statements for further information.

- 64 -

- 65 -
- 65 -

Payments Due by Fiscal Year (Undiscounted)
Payments Due by Fiscal Year (Undiscounted)
(in millions)
(in millions)
2025
2025

2022
2022

2023
2023

Thereafter
Thereafter

Total
Total

2024
2024

2026
2026

The amounts reflected in the table above for interest on long-term debt represent future interest payments due on our long-term debt.
The amounts reflected in the table above for interest on long-term debt represent future interest payments due on our long-term debt.

Investing Activities
Investing Activities

The amounts reflected in the table above for capital purchase obligations represent noncancelable agreements to purchase capital-
The amounts reflected in the table above for capital purchase obligations represent noncancelable agreements to purchase capital-
related equipment. Such contracts include those for certain purchases of aircraft, aircraft modifications, vehicles and trailers, facilities,
related equipment. Such contracts include those for certain purchases of aircraft, aircraft modifications, vehicles and trailers, facilities,
computers and other equipment.
computers and other equipment.

Life Insurance Company.

Financing Activities
Financing Activities

We have certain financial instruments representing potential commitments, not reflected in the table above, that were incurred in the
We have certain financial instruments representing potential commitments, not reflected in the table above, that were incurred in the
normal course of business to support our operations, including standby letters of credit and surety bonds. These instruments are
normal course of business to support our operations, including standby letters of credit and surety bonds. These instruments are
required under certain U.S. self-insurance programs and are also used in the normal course of operations. The underlying liabilities
required under certain U.S. self-insurance programs and are also used in the normal course of operations. The underlying liabilities
insured by these instruments are reflected in our balance sheets, where applicable. Therefore, no additional liability is reflected for the
insured by these instruments are reflected in our balance sheets, where applicable. Therefore, no additional liability is reflected for the
letters of credit and surety bonds themselves.
letters of credit and surety bonds themselves.

The amounts reflected in the table above for long-term debt represent future scheduled principal payments on our long-term debt.
The amounts reflected in the table above for long-term debt represent future scheduled principal payments on our long-term debt.

The amounts reflected in the table above for finance leases represent undiscounted future minimum lease payments under
The amounts reflected in the table above for finance leases represent undiscounted future minimum lease payments under
noncancelable finance leases with an initial or remaining term in excess of one year at May 31, 2021.
noncancelable finance leases with an initial or remaining term in excess of one year at May 31, 2021.

We do not have any guarantees or other off-balance sheet financing arrangements, including variable interest entities, which we
We do not have any guarantees or other off-balance sheet financing arrangements, including variable interest entities, which we
believe could have a material impact on our financial condition or liquidity.
believe could have a material impact on our financial condition or liquidity.

OTHER BUSINESS MATTERS
OTHER BUSINESS MATTERS

On June 24, 2019, FedEx filed suit in U.S. District Court in the District of Columbia seeking to enjoin the U.S. Department of
On June 24, 2019, FedEx filed suit in U.S. District Court in the District of Columbia seeking to enjoin the U.S. Department of
Commerce (the “DOC”) from enforcing prohibitions contained in the Export Administration Regulations against FedEx. On
Commerce (the “DOC”) from enforcing prohibitions contained in the Export Administration Regulations against FedEx. On
September 11, 2020, the court granted the DOC’s motion to dismiss the lawsuit. On November 5, 2020, we appealed this decision.
September 11, 2020, the court granted the DOC’s motion to dismiss the lawsuit. On November 5, 2020, we appealed this decision.

CRITICAL ACCOUNTING ESTIMATES
CRITICAL ACCOUNTING ESTIMATES

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

The estimates discussed below include the financial statement elements that are either the most judgmental or involve the selection or
The estimates discussed below include the financial statement elements that are either the most judgmental or involve the selection or
application of alternative accounting policies and are material to our financial statements. Management has discussed the development
application of alternative accounting policies and are material to our financial statements. Management has discussed the development
and selection of these critical accounting estimates with the Audit Committee of our Board of Directors and with our independent
and selection of these critical accounting estimates with the Audit Committee of our Board of Directors and with our independent
registered public accounting firm.
registered public accounting firm.

RETIREMENT PLANS
RETIREMENT PLANS

Over the past several years, we have taken numerous actions to reduce pension-related risk and expense, including the introduction of

our portable pension account benefit, freezing our traditional pension benefit, employing a liability-driven investment strategy,

permitting certain former employees with a traditional pension benefit to make a one-time, irrevocable election to receive their

benefits in a lump-sum distribution and transferring approximately $6 billion of our U.S. Pension Plan obligations to Metropolitan

In 2020, we announced the closing of our U.S.-based defined benefit pension plans to new non-union employees hired on or after

January 1, 2020. We will introduce an all-401(k)-plan retirement benefit structure for eligible employees with a higher company

match of up to 8% across all U.S.-based operating companies in 2022. During calendar 2021, current eligible employees under the

Portable Pension Account (PPA) pension formula will be given a one-time option to continue to be eligible for pension compensation

credits under the existing PPA formula and remain in the existing 401(k) plan with its company match of up to 3.5%, or to cease

receiving compensation credits under the PPA and move to the new 401(k) plan with the higher company match of up to 8%. Changes

to the new 401(k) plan structure become effective beginning January 1, 2022. While this new program will provide employees greater

flexibility and reduce our long-term pension costs, it will not have a material impact on current or near-term financial results.

The “Salaries and employee benefits” caption of our accompanying consolidated income statements includes retirement plan expense

associated with service costs. The “Other retirement plans income (expense)” caption of our accompanying consolidated income

statements includes our fourth quarter MTM adjustment, expense associated with prior service and interest costs, the expected return

on assets (“EROA”) and settlements. The retirement plans MTM adjustments for 2021 also include the MTM retirement plan

accounting adjustment related to amendments to the TNT Express Netherlands Pension Plan. A summary of our retirement plan costs

affecting our financial results over the past two years is as follows (in millions):

2021

2020

Expenses affecting Operating Income:

Defined benefit pension plans

Postretirement healthcare plans

Defined contribution plans

Items affecting Other Income (Expense):

Retirement plans interest/other

Retirement plans MTM adjustments

Actual versus expected return on assets

Discount rate change

Demographic experience:

Current year actuarial loss

Change in future assumptions

Curtailment gain on TNT Netherlands pension plan

Total MTM (gain) loss

The components of the MTM adjustments are as follows (presented as (gain) loss in millions):

934 $

685

1,663 $

807 $

1,176

1,983 $

(1,712 ) $

(397 )

302

685

(54 )

(1,176 ) $

2021

2020

864

574

1,480

672

(794 )

(122 )

(2,024 )

2,997

(229 )

—

794

OVERVIEW. We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit
OVERVIEW. We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit
pension plans, defined contribution plans and postretirement healthcare plans and are described in Note 14 of the accompanying
pension plans, defined contribution plans and postretirement healthcare plans and are described in Note 14 of the accompanying
consolidated financial statements. The rules for pension accounting are complex and can produce volatility in our earnings, financial
consolidated financial statements. The rules for pension accounting are complex and can produce volatility in our earnings, financial
condition and liquidity.
condition and liquidity.

2021

We are required to record annual year-end adjustments to our financial statements for the net funded status of our defined benefit
We are required to record annual year-end adjustments to our financial statements for the net funded status of our defined benefit
pension and postretirement healthcare plans. The funded status of our plans also impacts our liquidity; however, the cash funding rules
pension and postretirement healthcare plans. The funded status of our plans also impacts our liquidity; however, the cash funding rules
operate under a completely different set of assumptions and standards than those used for financial reporting purposes. As a result, our
operate under a completely different set of assumptions and standards than those used for financial reporting purposes. As a result, our
actual cash funding requirements can differ materially from our reported funded status.
actual cash funding requirements can differ materially from our reported funded status.

Service cost for our defined benefit pension and postretirement healthcare plans was $978 million in 2021 and $906 million in 2020

and is expected to be approximately $939 million in 2022.

Net of all fees and expenses, the actual rate of return on our U.S. Pension Plan assets was 12.90%, which was higher than our expected

return of 6.75%. Positive portfolio returns derived from our return-seeking assets were partially offset by losses from our fixed-income

assets due to rising long-term interest rates. The weighted-average discount rate for all our pension and postretirement healthcare plans

increased six basis points from 3.05% at May 31, 2020 to 3.11% at May 31, 2021. The demographic experience in 2021 reflects an

update to our mortality and retirement rate assumptions and a current-year actuarial loss due to unfavorable experience compared to

various demographic assumptions.

- 66 -
- 66 -

- 67 -

The amounts reflected in the table above for interest on long-term debt represent future interest payments due on our long-term debt.

The amounts reflected in the table above for capital purchase obligations represent noncancelable agreements to purchase capital-

related equipment. Such contracts include those for certain purchases of aircraft, aircraft modifications, vehicles and trailers, facilities,

As of May 31, 2021, we had $948 million in deposits and progress payments on aircraft purchases and other planned aircraft-related

Investing Activities

computers and other equipment.

transactions.

Financing Activities

We have certain financial instruments representing potential commitments, not reflected in the table above, that were incurred in the

normal course of business to support our operations, including standby letters of credit and surety bonds. These instruments are

required under certain U.S. self-insurance programs and are also used in the normal course of operations. The underlying liabilities

insured by these instruments are reflected in our balance sheets, where applicable. Therefore, no additional liability is reflected for the

letters of credit and surety bonds themselves.

The amounts reflected in the table above for long-term debt represent future scheduled principal payments on our long-term debt.

The amounts reflected in the table above for finance leases represent undiscounted future minimum lease payments under

noncancelable finance leases with an initial or remaining term in excess of one year at May 31, 2021.

We do not have any guarantees or other off-balance sheet financing arrangements, including variable interest entities, which we

believe could have a material impact on our financial condition or liquidity.

OTHER BUSINESS MATTERS

On June 24, 2019, FedEx filed suit in U.S. District Court in the District of Columbia seeking to enjoin the U.S. Department of

Commerce (the “DOC”) from enforcing prohibitions contained in the Export Administration Regulations against FedEx. On

September 11, 2020, the court granted the DOC’s motion to dismiss the lawsuit. On November 5, 2020, we appealed this decision.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires

management to make significant judgments and estimates to develop amounts reflected and disclosed in the financial statements. In

many cases, there are alternative policies or estimation techniques that could be used. We maintain a thorough process to review the

application of our accounting policies and to evaluate the appropriateness of the many estimates that are required to prepare the

financial statements of a complex, global corporation. However, even under optimal circumstances, estimates routinely require

adjustment based on changing circumstances and new or better information.

The estimates discussed below include the financial statement elements that are either the most judgmental or involve the selection or

application of alternative accounting policies and are material to our financial statements. Management has discussed the development

and selection of these critical accounting estimates with the Audit Committee of our Board of Directors and with our independent

registered public accounting firm.

RETIREMENT PLANS

condition and liquidity.

Over the past several years, we have taken numerous actions to reduce pension-related risk and expense, including the introduction of
Over the past several years, we have taken numerous actions to reduce pension-related risk and expense, including the introduction of
our portable pension account benefit, freezing our traditional pension benefit, employing a liability-driven investment strategy,
our portable pension account benefit, freezing our traditional pension benefit, employing a liability-driven investment strategy,
permitting certain former employees with a traditional pension benefit to make a one-time, irrevocable election to receive their
permitting certain former employees with a traditional pension benefit to make a one-time, irrevocable election to receive their
benefits in a lump-sum distribution and transferring approximately $6 billion of our U.S. Pension Plan obligations to Metropolitan
benefits in a lump-sum distribution and transferring approximately $6 billion of our U.S. Pension Plan obligations to Metropolitan
Life Insurance Company.
Life Insurance Company.

In 2020, we announced the closing of our U.S.-based defined benefit pension plans to new non-union employees hired on or after
In 2020, we announced the closing of our U.S.-based defined benefit pension plans to new non-union employees hired on or after
January 1, 2020. We will introduce an all-401(k)-plan retirement benefit structure for eligible employees with a higher company
January 1, 2020. We will introduce an all-401(k)-plan retirement benefit structure for eligible employees with a higher company
match of up to 8% across all U.S.-based operating companies in 2022. During calendar 2021, current eligible employees under the
match of up to 8% across all U.S.-based operating companies in 2022. During calendar 2021, current eligible employees under the
Portable Pension Account (PPA) pension formula will be given a one-time option to continue to be eligible for pension compensation
Portable Pension Account (PPA) pension formula will be given a one-time option to continue to be eligible for pension compensation
credits under the existing PPA formula and remain in the existing 401(k) plan with its company match of up to 3.5%, or to cease
credits under the existing PPA formula and remain in the existing 401(k) plan with its company match of up to 3.5%, or to cease
receiving compensation credits under the PPA and move to the new 401(k) plan with the higher company match of up to 8%. Changes
receiving compensation credits under the PPA and move to the new 401(k) plan with the higher company match of up to 8%. Changes
to the new 401(k) plan structure become effective beginning January 1, 2022. While this new program will provide employees greater
to the new 401(k) plan structure become effective beginning January 1, 2022. While this new program will provide employees greater
flexibility and reduce our long-term pension costs, it will not have a material impact on current or near-term financial results.
flexibility and reduce our long-term pension costs, it will not have a material impact on current or near-term financial results.

The “Salaries and employee benefits” caption of our accompanying consolidated income statements includes retirement plan expense
The “Salaries and employee benefits” caption of our accompanying consolidated income statements includes retirement plan expense
associated with service costs. The “Other retirement plans income (expense)” caption of our accompanying consolidated income
associated with service costs. The “Other retirement plans income (expense)” caption of our accompanying consolidated income
statements includes our fourth quarter MTM adjustment, expense associated with prior service and interest costs, the expected return
statements includes our fourth quarter MTM adjustment, expense associated with prior service and interest costs, the expected return
on assets (“EROA”) and settlements. The retirement plans MTM adjustments for 2021 also include the MTM retirement plan
on assets (“EROA”) and settlements. The retirement plans MTM adjustments for 2021 also include the MTM retirement plan
accounting adjustment related to amendments to the TNT Express Netherlands Pension Plan. A summary of our retirement plan costs
accounting adjustment related to amendments to the TNT Express Netherlands Pension Plan. A summary of our retirement plan costs
affecting our financial results over the past two years is as follows (in millions):
affecting our financial results over the past two years is as follows (in millions):

Expenses affecting Operating Income:
Expenses affecting Operating Income:
Defined benefit pension plans
Defined benefit pension plans
Postretirement healthcare plans
Postretirement healthcare plans
Defined contribution plans
Defined contribution plans

Items affecting Other Income (Expense):
Items affecting Other Income (Expense):
Retirement plans interest/other
Retirement plans interest/other
Retirement plans MTM adjustments
Retirement plans MTM adjustments

2021
2021

2020
2020

$
$

934 $
934 $
44
44
685
685
1,663 $
1,663 $

807 $
807 $
1,176
1,176
1,983 $
1,983 $

The components of the MTM adjustments are as follows (presented as (gain) loss in millions):
The components of the MTM adjustments are as follows (presented as (gain) loss in millions):

Actual versus expected return on assets
Actual versus expected return on assets
Discount rate change
Discount rate change
Demographic experience:
Demographic experience:
Current year actuarial loss
Current year actuarial loss
Change in future assumptions
Change in future assumptions
Curtailment gain on TNT Netherlands pension plan
Curtailment gain on TNT Netherlands pension plan
Total MTM (gain) loss
Total MTM (gain) loss

2021
2021

2020
2020

$
$

(1,712 ) $
(1,712 ) $
(397 )
(397 )

302
302
685
685
(54 )
(54 )
(1,176 ) $
(1,176 ) $

864
864
42
42
574
574
1,480
1,480

672
672
(794 )
(794 )
(122 )
(122 )

(2,024 )
(2,024 )
2,997
2,997

50
50
(229 )
(229 )
—
—
794
794

OVERVIEW. We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit

pension plans, defined contribution plans and postretirement healthcare plans and are described in Note 14 of the accompanying

Service cost for our defined benefit pension and postretirement healthcare plans was $978 million in 2021 and $906 million in 2020
Service cost for our defined benefit pension and postretirement healthcare plans was $978 million in 2021 and $906 million in 2020
and is expected to be approximately $939 million in 2022.
and is expected to be approximately $939 million in 2022.

consolidated financial statements. The rules for pension accounting are complex and can produce volatility in our earnings, financial

2021
2021

We are required to record annual year-end adjustments to our financial statements for the net funded status of our defined benefit

pension and postretirement healthcare plans. The funded status of our plans also impacts our liquidity; however, the cash funding rules

operate under a completely different set of assumptions and standards than those used for financial reporting purposes. As a result, our

actual cash funding requirements can differ materially from our reported funded status.

Net of all fees and expenses, the actual rate of return on our U.S. Pension Plan assets was 12.90%, which was higher than our expected
Net of all fees and expenses, the actual rate of return on our U.S. Pension Plan assets was 12.90%, which was higher than our expected
return of 6.75%. Positive portfolio returns derived from our return-seeking assets were partially offset by losses from our fixed-income
return of 6.75%. Positive portfolio returns derived from our return-seeking assets were partially offset by losses from our fixed-income
assets due to rising long-term interest rates. The weighted-average discount rate for all our pension and postretirement healthcare plans
assets due to rising long-term interest rates. The weighted-average discount rate for all our pension and postretirement healthcare plans
increased six basis points from 3.05% at May 31, 2020 to 3.11% at May 31, 2021. The demographic experience in 2021 reflects an
increased six basis points from 3.05% at May 31, 2020 to 3.11% at May 31, 2021. The demographic experience in 2021 reflects an
update to our mortality and retirement rate assumptions and a current-year actuarial loss due to unfavorable experience compared to
update to our mortality and retirement rate assumptions and a current-year actuarial loss due to unfavorable experience compared to
various demographic assumptions.
various demographic assumptions.

- 66 -

- 67 -
- 67 -

2020
2020

FUNDED STATUS. The following is information concerning the funded status of our pension plans as of May 31 on a financial

The weighted-average discount rate for all our pension and postretirement healthcare plans decreased 64 basis points from 3.69% at
The weighted-average discount rate for all our pension and postretirement healthcare plans decreased 64 basis points from 3.69% at
May 31, 2019 to 3.05% at May 31, 2020. The demographic experience in 2020 reflects an update to our mortality assumption and a
May 31, 2019 to 3.05% at May 31, 2020. The demographic experience in 2020 reflects an update to our mortality assumption and a
current-year actuarial loss due to unfavorable experience compared to various demographic assumptions. The actual rate of return,
current-year actuarial loss due to unfavorable experience compared to various demographic assumptions. The actual rate of return,
which is net of all fees and expenses, on our U.S. Pension Plan assets of 15.00% was higher than our expected return of 6.75%, as
which is net of all fees and expenses, on our U.S. Pension Plan assets of 15.00% was higher than our expected return of 6.75%, as
return-seeking assets, primarily equities, were positive despite equity market volatility. Additionally, fixed-income assets performed as
return-seeking assets, primarily equities, were positive despite equity market volatility. Additionally, fixed-income assets performed as
expected as interest rates declined.
expected as interest rates declined.

DISCOUNT RATE. The discount rate is the interest rate used to discount the estimated future benefit payments that have been accrued
DISCOUNT RATE. The discount rate is the interest rate used to discount the estimated future benefit payments that have been accrued
to date (the projected benefit obligation or “PBO”) to their net present value and to determine the succeeding year’s ongoing pension
to date (the projected benefit obligation or “PBO”) to their net present value and to determine the succeeding year’s ongoing pension
expense (prior to any year-end MTM adjustment). The discount rate is determined each year at the plan measurement date. The
expense (prior to any year-end MTM adjustment). The discount rate is determined each year at the plan measurement date. The
discount rate for our U.S. Pension Plans at each measurement date was as follows:
discount rate for our U.S. Pension Plans at each measurement date was as follows:

reporting basis (in millions):

Funded Status of Plans:

Projected benefit obligation (PBO)

Fair value of plan assets

Funded status of the plans

Cash Amounts:

Cash contributions during the year

Benefit payments during the year

2021

2020

34,034 $

31,918

(2,116 ) $

461 $

1,001 $

32,441

28,691

(3,750 )

1,154

981

Measurement
Measurement
Date
Date
5/31/2021
5/31/2021
5/31/2020
5/31/2020
5/31/2019
5/31/2019

Discount Rate
Discount Rate
3.23 %
3.23 %
3.14
3.14
3.85
3.85

We determine the discount rate with the assistance of actuaries, who calculate the yield on a theoretical portfolio of high-grade
We determine the discount rate with the assistance of actuaries, who calculate the yield on a theoretical portfolio of high-grade
corporate bonds (rated Aa or better). In developing this theoretical portfolio, we select bonds that match cash flows to benefit
corporate bonds (rated Aa or better). In developing this theoretical portfolio, we select bonds that match cash flows to benefit
payments, limit our concentration by industry and issuer, and apply screening criteria to ensure bonds with a call feature have a low
payments, limit our concentration by industry and issuer, and apply screening criteria to ensure bonds with a call feature have a low
probability of being called. To the extent scheduled bond proceeds exceed the estimated benefit payments in a given period, the
probability of being called. To the extent scheduled bond proceeds exceed the estimated benefit payments in a given period, the
calculation assumes those excess proceeds are reinvested at one-year forward rates.
calculation assumes those excess proceeds are reinvested at one-year forward rates.

The measurement of our PBO and the related impact on our annual MTM adjustment is highly sensitive to the discount rate
The measurement of our PBO and the related impact on our annual MTM adjustment is highly sensitive to the discount rate
assumption. For our largest pension plan, a 50-basis-point increase in the discount rate would have decreased our 2021 PBO by
assumption. For our largest pension plan, a 50-basis-point increase in the discount rate would have decreased our 2021 PBO by
approximately $2.1 billion and a 50-basis-point decrease in the discount rate would have increased our 2021 PBO by approximately
approximately $2.1 billion and a 50-basis-point decrease in the discount rate would have increased our 2021 PBO by approximately
$2.3 billion. However, our annual net pension expense is less sensitive to changes in the discount rate. For example, a one-basis-point
$2.3 billion. However, our annual net pension expense is less sensitive to changes in the discount rate. For example, a one-basis-point
increase in the discount rate for our largest pension plan would have a $43 million effect on the fourth quarter MTM adjustment but
increase in the discount rate for our largest pension plan would have a $43 million effect on the fourth quarter MTM adjustment but
only a net $0.1 million impact on net pension expense.
only a net $0.1 million impact on net pension expense.

PLAN ASSETS. The expected average rate of return on plan assets is a long-term, forward-looking assumption. It is required to be the
PLAN ASSETS. The expected average rate of return on plan assets is a long-term, forward-looking assumption. It is required to be the
expected future long-term rate of earnings on plan assets. Our U.S. Pension Plan assets are invested primarily in publicly tradable
expected future long-term rate of earnings on plan assets. Our U.S. Pension Plan assets are invested primarily in publicly tradable
securities, and our pension plans hold only a minimal investment in FedEx common stock that is entirely at the discretion of third-
securities, and our pension plans hold only a minimal investment in FedEx common stock that is entirely at the discretion of third-
party pension fund investment managers. As part of our strategy to manage pension costs and funded status volatility, we follow a
party pension fund investment managers. As part of our strategy to manage pension costs and funded status volatility, we follow a
liability-driven investment strategy to better align plan assets with liabilities.
liability-driven investment strategy to better align plan assets with liabilities.

Establishing the expected future rate of investment return on our pension assets is a judgmental matter, which we review on an annual
Establishing the expected future rate of investment return on our pension assets is a judgmental matter, which we review on an annual
basis and revise as appropriate. Management considers the following factors in determining this assumption:
basis and revise as appropriate. Management considers the following factors in determining this assumption:

consequences.

•
•

the duration of our pension plan liabilities, which drives the investment strategy we can employ with our pension plan assets;
the duration of our pension plan liabilities, which drives the investment strategy we can employ with our pension plan assets;

the types of investment classes in which we invest our pension plan assets and the expected compound geometric return we
the types of investment classes in which we invest our pension plan assets and the expected compound geometric return we
can reasonably expect those investment classes to earn over time, net of all fees and expenses; and
can reasonably expect those investment classes to earn over time, net of all fees and expenses; and

the investment returns we can reasonably expect our investment management program to achieve in excess of the returns we
the investment returns we can reasonably expect our investment management program to achieve in excess of the returns we
could expect if investments were made strictly in indexed funds.
could expect if investments were made strictly in indexed funds.

For consolidated pension expense, we assumed a 6.75% expected long-term rate of return on our U.S. Pension Plan assets in 2021 and
For consolidated pension expense, we assumed a 6.75% expected long-term rate of return on our U.S. Pension Plan assets in 2021 and
2020. For 2022, we have decreased our EROA assumption to 6.50% due to the significant increase in 2021 administrative expenses
2020. For 2022, we have decreased our EROA assumption to 6.50% due to the significant increase in 2021 administrative expenses
payable from the pension trust due to higher Pension Benefit Guaranty Corporation (“PBGC”) variable-rate premiums (“VRP”) and
payable from the pension trust due to higher Pension Benefit Guaranty Corporation (“PBGC”) variable-rate premiums (“VRP”) and
based on our long-term outlook for the capital markets. The higher 2021 PBGC VRP resulted in a 25-basis point lower rate of return
based on our long-term outlook for the capital markets. The higher 2021 PBGC VRP resulted in a 25-basis point lower rate of return
compared to 2020. The historical annual return on our U.S. Pension Plan assets, calculated on a compound geometric basis, was 7.9%,
compared to 2020. The historical annual return on our U.S. Pension Plan assets, calculated on a compound geometric basis, was 7.9%,
net of all fees and expenses, for the 15-year period ended May 31, 2021. For our U.S. Pension Plans, a one-basis-point change in our
net of all fees and expenses, for the 15-year period ended May 31, 2021. For our U.S. Pension Plans, a one-basis-point change in our
EROA would impact our 2022 pension expense by $3 million.
EROA would impact our 2022 pension expense by $3 million.

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FUNDING. The funding requirements for our U.S. Pension Plans are governed by the Pension Protection Act of 2006, which has

aggressive funding requirements in order to avoid benefit payment restrictions that become effective if the funded status determined

under IRS rules falls below 80% at the beginning of a plan year. All of our U.S. Pension Plans have funded status levels in excess of

80% and our plans are fully funded under the Employee Retirement Income Security Act (“ERISA”). Additionally, current benefit

payments do not materially impact our total plan assets (benefit payments for our U.S. Pension Plans for 2021 were approximately

$929 million, or 3.1% of plan assets).

Over the past several years, we have made voluntary contributions to our U.S. Pension Plans in excess of the minimum required

contributions. For 2022, no pension contributions are required for our U.S. Pension Plans as they are fully funded under ERISA.

However, we expect to make voluntary contributions of $500 million to these plans in 2022.

See Note 14 of the accompanying consolidated financial statements for further information about our retirement plans.

INCOME TAXES

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our income taxes are a function of our income,

statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. The tax laws in the

various jurisdictions are complex and subject to different interpretations by us and the respective governmental taxing authorities. As a

result, significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating

uncertainties. Also, our effective tax rate is significantly affected by the earnings generated in each jurisdiction, so unexpected

fluctuations in the geographic mix of earnings could significantly impact our tax rate. Our intercompany transactions are based on

globally accepted transfer pricing principles, which align profits with the business operations and functions of the various legal entities

in our international business.

We evaluate our tax positions quarterly and adjust the balances as new information becomes available. These evaluations are based on

factors including, but not limited to, changes in facts or circumstances, changes in tax laws or their interpretations, audit activity and

changes in our business. In addition, management considers the advice of third parties in making conclusions regarding tax

Tax contingencies arise from uncertainty in the application of tax rules throughout the many jurisdictions in which we operate. Despite

our belief that our tax return positions are consistent with applicable tax laws, taxing authorities could challenge certain positions. We

record tax benefits for uncertain tax positions based upon management’s evaluation of the information available at the reporting date.

To be recognized in the financial statements, a tax benefit must be at least more likely than not of being sustained based on the

technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more likely than not of

being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Significant

judgment is required in making these determinations and adjustments to unrecognized tax benefits may be necessary to reflect actual

taxes payable upon settlement.

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets

arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net

operating loss and tax credit carryforwards. We evaluate the recoverability of these future tax deductions and credits by assessing the

adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating

earnings and available tax planning strategies. These sources of income rely heavily on estimates to make this determination so there

is a risk that these estimates will have to be revised as new information is received. To the extent we do not consider it more likely

than not that a deferred tax asset will be recovered, a valuation allowance is established. We believe we will generate sufficient future

taxable income to realize the tax benefits related to the remaining net deferred tax assets in our consolidated balance sheets that are not

subject to valuation allowances. We record the taxes for global intangible low-taxed income as a period cost.

2020

The weighted-average discount rate for all our pension and postretirement healthcare plans decreased 64 basis points from 3.69% at

May 31, 2019 to 3.05% at May 31, 2020. The demographic experience in 2020 reflects an update to our mortality assumption and a

current-year actuarial loss due to unfavorable experience compared to various demographic assumptions. The actual rate of return,

which is net of all fees and expenses, on our U.S. Pension Plan assets of 15.00% was higher than our expected return of 6.75%, as

return-seeking assets, primarily equities, were positive despite equity market volatility. Additionally, fixed-income assets performed as

expected as interest rates declined.

DISCOUNT RATE. The discount rate is the interest rate used to discount the estimated future benefit payments that have been accrued

to date (the projected benefit obligation or “PBO”) to their net present value and to determine the succeeding year’s ongoing pension

expense (prior to any year-end MTM adjustment). The discount rate is determined each year at the plan measurement date. The

discount rate for our U.S. Pension Plans at each measurement date was as follows:

Measurement

Date

5/31/2021

5/31/2020

5/31/2019

Discount Rate

3.23 %

3.14

3.85

We determine the discount rate with the assistance of actuaries, who calculate the yield on a theoretical portfolio of high-grade

corporate bonds (rated Aa or better). In developing this theoretical portfolio, we select bonds that match cash flows to benefit

payments, limit our concentration by industry and issuer, and apply screening criteria to ensure bonds with a call feature have a low

probability of being called. To the extent scheduled bond proceeds exceed the estimated benefit payments in a given period, the

calculation assumes those excess proceeds are reinvested at one-year forward rates.

The measurement of our PBO and the related impact on our annual MTM adjustment is highly sensitive to the discount rate

assumption. For our largest pension plan, a 50-basis-point increase in the discount rate would have decreased our 2021 PBO by

approximately $2.1 billion and a 50-basis-point decrease in the discount rate would have increased our 2021 PBO by approximately

$2.3 billion. However, our annual net pension expense is less sensitive to changes in the discount rate. For example, a one-basis-point

increase in the discount rate for our largest pension plan would have a $43 million effect on the fourth quarter MTM adjustment but

only a net $0.1 million impact on net pension expense.

PLAN ASSETS. The expected average rate of return on plan assets is a long-term, forward-looking assumption. It is required to be the

expected future long-term rate of earnings on plan assets. Our U.S. Pension Plan assets are invested primarily in publicly tradable

securities, and our pension plans hold only a minimal investment in FedEx common stock that is entirely at the discretion of third-

party pension fund investment managers. As part of our strategy to manage pension costs and funded status volatility, we follow a

liability-driven investment strategy to better align plan assets with liabilities.

Establishing the expected future rate of investment return on our pension assets is a judgmental matter, which we review on an annual

basis and revise as appropriate. Management considers the following factors in determining this assumption:

the duration of our pension plan liabilities, which drives the investment strategy we can employ with our pension plan assets;

the types of investment classes in which we invest our pension plan assets and the expected compound geometric return we

can reasonably expect those investment classes to earn over time, net of all fees and expenses; and

the investment returns we can reasonably expect our investment management program to achieve in excess of the returns we

could expect if investments were made strictly in indexed funds.

•

For consolidated pension expense, we assumed a 6.75% expected long-term rate of return on our U.S. Pension Plan assets in 2021 and

2020. For 2022, we have decreased our EROA assumption to 6.50% due to the significant increase in 2021 administrative expenses

payable from the pension trust due to higher Pension Benefit Guaranty Corporation (“PBGC”) variable-rate premiums (“VRP”) and

based on our long-term outlook for the capital markets. The higher 2021 PBGC VRP resulted in a 25-basis point lower rate of return

compared to 2020. The historical annual return on our U.S. Pension Plan assets, calculated on a compound geometric basis, was 7.9%,

net of all fees and expenses, for the 15-year period ended May 31, 2021. For our U.S. Pension Plans, a one-basis-point change in our

EROA would impact our 2022 pension expense by $3 million.

FUNDED STATUS. The following is information concerning the funded status of our pension plans as of May 31 on a financial
FUNDED STATUS. The following is information concerning the funded status of our pension plans as of May 31 on a financial
reporting basis (in millions):
reporting basis (in millions):

Funded Status of Plans:
Funded Status of Plans:
Projected benefit obligation (PBO)
Projected benefit obligation (PBO)
Fair value of plan assets
Fair value of plan assets
Funded status of the plans
Funded status of the plans
Cash Amounts:
Cash Amounts:
Cash contributions during the year
Cash contributions during the year
Benefit payments during the year
Benefit payments during the year

2021
2021

2020
2020

$
$

$
$
$
$

34,034 $
34,034 $
31,918
31,918
(2,116 ) $
(2,116 ) $

461 $
461 $
1,001 $
1,001 $

32,441
32,441
28,691
28,691
(3,750 )
(3,750 )

1,154
1,154
981
981

FUNDING. The funding requirements for our U.S. Pension Plans are governed by the Pension Protection Act of 2006, which has
FUNDING. The funding requirements for our U.S. Pension Plans are governed by the Pension Protection Act of 2006, which has
aggressive funding requirements in order to avoid benefit payment restrictions that become effective if the funded status determined
aggressive funding requirements in order to avoid benefit payment restrictions that become effective if the funded status determined
under IRS rules falls below 80% at the beginning of a plan year. All of our U.S. Pension Plans have funded status levels in excess of
under IRS rules falls below 80% at the beginning of a plan year. All of our U.S. Pension Plans have funded status levels in excess of
80% and our plans are fully funded under the Employee Retirement Income Security Act (“ERISA”). Additionally, current benefit
80% and our plans are fully funded under the Employee Retirement Income Security Act (“ERISA”). Additionally, current benefit
payments do not materially impact our total plan assets (benefit payments for our U.S. Pension Plans for 2021 were approximately
payments do not materially impact our total plan assets (benefit payments for our U.S. Pension Plans for 2021 were approximately
$929 million, or 3.1% of plan assets).
$929 million, or 3.1% of plan assets).

Over the past several years, we have made voluntary contributions to our U.S. Pension Plans in excess of the minimum required
Over the past several years, we have made voluntary contributions to our U.S. Pension Plans in excess of the minimum required
contributions. For 2022, no pension contributions are required for our U.S. Pension Plans as they are fully funded under ERISA.
contributions. For 2022, no pension contributions are required for our U.S. Pension Plans as they are fully funded under ERISA.
However, we expect to make voluntary contributions of $500 million to these plans in 2022.
However, we expect to make voluntary contributions of $500 million to these plans in 2022.

See Note 14 of the accompanying consolidated financial statements for further information about our retirement plans.
See Note 14 of the accompanying consolidated financial statements for further information about our retirement plans.

INCOME TAXES
INCOME TAXES

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our income taxes are a function of our income,
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Our income taxes are a function of our income,
statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. The tax laws in the
statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. The tax laws in the
various jurisdictions are complex and subject to different interpretations by us and the respective governmental taxing authorities. As a
various jurisdictions are complex and subject to different interpretations by us and the respective governmental taxing authorities. As a
result, significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating
result, significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating
uncertainties. Also, our effective tax rate is significantly affected by the earnings generated in each jurisdiction, so unexpected
uncertainties. Also, our effective tax rate is significantly affected by the earnings generated in each jurisdiction, so unexpected
fluctuations in the geographic mix of earnings could significantly impact our tax rate. Our intercompany transactions are based on
fluctuations in the geographic mix of earnings could significantly impact our tax rate. Our intercompany transactions are based on
globally accepted transfer pricing principles, which align profits with the business operations and functions of the various legal entities
globally accepted transfer pricing principles, which align profits with the business operations and functions of the various legal entities
in our international business.
in our international business.

We evaluate our tax positions quarterly and adjust the balances as new information becomes available. These evaluations are based on
We evaluate our tax positions quarterly and adjust the balances as new information becomes available. These evaluations are based on
factors including, but not limited to, changes in facts or circumstances, changes in tax laws or their interpretations, audit activity and
factors including, but not limited to, changes in facts or circumstances, changes in tax laws or their interpretations, audit activity and
changes in our business. In addition, management considers the advice of third parties in making conclusions regarding tax
changes in our business. In addition, management considers the advice of third parties in making conclusions regarding tax
consequences.
consequences.

Tax contingencies arise from uncertainty in the application of tax rules throughout the many jurisdictions in which we operate. Despite
Tax contingencies arise from uncertainty in the application of tax rules throughout the many jurisdictions in which we operate. Despite
our belief that our tax return positions are consistent with applicable tax laws, taxing authorities could challenge certain positions. We
our belief that our tax return positions are consistent with applicable tax laws, taxing authorities could challenge certain positions. We
record tax benefits for uncertain tax positions based upon management’s evaluation of the information available at the reporting date.
record tax benefits for uncertain tax positions based upon management’s evaluation of the information available at the reporting date.
To be recognized in the financial statements, a tax benefit must be at least more likely than not of being sustained based on the
To be recognized in the financial statements, a tax benefit must be at least more likely than not of being sustained based on the
technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more likely than not of
technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more likely than not of
being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Significant
being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Significant
judgment is required in making these determinations and adjustments to unrecognized tax benefits may be necessary to reflect actual
judgment is required in making these determinations and adjustments to unrecognized tax benefits may be necessary to reflect actual
taxes payable upon settlement.
taxes payable upon settlement.

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets
Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets
arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net
arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net
operating loss and tax credit carryforwards. We evaluate the recoverability of these future tax deductions and credits by assessing the
operating loss and tax credit carryforwards. We evaluate the recoverability of these future tax deductions and credits by assessing the
adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating
adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating
earnings and available tax planning strategies. These sources of income rely heavily on estimates to make this determination so there
earnings and available tax planning strategies. These sources of income rely heavily on estimates to make this determination so there
is a risk that these estimates will have to be revised as new information is received. To the extent we do not consider it more likely
is a risk that these estimates will have to be revised as new information is received. To the extent we do not consider it more likely
than not that a deferred tax asset will be recovered, a valuation allowance is established. We believe we will generate sufficient future
than not that a deferred tax asset will be recovered, a valuation allowance is established. We believe we will generate sufficient future
taxable income to realize the tax benefits related to the remaining net deferred tax assets in our consolidated balance sheets that are not
taxable income to realize the tax benefits related to the remaining net deferred tax assets in our consolidated balance sheets that are not
subject to valuation allowances. We record the taxes for global intangible low-taxed income as a period cost.
subject to valuation allowances. We record the taxes for global intangible low-taxed income as a period cost.

- 68 -

- 69 -
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Our income tax positions are based on currently enacted tax laws, including the TCJA and the CARES Act. As further guidance is
Our income tax positions are based on currently enacted tax laws, including the TCJA and the CARES Act. As further guidance is
issued by the U.S. Treasury Department, the IRS and other standard-setting bodies, any resulting changes to our estimates will be
issued by the U.S. Treasury Department, the IRS and other standard-setting bodies, any resulting changes to our estimates will be
treated in accordance with the relevant accounting guidance.
treated in accordance with the relevant accounting guidance.

For more information, including impacts from the TCJA and the CARES Act, see the “Income Taxes” section of this MD&A and
For more information, including impacts from the TCJA and the CARES Act, see the “Income Taxes” section of this MD&A and
Note 13 of the accompanying consolidated financial statements.
Note 13 of the accompanying consolidated financial statements.

SELF-INSURANCE ACCRUALS
SELF-INSURANCE ACCRUALS

We are self-insured up to certain limits for costs associated with workers’ compensation claims, vehicle accidents, property and cargo
We are self-insured up to certain limits for costs associated with workers’ compensation claims, vehicle accidents, property and cargo
loss, general business liabilities and benefits paid under employee healthcare and disability programs. Our reserves are established for
loss, general business liabilities and benefits paid under employee healthcare and disability programs. Our reserves are established for
estimates of loss on all incurred claims, including incurred-but-not-reported claims. Self-insurance accruals reflected in our balance
estimates of loss on all incurred claims, including incurred-but-not-reported claims. Self-insurance accruals reflected in our balance
sheet were $4.0 billion at May 31, 2021 and $3.3 billion at May 31, 2020. Approximately 39% of these accruals were classified as
sheet were $4.0 billion at May 31, 2021 and $3.3 billion at May 31, 2020. Approximately 39% of these accruals were classified as
current liabilities.
current liabilities.

Our self-insurance accruals are primarily based on the actuarially estimated cost of claims incurred as of the balance sheet date. These
Our self-insurance accruals are primarily based on the actuarially estimated cost of claims incurred as of the balance sheet date. These
estimates include consideration of factors such as severity of claims, frequency and volume of claims, healthcare inflation, seasonality
estimates include consideration of factors such as severity of claims, frequency and volume of claims, healthcare inflation, seasonality
and plan designs. Cost trends on material accruals are updated each quarter. We self-insure up to certain limits that vary by type of
and plan designs. Cost trends on material accruals are updated each quarter. We self-insure up to certain limits that vary by type of
risk. Periodically, we evaluate the level of insurance coverage and adjust insurance levels based on risk tolerance and premium
risk. Periodically, we evaluate the level of insurance coverage and adjust insurance levels based on risk tolerance and premium
expense.
expense.

We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these highly
We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these highly
judgmental accruals. However, the use of any estimation technique in this area is inherently sensitive given the magnitude of claims
judgmental accruals. However, the use of any estimation technique in this area is inherently sensitive given the magnitude of claims
involved and the length of time until the ultimate cost is known. We believe our recorded obligations for these expenses are
involved and the length of time until the ultimate cost is known. We believe our recorded obligations for these expenses are
consistently measured on a conservative basis. Nevertheless, changes in healthcare costs, accident frequency and severity, insurance
consistently measured on a conservative basis. Nevertheless, changes in healthcare costs, accident frequency and severity, insurance
retention levels and other factors can materially affect the estimates for these liabilities.
retention levels and other factors can materially affect the estimates for these liabilities.

LONG-LIVED ASSETS
LONG-LIVED ASSETS

USEFUL LIVES AND SALVAGE VALUES. Our business is capital intensive, with approximately 53% of our owned assets invested in
USEFUL LIVES AND SALVAGE VALUES. Our business is capital intensive, with approximately 53% of our owned assets invested in
our transportation and information system infrastructures.
our transportation and information system infrastructures.

The depreciation or amortization of our capital assets over their estimated useful lives, and the determination of any salvage values,
The depreciation or amortization of our capital assets over their estimated useful lives, and the determination of any salvage values,
requires management to make judgments about future events. Because we utilize many of our capital assets over relatively long
requires management to make judgments about future events. Because we utilize many of our capital assets over relatively long
periods (the majority of aircraft costs are depreciated over 15 to 30 years), we periodically evaluate whether adjustments to our
periods (the majority of aircraft costs are depreciated over 15 to 30 years), we periodically evaluate whether adjustments to our
estimated service lives or salvage values are necessary to ensure these estimates properly match the economic use of the asset. This
estimated service lives or salvage values are necessary to ensure these estimates properly match the economic use of the asset. This
evaluation may result in changes in the estimated lives and residual values used to depreciate our aircraft and other equipment. For our
evaluation may result in changes in the estimated lives and residual values used to depreciate our aircraft and other equipment. For our
aircraft, we typically assign no residual value due to the utilization of these assets in cargo configuration, which results in little to no
aircraft, we typically assign no residual value due to the utilization of these assets in cargo configuration, which results in little to no
value at the end of their useful life. These estimates affect the amount of depreciation expense recognized in a period and, ultimately,
value at the end of their useful life. These estimates affect the amount of depreciation expense recognized in a period and, ultimately,
the gain or loss on the disposal of the asset. Changes in the estimated lives of assets will result in an increase or decrease in the amount
the gain or loss on the disposal of the asset. Changes in the estimated lives of assets will result in an increase or decrease in the amount
of depreciation recognized in future periods and could have a material impact on our results of operations (as described below).
of depreciation recognized in future periods and could have a material impact on our results of operations (as described below).
Historically, gains and losses on disposals of operating equipment have not been material. However, such amounts may differ
Historically, gains and losses on disposals of operating equipment have not been material. However, such amounts may differ
materially in the future due to changes in business levels, technological obsolescence, accident frequency, regulatory changes and
materially in the future due to changes in business levels, technological obsolescence, accident frequency, regulatory changes and
other factors beyond our control.
other factors beyond our control.

IMPAIRMENT. As of May 31, 2021, the FedEx Express global air network included a fleet of 684 aircraft (including approximately
IMPAIRMENT. As of May 31, 2021, the FedEx Express global air network included a fleet of 684 aircraft (including approximately
300 supplemental aircraft) that provide delivery of packages and freight to more than 220 countries and territories through a wide
300 supplemental aircraft) that provide delivery of packages and freight to more than 220 countries and territories through a wide
range of U.S. and international shipping services. While certain aircraft are utilized in primary geographic areas (U.S. versus
range of U.S. and international shipping services. While certain aircraft are utilized in primary geographic areas (U.S. versus
international), we operate an integrated global network, and utilize our aircraft and other modes of transportation to achieve the lowest
international), we operate an integrated global network, and utilize our aircraft and other modes of transportation to achieve the lowest
cost of delivery while maintaining our service commitments to our customers. Because of the integrated nature of our global network,
cost of delivery while maintaining our service commitments to our customers. Because of the integrated nature of our global network,
our aircraft are interchangeable across routes and geographies, giving us flexibility with our fleet planning to meet changing global
our aircraft are interchangeable across routes and geographies, giving us flexibility with our fleet planning to meet changing global
economic conditions and maintain and modify aircraft as needed.
economic conditions and maintain and modify aircraft as needed.

Because of the lengthy lead times for aircraft manufacture and modifications, we must anticipate volume levels and plan our fleet
Because of the lengthy lead times for aircraft manufacture and modifications, we must anticipate volume levels and plan our fleet
requirements years in advance, and make commitments for aircraft based on those projections. Furthermore, the timing and
requirements years in advance, and make commitments for aircraft based on those projections. Furthermore, the timing and
availability of certain used aircraft types (particularly those with better fuel efficiency) may create limited opportunities to acquire
availability of certain used aircraft types (particularly those with better fuel efficiency) may create limited opportunities to acquire
these aircraft at favorable prices in advance of our capacity needs. These activities create risks that asset capacity may exceed demand.
these aircraft at favorable prices in advance of our capacity needs. These activities create risks that asset capacity may exceed demand.
At May 31, 2021, we had three purchased aircraft that were not yet placed into service.
At May 31, 2021, we had three purchased aircraft that were not yet placed into service.

The accounting test for whether an asset held for use is impaired involves first comparing the carrying value of the asset with its

estimated future undiscounted cash flows. If the cash flows do not exceed the carrying value, the asset must be adjusted to its current

fair value. We operate integrated transportation networks, and accordingly, cash flows for most of our operating assets are assessed at

a network level, not at an individual asset level for our analysis of impairment. Further, decisions about capital investments are

evaluated based on the impact to the overall network rather than the return on an individual asset. We make decisions to remove

certain long-lived assets from service based on projections of reduced capacity needs or lower operating costs of newer aircraft types,

and those decisions may result in an impairment charge. Assets held for disposal must be adjusted to their estimated fair values less

costs to sell when the decision is made to dispose of the asset and certain other criteria are met. The fair value determinations for such

aircraft may require management estimates, as there may not be active markets for some of these aircraft. Such estimates are subject to

revision from period to period.

In the normal management of our aircraft fleet, we routinely idle aircraft and engines temporarily due to maintenance cycles and

adjustments of our network capacity to match seasonality and overall customer demand levels. Temporarily idled assets are classified

as available-for-use, and we continue to record depreciation expense associated with these assets. These temporarily idled assets are

assessed for impairment and remaining life on a quarterly basis. The criteria for determining whether an asset has been permanently

removed from service (and, as a result, is potentially impaired) include, but are not limited to, our global economic outlook and the

impact of our outlook on our current and projected volume levels, including capacity needs during our peak shipping seasons; the

introduction of new fleet types or decisions to permanently retire an aircraft fleet from operations; and changes to planned service

expansion activities. At May 31, 2021, we had nine aircraft temporarily idled. These aircraft have been idled for an average of 17

months and are expected to return to revenue service in order to meet expected demand.

During 2020, we made the decision to permanently retire from service 10 Airbus A310-300 aircraft and 12 related engines at FedEx

Express to align with the needs of the U.S. domestic network and modernize its aircraft fleet. As a consequence of this decision, we

recognized noncash impairment charges of $66 million ($50 million, net of tax, or $0.19 per diluted share) in the FedEx Express

segment in 2020.

LEASES. We utilize operating leases to finance certain of our aircraft, facilities and equipment. Such arrangements typically shift the

risk of loss on the residual value of the assets at the end of the lease period to the lessor. In accordance with the new lease accounting

standard adopted June 1, 2019, we had approximately $16 billion in operating lease liabilities and approximately $15 billion related

right-of-use assets on the balance sheet as of May 31, 2021. The weighted-average remaining lease term of all operating leases

outstanding at May 31, 2021 was approximately 10 years.

Our leases generally contain options to extend or terminate the lease. We reevaluate our leases on a regular basis to consider the

economic and strategic incentives of exercising the renewal options, and how they align with our operating strategy. Therefore,

substantially all the renewal option periods are not included within the lease term and the associated payments are not included in the

measurement of the right-of-use asset and lease liability as the options to extend are not reasonably certain at lease commencement.

Short-term leases with an initial term of 12 months or less are not recognized in the right-to-use asset and lease liability on the

consolidated balance sheets.

The lease liabilities are measured at the lease commencement date and determined using the present value of the minimum lease

payments not yet paid and our incremental borrowing rate, which approximates the rate at which we would borrow, on a collateralized

basis, over the term of a lease in the applicable currency environment. The interest rate implicit in the lease is generally not

determinable in transactions where we are the lessee.

The determination of whether a lease is accounted for as a finance lease or an operating lease requires management to make estimates

primarily about the fair value of the asset and its estimated economic useful life. In addition, our evaluation includes ensuring we

properly account for build-to-suit lease arrangements and making judgments about whether various forms of lessee involvement

during the construction period allow the lessee to control the underlying leased asset during the construction period. We believe we

have well-defined and controlled processes for making these evaluations, including obtaining third-party appraisals for material

transactions to assist us in making these evaluations.

GOODWILL. We had $7.0 billion of recorded goodwill at May 31, 2021 and $6.4 billion of recorded goodwill at May 31, 2020 from

our business acquisitions, representing the excess of the purchase price over the fair value of the net assets acquired. Several factors

give rise to goodwill in our acquisitions, such as the expected benefits from synergies of the combination and the existing workforce

of the acquired business.

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Our income tax positions are based on currently enacted tax laws, including the TCJA and the CARES Act. As further guidance is

issued by the U.S. Treasury Department, the IRS and other standard-setting bodies, any resulting changes to our estimates will be

treated in accordance with the relevant accounting guidance.

For more information, including impacts from the TCJA and the CARES Act, see the “Income Taxes” section of this MD&A and

Note 13 of the accompanying consolidated financial statements.

SELF-INSURANCE ACCRUALS

We are self-insured up to certain limits for costs associated with workers’ compensation claims, vehicle accidents, property and cargo

loss, general business liabilities and benefits paid under employee healthcare and disability programs. Our reserves are established for

estimates of loss on all incurred claims, including incurred-but-not-reported claims. Self-insurance accruals reflected in our balance

sheet were $4.0 billion at May 31, 2021 and $3.3 billion at May 31, 2020. Approximately 39% of these accruals were classified as

current liabilities.

expense.

Our self-insurance accruals are primarily based on the actuarially estimated cost of claims incurred as of the balance sheet date. These

estimates include consideration of factors such as severity of claims, frequency and volume of claims, healthcare inflation, seasonality

and plan designs. Cost trends on material accruals are updated each quarter. We self-insure up to certain limits that vary by type of

risk. Periodically, we evaluate the level of insurance coverage and adjust insurance levels based on risk tolerance and premium

We believe the use of actuarial methods to account for these liabilities provides a consistent and effective way to measure these highly

judgmental accruals. However, the use of any estimation technique in this area is inherently sensitive given the magnitude of claims

involved and the length of time until the ultimate cost is known. We believe our recorded obligations for these expenses are

consistently measured on a conservative basis. Nevertheless, changes in healthcare costs, accident frequency and severity, insurance

retention levels and other factors can materially affect the estimates for these liabilities.

LONG-LIVED ASSETS

USEFUL LIVES AND SALVAGE VALUES. Our business is capital intensive, with approximately 53% of our owned assets invested in

our transportation and information system infrastructures.

The depreciation or amortization of our capital assets over their estimated useful lives, and the determination of any salvage values,

requires management to make judgments about future events. Because we utilize many of our capital assets over relatively long

periods (the majority of aircraft costs are depreciated over 15 to 30 years), we periodically evaluate whether adjustments to our

estimated service lives or salvage values are necessary to ensure these estimates properly match the economic use of the asset. This

evaluation may result in changes in the estimated lives and residual values used to depreciate our aircraft and other equipment. For our

aircraft, we typically assign no residual value due to the utilization of these assets in cargo configuration, which results in little to no

value at the end of their useful life. These estimates affect the amount of depreciation expense recognized in a period and, ultimately,

the gain or loss on the disposal of the asset. Changes in the estimated lives of assets will result in an increase or decrease in the amount

of depreciation recognized in future periods and could have a material impact on our results of operations (as described below).

Historically, gains and losses on disposals of operating equipment have not been material. However, such amounts may differ

materially in the future due to changes in business levels, technological obsolescence, accident frequency, regulatory changes and

other factors beyond our control.

IMPAIRMENT. As of May 31, 2021, the FedEx Express global air network included a fleet of 684 aircraft (including approximately

300 supplemental aircraft) that provide delivery of packages and freight to more than 220 countries and territories through a wide

range of U.S. and international shipping services. While certain aircraft are utilized in primary geographic areas (U.S. versus

international), we operate an integrated global network, and utilize our aircraft and other modes of transportation to achieve the lowest

cost of delivery while maintaining our service commitments to our customers. Because of the integrated nature of our global network,

our aircraft are interchangeable across routes and geographies, giving us flexibility with our fleet planning to meet changing global

economic conditions and maintain and modify aircraft as needed.

Because of the lengthy lead times for aircraft manufacture and modifications, we must anticipate volume levels and plan our fleet

requirements years in advance, and make commitments for aircraft based on those projections. Furthermore, the timing and

availability of certain used aircraft types (particularly those with better fuel efficiency) may create limited opportunities to acquire

these aircraft at favorable prices in advance of our capacity needs. These activities create risks that asset capacity may exceed demand.

At May 31, 2021, we had three purchased aircraft that were not yet placed into service.

The accounting test for whether an asset held for use is impaired involves first comparing the carrying value of the asset with its
The accounting test for whether an asset held for use is impaired involves first comparing the carrying value of the asset with its
estimated future undiscounted cash flows. If the cash flows do not exceed the carrying value, the asset must be adjusted to its current
estimated future undiscounted cash flows. If the cash flows do not exceed the carrying value, the asset must be adjusted to its current
fair value. We operate integrated transportation networks, and accordingly, cash flows for most of our operating assets are assessed at
fair value. We operate integrated transportation networks, and accordingly, cash flows for most of our operating assets are assessed at
a network level, not at an individual asset level for our analysis of impairment. Further, decisions about capital investments are
a network level, not at an individual asset level for our analysis of impairment. Further, decisions about capital investments are
evaluated based on the impact to the overall network rather than the return on an individual asset. We make decisions to remove
evaluated based on the impact to the overall network rather than the return on an individual asset. We make decisions to remove
certain long-lived assets from service based on projections of reduced capacity needs or lower operating costs of newer aircraft types,
certain long-lived assets from service based on projections of reduced capacity needs or lower operating costs of newer aircraft types,
and those decisions may result in an impairment charge. Assets held for disposal must be adjusted to their estimated fair values less
and those decisions may result in an impairment charge. Assets held for disposal must be adjusted to their estimated fair values less
costs to sell when the decision is made to dispose of the asset and certain other criteria are met. The fair value determinations for such
costs to sell when the decision is made to dispose of the asset and certain other criteria are met. The fair value determinations for such
aircraft may require management estimates, as there may not be active markets for some of these aircraft. Such estimates are subject to
aircraft may require management estimates, as there may not be active markets for some of these aircraft. Such estimates are subject to
revision from period to period.
revision from period to period.

In the normal management of our aircraft fleet, we routinely idle aircraft and engines temporarily due to maintenance cycles and
In the normal management of our aircraft fleet, we routinely idle aircraft and engines temporarily due to maintenance cycles and
adjustments of our network capacity to match seasonality and overall customer demand levels. Temporarily idled assets are classified
adjustments of our network capacity to match seasonality and overall customer demand levels. Temporarily idled assets are classified
as available-for-use, and we continue to record depreciation expense associated with these assets. These temporarily idled assets are
as available-for-use, and we continue to record depreciation expense associated with these assets. These temporarily idled assets are
assessed for impairment and remaining life on a quarterly basis. The criteria for determining whether an asset has been permanently
assessed for impairment and remaining life on a quarterly basis. The criteria for determining whether an asset has been permanently
removed from service (and, as a result, is potentially impaired) include, but are not limited to, our global economic outlook and the
removed from service (and, as a result, is potentially impaired) include, but are not limited to, our global economic outlook and the
impact of our outlook on our current and projected volume levels, including capacity needs during our peak shipping seasons; the
impact of our outlook on our current and projected volume levels, including capacity needs during our peak shipping seasons; the
introduction of new fleet types or decisions to permanently retire an aircraft fleet from operations; and changes to planned service
introduction of new fleet types or decisions to permanently retire an aircraft fleet from operations; and changes to planned service
expansion activities. At May 31, 2021, we had nine aircraft temporarily idled. These aircraft have been idled for an average of 17
expansion activities. At May 31, 2021, we had nine aircraft temporarily idled. These aircraft have been idled for an average of 17
months and are expected to return to revenue service in order to meet expected demand.
months and are expected to return to revenue service in order to meet expected demand.

During 2020, we made the decision to permanently retire from service 10 Airbus A310-300 aircraft and 12 related engines at FedEx
During 2020, we made the decision to permanently retire from service 10 Airbus A310-300 aircraft and 12 related engines at FedEx
Express to align with the needs of the U.S. domestic network and modernize its aircraft fleet. As a consequence of this decision, we
Express to align with the needs of the U.S. domestic network and modernize its aircraft fleet. As a consequence of this decision, we
recognized noncash impairment charges of $66 million ($50 million, net of tax, or $0.19 per diluted share) in the FedEx Express
recognized noncash impairment charges of $66 million ($50 million, net of tax, or $0.19 per diluted share) in the FedEx Express
segment in 2020.
segment in 2020.

LEASES. We utilize operating leases to finance certain of our aircraft, facilities and equipment. Such arrangements typically shift the
LEASES. We utilize operating leases to finance certain of our aircraft, facilities and equipment. Such arrangements typically shift the
risk of loss on the residual value of the assets at the end of the lease period to the lessor. In accordance with the new lease accounting
risk of loss on the residual value of the assets at the end of the lease period to the lessor. In accordance with the new lease accounting
standard adopted June 1, 2019, we had approximately $16 billion in operating lease liabilities and approximately $15 billion related
standard adopted June 1, 2019, we had approximately $16 billion in operating lease liabilities and approximately $15 billion related
right-of-use assets on the balance sheet as of May 31, 2021. The weighted-average remaining lease term of all operating leases
right-of-use assets on the balance sheet as of May 31, 2021. The weighted-average remaining lease term of all operating leases
outstanding at May 31, 2021 was approximately 10 years.
outstanding at May 31, 2021 was approximately 10 years.

Our leases generally contain options to extend or terminate the lease. We reevaluate our leases on a regular basis to consider the
Our leases generally contain options to extend or terminate the lease. We reevaluate our leases on a regular basis to consider the
economic and strategic incentives of exercising the renewal options, and how they align with our operating strategy. Therefore,
economic and strategic incentives of exercising the renewal options, and how they align with our operating strategy. Therefore,
substantially all the renewal option periods are not included within the lease term and the associated payments are not included in the
substantially all the renewal option periods are not included within the lease term and the associated payments are not included in the
measurement of the right-of-use asset and lease liability as the options to extend are not reasonably certain at lease commencement.
measurement of the right-of-use asset and lease liability as the options to extend are not reasonably certain at lease commencement.
Short-term leases with an initial term of 12 months or less are not recognized in the right-to-use asset and lease liability on the
Short-term leases with an initial term of 12 months or less are not recognized in the right-to-use asset and lease liability on the
consolidated balance sheets.
consolidated balance sheets.

The lease liabilities are measured at the lease commencement date and determined using the present value of the minimum lease
The lease liabilities are measured at the lease commencement date and determined using the present value of the minimum lease
payments not yet paid and our incremental borrowing rate, which approximates the rate at which we would borrow, on a collateralized
payments not yet paid and our incremental borrowing rate, which approximates the rate at which we would borrow, on a collateralized
basis, over the term of a lease in the applicable currency environment. The interest rate implicit in the lease is generally not
basis, over the term of a lease in the applicable currency environment. The interest rate implicit in the lease is generally not
determinable in transactions where we are the lessee.
determinable in transactions where we are the lessee.

The determination of whether a lease is accounted for as a finance lease or an operating lease requires management to make estimates
The determination of whether a lease is accounted for as a finance lease or an operating lease requires management to make estimates
primarily about the fair value of the asset and its estimated economic useful life. In addition, our evaluation includes ensuring we
primarily about the fair value of the asset and its estimated economic useful life. In addition, our evaluation includes ensuring we
properly account for build-to-suit lease arrangements and making judgments about whether various forms of lessee involvement
properly account for build-to-suit lease arrangements and making judgments about whether various forms of lessee involvement
during the construction period allow the lessee to control the underlying leased asset during the construction period. We believe we
during the construction period allow the lessee to control the underlying leased asset during the construction period. We believe we
have well-defined and controlled processes for making these evaluations, including obtaining third-party appraisals for material
have well-defined and controlled processes for making these evaluations, including obtaining third-party appraisals for material
transactions to assist us in making these evaluations.
transactions to assist us in making these evaluations.

GOODWILL. We had $7.0 billion of recorded goodwill at May 31, 2021 and $6.4 billion of recorded goodwill at May 31, 2020 from
GOODWILL. We had $7.0 billion of recorded goodwill at May 31, 2021 and $6.4 billion of recorded goodwill at May 31, 2020 from
our business acquisitions, representing the excess of the purchase price over the fair value of the net assets acquired. Several factors
our business acquisitions, representing the excess of the purchase price over the fair value of the net assets acquired. Several factors
give rise to goodwill in our acquisitions, such as the expected benefits from synergies of the combination and the existing workforce
give rise to goodwill in our acquisitions, such as the expected benefits from synergies of the combination and the existing workforce
of the acquired business.
of the acquired business.

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Goodwill is reviewed at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative assessment
Goodwill is reviewed at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative assessment
that requires management judgment and the use of estimates to determine if it is more likely than not that the fair value of a reporting
that requires management judgment and the use of estimates to determine if it is more likely than not that the fair value of a reporting
unit is less than its carrying amount. An entity has an unconditional option to bypass the qualitative assessment for any reporting unit
unit is less than its carrying amount. An entity has an unconditional option to bypass the qualitative assessment for any reporting unit
and proceed directly to performing the quantitative goodwill impairment test. An entity may resume performing the qualitative
and proceed directly to performing the quantitative goodwill impairment test. An entity may resume performing the qualitative
assessment in any subsequent period. We performed both qualitative and quantitative assessments of goodwill in the fourth quarter of
assessment in any subsequent period. We performed both qualitative and quantitative assessments of goodwill in the fourth quarter of
2021 and 2020. This included comparing the fair value of the reporting unit to its carrying value (including attributable goodwill). Fair
2021 and 2020. This included comparing the fair value of the reporting unit to its carrying value (including attributable goodwill). Fair
value is estimated using standard valuation methodologies (principally the income or market approach classified as Level 3 within the
value is estimated using standard valuation methodologies (principally the income or market approach classified as Level 3 within the
fair value hierarchy) incorporating market participant considerations and management’s assumptions on revenue growth rates,
fair value hierarchy) incorporating market participant considerations and management’s assumptions on revenue growth rates,
operating margins, discount rates and expected capital expenditures. Estimates used by management can significantly affect the
operating margins, discount rates and expected capital expenditures. Estimates used by management can significantly affect the
outcome of the impairment test. Changes in forecasted operating results and other assumptions could materially affect these estimates.
outcome of the impairment test. Changes in forecasted operating results and other assumptions could materially affect these estimates.

Our reporting units with significant recorded goodwill include FedEx Express, FedEx Ground and FedEx Freight. We evaluated these
Our reporting units with significant recorded goodwill include FedEx Express, FedEx Ground and FedEx Freight. We evaluated these
reporting units during the fourth quarters of 2021 and 2020 and the estimated fair value of each of these reporting units exceeded their
reporting units during the fourth quarters of 2021 and 2020 and the estimated fair value of each of these reporting units exceeded their
carrying values as of the end of 2021 and 2020; therefore, we do not believe that any of these reporting units were impaired as of the
carrying values as of the end of 2021 and 2020; therefore, we do not believe that any of these reporting units were impaired as of the
balance sheet dates.
balance sheet dates.

In connection with our annual impairment testing of goodwill conducted in the fourth quarter of 2020, we recorded impairment
In connection with our annual impairment testing of goodwill conducted in the fourth quarter of 2020, we recorded impairment
charges of $358 million predominantly attributable to our FedEx Office reporting unit. The COVID-19 pandemic resulted in store
charges of $358 million predominantly attributable to our FedEx Office reporting unit. The COVID-19 pandemic resulted in store
closures and declining print revenue at FedEx Office during the fourth quarter of 2020, which negatively impacted its near-term
closures and declining print revenue at FedEx Office during the fourth quarter of 2020, which negatively impacted its near-term
operating performance. Based on these factors, our outlook for the FedEx Office business and retail industry changed in the fourth
operating performance. Based on these factors, our outlook for the FedEx Office business and retail industry changed in the fourth
quarter of 2020.
quarter of 2020.

LEGAL AND OTHER CONTINGENCIES
LEGAL AND OTHER CONTINGENCIES

We are subject to various loss contingencies in connection with our operations. Contingent liabilities are difficult to measure, as their
We are subject to various loss contingencies in connection with our operations. Contingent liabilities are difficult to measure, as their
measurement is subject to multiple factors that are not easily predicted or projected. Further, additional complexity in measuring these
measurement is subject to multiple factors that are not easily predicted or projected. Further, additional complexity in measuring these
liabilities arises due to the various jurisdictions in which these matters occur, which makes our ability to predict their outcome highly
liabilities arises due to the various jurisdictions in which these matters occur, which makes our ability to predict their outcome highly
uncertain. Moreover, different accounting rules must be employed to account for these items based on the nature of the contingency.
uncertain. Moreover, different accounting rules must be employed to account for these items based on the nature of the contingency.
Accordingly, significant management judgment is required to assess these matters and to make determinations about the measurement
Accordingly, significant management judgment is required to assess these matters and to make determinations about the measurement
of a liability, if any. Certain pending loss contingencies are described in Note 19 of the accompanying consolidated financial
of a liability, if any. Certain pending loss contingencies are described in Note 19 of the accompanying consolidated financial
statements. In the opinion of management, the aggregate liability, if any, of individual matters or groups of related matters not
statements. In the opinion of management, the aggregate liability, if any, of individual matters or groups of related matters not
specifically described in Note 19 is not expected to be material to our financial position, results of operations or cash flows. The
specifically described in Note 19 is not expected to be material to our financial position, results of operations or cash flows. The
following describes our methods and associated processes for evaluating these matters.
following describes our methods and associated processes for evaluating these matters.

Because of the complex environment in which we operate, we are subject to numerous legal proceedings and claims, including those
Because of the complex environment in which we operate, we are subject to numerous legal proceedings and claims, including those
relating to general commercial matters, governmental enforcement actions, employment-related claims and FedEx Ground’s service
relating to general commercial matters, governmental enforcement actions, employment-related claims and FedEx Ground’s service
providers. Accounting guidance for contingencies requires an accrual of estimated loss from a contingency, such as a non-income tax
providers. Accounting guidance for contingencies requires an accrual of estimated loss from a contingency, such as a non-income tax
or other legal proceeding or claim, when it is probable (i.e., the future event or events are likely to occur) that a loss has been incurred
or other legal proceeding or claim, when it is probable (i.e., the future event or events are likely to occur) that a loss has been incurred
and the amount of the loss can be reasonably estimated. This guidance also requires disclosure of a loss contingency matter when, in
and the amount of the loss can be reasonably estimated. This guidance also requires disclosure of a loss contingency matter when, in
management’s judgment, a material loss is reasonably possible or probable.
management’s judgment, a material loss is reasonably possible or probable.

During the preparation of our financial statements, we evaluate our contingencies to determine whether it is probable, reasonably
During the preparation of our financial statements, we evaluate our contingencies to determine whether it is probable, reasonably
possible or remote that a liability has been incurred. A loss is recognized for all contingencies deemed probable and estimable,
possible or remote that a liability has been incurred. A loss is recognized for all contingencies deemed probable and estimable,
regardless of amount. For unresolved contingencies with potentially material exposure that are deemed reasonably possible, we
regardless of amount. For unresolved contingencies with potentially material exposure that are deemed reasonably possible, we
evaluate whether a potential loss or range of loss can be reasonably estimated.
evaluate whether a potential loss or range of loss can be reasonably estimated.

Our evaluation of these matters is the result of a comprehensive process designed to ensure that accounting recognition of a loss or
Our evaluation of these matters is the result of a comprehensive process designed to ensure that accounting recognition of a loss or
disclosure of these contingencies is made in a timely manner and involves our legal and accounting personnel, as well as external
disclosure of these contingencies is made in a timely manner and involves our legal and accounting personnel, as well as external
counsel where applicable. The process includes regular communications during each quarter and scheduled meetings shortly before
counsel where applicable. The process includes regular communications during each quarter and scheduled meetings shortly before
the completion of our financial statements to evaluate any new legal proceedings and the status of existing matters.
the completion of our financial statements to evaluate any new legal proceedings and the status of existing matters.

In determining whether a loss should be accrued or a loss contingency disclosed, we evaluate, among other factors:
In determining whether a loss should be accrued or a loss contingency disclosed, we evaluate, among other factors:

•
•

the current status of each matter within the scope and context of the entire lawsuit or proceeding (e.g., the lengthy and complex
the current status of each matter within the scope and context of the entire lawsuit or proceeding (e.g., the lengthy and complex
nature of class-action matters);
nature of class-action matters);

•
•

the procedural status of each matter;
the procedural status of each matter;

• any opportunities to dispose of a lawsuit on its merits before trial (i.e., motion to dismiss or for summary judgment);
• any opportunities to dispose of a lawsuit on its merits before trial (i.e., motion to dismiss or for summary judgment);

•
•

the amount of time remaining before a trial date;
the amount of time remaining before a trial date;

the status of discovery;

•

the status of settlement, arbitration or mediation proceedings; and

• our judgment regarding the likelihood of success prior to or at trial.

In reaching our conclusions with respect to accrual of a loss or loss contingency disclosure, we take a holistic view of each matter

based on these factors and the information available prior to the issuance of our financial statements. Uncertainty with respect to an

individual factor or combination of these factors may impact our decisions related to accrual or disclosure of a loss contingency,

including a conclusion that we are unable to establish an estimate of possible loss or a meaningful range of possible loss. We update

our disclosures to reflect our most current understanding of the contingencies at the time we issue our financial statements. However,

events may arise that were not anticipated and the outcome of a contingency may result in a loss to us that differs materially from our

previously estimated liability or range of possible loss.

Despite the inherent complexity in the accounting and disclosure of contingencies, we believe that our processes are robust and

thorough and provide a consistent framework for management in evaluating the potential outcome of contingencies for proper

accounting recognition and disclosure.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATES. While we currently have market risk sensitive instruments related to interest rates, we do not have significant

exposure to changing interest rates on our long-term debt. As disclosed in Note 7 to the accompanying consolidated financial

statements, we had outstanding fixed-rate long-term debt (exclusive of finance leases) with an estimated fair value of $23.1 billion at

May 31, 2021 and outstanding fixed- and floating-rate long-term debt (exclusive of finance leases) with an estimated fair value of

$22.8 billion at May 31, 2020. Market risk for long-term debt is estimated as the potential decrease in fair value resulting from a

hypothetical 10% increase in interest rates and amounts to approximately $507 million as of May 31, 2021 and approximately $303

million as of May 31, 2020. The underlying fair values of our long-term debt were estimated based on quoted market prices or on the

current rates offered for debt with similar terms and maturities.

We have interest rate risk with respect to our pension and postretirement benefit obligations. Changes in interest rates impact our

liabilities associated with these retirement plans, as well as the amount of pension and postretirement benefit expense recognized.

Declines in the value of plan assets could diminish the funded status of our pension plans and potentially increase our requirement to

make contributions to the plans. Substantial investment losses on plan assets would also increase net pension expense.

FOREIGN CURRENCY. While we are a global provider of transportation, e-commerce and business services, the majority of our

transactions during the periods presented in this Annual Report are denominated in U.S. dollars. The principal foreign currency

exchange rate risks to which we are exposed are in the euro, Chinese yuan, British pound, Canadian dollar, Australian dollar, Hong

Kong dollar, Mexican peso, Japanese yen and Brazilian real. Historically, our exposure to foreign currency fluctuations is more

significant with respect to our revenue than our expenses, as a significant portion of our expenses are denominated in U.S. dollars,

such as aircraft and fuel expenses. Foreign currency fluctuations had a slightly negative impact on operating income in 2021 and a

slightly positive impact on operating income in 2020. However, favorable foreign currency fluctuations also may have had an

offsetting impact on the price we obtained or the demand for our services, which is not quantifiable. At May 31, 2021, the result of a

uniform 10% strengthening in the value of the dollar relative to the currencies in which our transactions are denominated would result

in an increase in expected operating income of $121 million for 2022. This theoretical calculation assumes that each exchange rate

would change in the same direction relative to the U.S. dollar, which is not consistent with our actual experience in foreign currency

transactions. In addition to the direct effects of changes in exchange rates, fluctuations in exchange rates also affect the volume of

sales or the foreign currency sales price as competitors’ services become more or less attractive. The sensitivity analysis of the effects

of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices.

We maintain derivative financial instruments to manage foreign currency fluctuations related to probable future transactions and cash

flows denominated in currencies other than the currency of the transacting entity which impacts our exposure to foreign currency

exchange risk. These derivatives are not designated as hedges and are accounted for at fair value with any profit or loss recorded in

income, which was immaterial for 2021 and 2020.

COMMODITY. While we have market risk for changes in the price of jet and vehicle fuel, this risk is largely mitigated by our indexed

fuel surcharges. For additional discussion of our indexed fuel surcharges, see the “Results of Operations and Outlook — Consolidated

Results — Fuel” section of “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition.”

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Goodwill is reviewed at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative assessment

that requires management judgment and the use of estimates to determine if it is more likely than not that the fair value of a reporting

unit is less than its carrying amount. An entity has an unconditional option to bypass the qualitative assessment for any reporting unit

and proceed directly to performing the quantitative goodwill impairment test. An entity may resume performing the qualitative

assessment in any subsequent period. We performed both qualitative and quantitative assessments of goodwill in the fourth quarter of

2021 and 2020. This included comparing the fair value of the reporting unit to its carrying value (including attributable goodwill). Fair

value is estimated using standard valuation methodologies (principally the income or market approach classified as Level 3 within the

fair value hierarchy) incorporating market participant considerations and management’s assumptions on revenue growth rates,

operating margins, discount rates and expected capital expenditures. Estimates used by management can significantly affect the

outcome of the impairment test. Changes in forecasted operating results and other assumptions could materially affect these estimates.

Our reporting units with significant recorded goodwill include FedEx Express, FedEx Ground and FedEx Freight. We evaluated these

reporting units during the fourth quarters of 2021 and 2020 and the estimated fair value of each of these reporting units exceeded their

carrying values as of the end of 2021 and 2020; therefore, we do not believe that any of these reporting units were impaired as of the

balance sheet dates.

In connection with our annual impairment testing of goodwill conducted in the fourth quarter of 2020, we recorded impairment

charges of $358 million predominantly attributable to our FedEx Office reporting unit. The COVID-19 pandemic resulted in store

closures and declining print revenue at FedEx Office during the fourth quarter of 2020, which negatively impacted its near-term

operating performance. Based on these factors, our outlook for the FedEx Office business and retail industry changed in the fourth

quarter of 2020.

LEGAL AND OTHER CONTINGENCIES

We are subject to various loss contingencies in connection with our operations. Contingent liabilities are difficult to measure, as their

measurement is subject to multiple factors that are not easily predicted or projected. Further, additional complexity in measuring these

liabilities arises due to the various jurisdictions in which these matters occur, which makes our ability to predict their outcome highly

uncertain. Moreover, different accounting rules must be employed to account for these items based on the nature of the contingency.

Accordingly, significant management judgment is required to assess these matters and to make determinations about the measurement

of a liability, if any. Certain pending loss contingencies are described in Note 19 of the accompanying consolidated financial

statements. In the opinion of management, the aggregate liability, if any, of individual matters or groups of related matters not

specifically described in Note 19 is not expected to be material to our financial position, results of operations or cash flows. The

following describes our methods and associated processes for evaluating these matters.

Because of the complex environment in which we operate, we are subject to numerous legal proceedings and claims, including those

relating to general commercial matters, governmental enforcement actions, employment-related claims and FedEx Ground’s service

providers. Accounting guidance for contingencies requires an accrual of estimated loss from a contingency, such as a non-income tax

or other legal proceeding or claim, when it is probable (i.e., the future event or events are likely to occur) that a loss has been incurred

and the amount of the loss can be reasonably estimated. This guidance also requires disclosure of a loss contingency matter when, in

management’s judgment, a material loss is reasonably possible or probable.

During the preparation of our financial statements, we evaluate our contingencies to determine whether it is probable, reasonably

possible or remote that a liability has been incurred. A loss is recognized for all contingencies deemed probable and estimable,

regardless of amount. For unresolved contingencies with potentially material exposure that are deemed reasonably possible, we

evaluate whether a potential loss or range of loss can be reasonably estimated.

Our evaluation of these matters is the result of a comprehensive process designed to ensure that accounting recognition of a loss or

disclosure of these contingencies is made in a timely manner and involves our legal and accounting personnel, as well as external

counsel where applicable. The process includes regular communications during each quarter and scheduled meetings shortly before

the completion of our financial statements to evaluate any new legal proceedings and the status of existing matters.

In determining whether a loss should be accrued or a loss contingency disclosed, we evaluate, among other factors:

•

the current status of each matter within the scope and context of the entire lawsuit or proceeding (e.g., the lengthy and complex

nature of class-action matters);

•

the procedural status of each matter;

• any opportunities to dispose of a lawsuit on its merits before trial (i.e., motion to dismiss or for summary judgment);

•

the amount of time remaining before a trial date;

•
•

the status of discovery;
the status of discovery;

the status of settlement, arbitration or mediation proceedings; and
the status of settlement, arbitration or mediation proceedings; and

• our judgment regarding the likelihood of success prior to or at trial.
• our judgment regarding the likelihood of success prior to or at trial.

In reaching our conclusions with respect to accrual of a loss or loss contingency disclosure, we take a holistic view of each matter
In reaching our conclusions with respect to accrual of a loss or loss contingency disclosure, we take a holistic view of each matter
based on these factors and the information available prior to the issuance of our financial statements. Uncertainty with respect to an
based on these factors and the information available prior to the issuance of our financial statements. Uncertainty with respect to an
individual factor or combination of these factors may impact our decisions related to accrual or disclosure of a loss contingency,
individual factor or combination of these factors may impact our decisions related to accrual or disclosure of a loss contingency,
including a conclusion that we are unable to establish an estimate of possible loss or a meaningful range of possible loss. We update
including a conclusion that we are unable to establish an estimate of possible loss or a meaningful range of possible loss. We update
our disclosures to reflect our most current understanding of the contingencies at the time we issue our financial statements. However,
our disclosures to reflect our most current understanding of the contingencies at the time we issue our financial statements. However,
events may arise that were not anticipated and the outcome of a contingency may result in a loss to us that differs materially from our
events may arise that were not anticipated and the outcome of a contingency may result in a loss to us that differs materially from our
previously estimated liability or range of possible loss.
previously estimated liability or range of possible loss.

Despite the inherent complexity in the accounting and disclosure of contingencies, we believe that our processes are robust and
Despite the inherent complexity in the accounting and disclosure of contingencies, we believe that our processes are robust and
thorough and provide a consistent framework for management in evaluating the potential outcome of contingencies for proper
thorough and provide a consistent framework for management in evaluating the potential outcome of contingencies for proper
accounting recognition and disclosure.
accounting recognition and disclosure.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATES. While we currently have market risk sensitive instruments related to interest rates, we do not have significant
INTEREST RATES. While we currently have market risk sensitive instruments related to interest rates, we do not have significant
exposure to changing interest rates on our long-term debt. As disclosed in Note 7 to the accompanying consolidated financial
exposure to changing interest rates on our long-term debt. As disclosed in Note 7 to the accompanying consolidated financial
statements, we had outstanding fixed-rate long-term debt (exclusive of finance leases) with an estimated fair value of $23.1 billion at
statements, we had outstanding fixed-rate long-term debt (exclusive of finance leases) with an estimated fair value of $23.1 billion at
May 31, 2021 and outstanding fixed- and floating-rate long-term debt (exclusive of finance leases) with an estimated fair value of
May 31, 2021 and outstanding fixed- and floating-rate long-term debt (exclusive of finance leases) with an estimated fair value of
$22.8 billion at May 31, 2020. Market risk for long-term debt is estimated as the potential decrease in fair value resulting from a
$22.8 billion at May 31, 2020. Market risk for long-term debt is estimated as the potential decrease in fair value resulting from a
hypothetical 10% increase in interest rates and amounts to approximately $507 million as of May 31, 2021 and approximately $303
hypothetical 10% increase in interest rates and amounts to approximately $507 million as of May 31, 2021 and approximately $303
million as of May 31, 2020. The underlying fair values of our long-term debt were estimated based on quoted market prices or on the
million as of May 31, 2020. The underlying fair values of our long-term debt were estimated based on quoted market prices or on the
current rates offered for debt with similar terms and maturities.
current rates offered for debt with similar terms and maturities.

We have interest rate risk with respect to our pension and postretirement benefit obligations. Changes in interest rates impact our
We have interest rate risk with respect to our pension and postretirement benefit obligations. Changes in interest rates impact our
liabilities associated with these retirement plans, as well as the amount of pension and postretirement benefit expense recognized.
liabilities associated with these retirement plans, as well as the amount of pension and postretirement benefit expense recognized.
Declines in the value of plan assets could diminish the funded status of our pension plans and potentially increase our requirement to
Declines in the value of plan assets could diminish the funded status of our pension plans and potentially increase our requirement to
make contributions to the plans. Substantial investment losses on plan assets would also increase net pension expense.
make contributions to the plans. Substantial investment losses on plan assets would also increase net pension expense.

FOREIGN CURRENCY. While we are a global provider of transportation, e-commerce and business services, the majority of our
FOREIGN CURRENCY. While we are a global provider of transportation, e-commerce and business services, the majority of our
transactions during the periods presented in this Annual Report are denominated in U.S. dollars. The principal foreign currency
transactions during the periods presented in this Annual Report are denominated in U.S. dollars. The principal foreign currency
exchange rate risks to which we are exposed are in the euro, Chinese yuan, British pound, Canadian dollar, Australian dollar, Hong
exchange rate risks to which we are exposed are in the euro, Chinese yuan, British pound, Canadian dollar, Australian dollar, Hong
Kong dollar, Mexican peso, Japanese yen and Brazilian real. Historically, our exposure to foreign currency fluctuations is more
Kong dollar, Mexican peso, Japanese yen and Brazilian real. Historically, our exposure to foreign currency fluctuations is more
significant with respect to our revenue than our expenses, as a significant portion of our expenses are denominated in U.S. dollars,
significant with respect to our revenue than our expenses, as a significant portion of our expenses are denominated in U.S. dollars,
such as aircraft and fuel expenses. Foreign currency fluctuations had a slightly negative impact on operating income in 2021 and a
such as aircraft and fuel expenses. Foreign currency fluctuations had a slightly negative impact on operating income in 2021 and a
slightly positive impact on operating income in 2020. However, favorable foreign currency fluctuations also may have had an
slightly positive impact on operating income in 2020. However, favorable foreign currency fluctuations also may have had an
offsetting impact on the price we obtained or the demand for our services, which is not quantifiable. At May 31, 2021, the result of a
offsetting impact on the price we obtained or the demand for our services, which is not quantifiable. At May 31, 2021, the result of a
uniform 10% strengthening in the value of the dollar relative to the currencies in which our transactions are denominated would result
uniform 10% strengthening in the value of the dollar relative to the currencies in which our transactions are denominated would result
in an increase in expected operating income of $121 million for 2022. This theoretical calculation assumes that each exchange rate
in an increase in expected operating income of $121 million for 2022. This theoretical calculation assumes that each exchange rate
would change in the same direction relative to the U.S. dollar, which is not consistent with our actual experience in foreign currency
would change in the same direction relative to the U.S. dollar, which is not consistent with our actual experience in foreign currency
transactions. In addition to the direct effects of changes in exchange rates, fluctuations in exchange rates also affect the volume of
transactions. In addition to the direct effects of changes in exchange rates, fluctuations in exchange rates also affect the volume of
sales or the foreign currency sales price as competitors’ services become more or less attractive. The sensitivity analysis of the effects
sales or the foreign currency sales price as competitors’ services become more or less attractive. The sensitivity analysis of the effects
of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices.
of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices.

We maintain derivative financial instruments to manage foreign currency fluctuations related to probable future transactions and cash
We maintain derivative financial instruments to manage foreign currency fluctuations related to probable future transactions and cash
flows denominated in currencies other than the currency of the transacting entity which impacts our exposure to foreign currency
flows denominated in currencies other than the currency of the transacting entity which impacts our exposure to foreign currency
exchange risk. These derivatives are not designated as hedges and are accounted for at fair value with any profit or loss recorded in
exchange risk. These derivatives are not designated as hedges and are accounted for at fair value with any profit or loss recorded in
income, which was immaterial for 2021 and 2020.
income, which was immaterial for 2021 and 2020.

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

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

MANAGEMENT’S REPORT ON INTERNAL
MANAGEMENT’S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING
CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). Our internal control over financial reporting
13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). Our internal control over financial reporting
includes, among other things, defined policies and procedures for conducting and governing our business, sophisticated information
includes, among other things, defined policies and procedures for conducting and governing our business, sophisticated information
systems for processing transactions and a properly staffed, professional internal audit department. Mechanisms are in place to monitor
systems for processing transactions and a properly staffed, professional internal audit department. Mechanisms are in place to monitor
the effectiveness of our internal control over financial reporting and actions are taken to correct all identified deficiencies. Our
the effectiveness of our internal control over financial reporting and actions are taken to correct all identified deficiencies. Our
procedures for financial reporting include the active involvement of senior management, our Audit Committee and our staff of highly
procedures for financial reporting include the active involvement of senior management, our Audit Committee and our staff of highly
qualified financial and legal professionals.
qualified financial and legal professionals.

Management, with the participation of our principal executive and financial officers, assessed our internal control over financial
Management, with the participation of our principal executive and financial officers, assessed our internal control over financial
reporting as of May 31, 2021, the end of our fiscal year. Management based its assessment on criteria established in Internal Control–
reporting as of May 31, 2021, the end of our fiscal year. Management based its assessment on criteria established in Internal Control–
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the
COSO criteria).
COSO criteria).

Based on this assessment, management has concluded that our internal control over financial reporting was effective as of May 31,
Based on this assessment, management has concluded that our internal control over financial reporting was effective as of May 31,
2021.
2021.

The effectiveness of our internal control over financial reporting as of May 31, 2021, has been audited by Ernst & Young LLP, the
The effectiveness of our internal control over financial reporting as of May 31, 2021, has been audited by Ernst & Young LLP, the
independent registered public accounting firm who also audited the Company’s consolidated financial statements included in this
independent registered public accounting firm who also audited the Company’s consolidated financial statements included in this
Annual Report on Form 10-K. Ernst & Young LLP’s report on the Company’s internal control over financial reporting is included in
Annual Report on Form 10-K. Ernst & Young LLP’s report on the Company’s internal control over financial reporting is included in
this Annual Report on Form 10-K.
this Annual Report on Form 10-K.

To the Stockholders and Board of Directors of

FedEx Corporation

Opinion on Internal Control Over Financial Reporting

We have audited FedEx Corporation’s internal control over financial reporting as of May 31, 2021, based on criteria established in

Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013

framework) (the COSO criteria). In our opinion, FedEx Corporation (the Company) maintained, in all material respects, effective

internal control over financial reporting as of May 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)

(PCAOB), the consolidated balance sheets of the Company as of May 31, 2021 and 2020, the related consolidated statements of

income, comprehensive income, cash flows and changes in common stockholders’ investment for each of the three years in the period

ended May 31, 2021, and the related notes and our report dated July 19, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of

the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control

over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based

on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the

Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange

Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness

exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such

other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our

opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in

accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect

on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Memphis, Tennessee

July 19, 2021

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules

Opinion on Internal Control Over Financial Reporting
Opinion on Internal Control Over Financial Reporting

MANAGEMENT’S REPORT ON INTERNAL

CONTROL OVER FINANCIAL REPORTING

To the Stockholders and Board of Directors of
To the Stockholders and Board of Directors of
FedEx Corporation
FedEx Corporation

13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). Our internal control over financial reporting

includes, among other things, defined policies and procedures for conducting and governing our business, sophisticated information

systems for processing transactions and a properly staffed, professional internal audit department. Mechanisms are in place to monitor

the effectiveness of our internal control over financial reporting and actions are taken to correct all identified deficiencies. Our

procedures for financial reporting include the active involvement of senior management, our Audit Committee and our staff of highly

qualified financial and legal professionals.

Management, with the participation of our principal executive and financial officers, assessed our internal control over financial

reporting as of May 31, 2021, the end of our fiscal year. Management based its assessment on criteria established in Internal Control–

Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the

COSO criteria).

2021.

Based on this assessment, management has concluded that our internal control over financial reporting was effective as of May 31,

The effectiveness of our internal control over financial reporting as of May 31, 2021, has been audited by Ernst & Young LLP, the

independent registered public accounting firm who also audited the Company’s consolidated financial statements included in this

Annual Report on Form 10-K. Ernst & Young LLP’s report on the Company’s internal control over financial reporting is included in

this Annual Report on Form 10-K.

We have audited FedEx Corporation’s internal control over financial reporting as of May 31, 2021, based on criteria established in
We have audited FedEx Corporation’s internal control over financial reporting as of May 31, 2021, based on criteria established in
Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) (the COSO criteria). In our opinion, FedEx Corporation (the Company) maintained, in all material respects, effective
framework) (the COSO criteria). In our opinion, FedEx Corporation (the Company) maintained, in all material respects, effective
internal control over financial reporting as of May 31, 2021, based on the COSO criteria.
internal control over financial reporting as of May 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of May 31, 2021 and 2020, the related consolidated statements of
(PCAOB), the consolidated balance sheets of the Company as of May 31, 2021 and 2020, the related consolidated statements of
income, comprehensive income, cash flows and changes in common stockholders’ investment for each of the three years in the period
income, comprehensive income, cash flows and changes in common stockholders’ investment for each of the three years in the period
ended May 31, 2021, and the related notes and our report dated July 19, 2021 expressed an unqualified opinion thereon.
ended May 31, 2021, and the related notes and our report dated July 19, 2021 expressed an unqualified opinion thereon.

Basis for Opinion
Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control
the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based
over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based
on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
opinion.

Definition and Limitations of Internal Control Over Financial Reporting
Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP
/s/ Ernst & Young LLP

Memphis, Tennessee
Memphis, Tennessee

July 19, 2021
July 19, 2021

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Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of
To the Stockholders and Board of Directors of
FedEx Corporation
FedEx Corporation

Opinion on the Financial Statements
Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of FedEx Corporation (the Company) as of May 31, 2021 and 2020,
We have audited the accompanying consolidated balance sheets of FedEx Corporation (the Company) as of May 31, 2021 and 2020,
the related consolidated statements of income, comprehensive income, cash flows and changes in common stockholders’ investment
the related consolidated statements of income, comprehensive income, cash flows and changes in common stockholders’ investment
for each of the three years in the period ended May 31, 2021, and the related notes (collectively referred to as the “consolidated
for each of the three years in the period ended May 31, 2021, and the related notes (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of the Company at May 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in
position of the Company at May 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in
the period ended May 31, 2021, in conformity with U.S. generally accepted accounting principles.
the period ended May 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of May 31, 2021, based on criteria established in Internal
(PCAOB), the Company’s internal control over financial reporting as of May 31, 2021, based on criteria established in Internal
Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) and our report dated July 19, 2021 expressed an unqualified opinion thereon.
framework) and our report dated July 19, 2021 expressed an unqualified opinion thereon.

Basis for Opinion
Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters
Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the
critical audit matters or on the accounts or disclosures to which they relate.
critical audit matters or on the accounts or disclosures to which they relate.

Description
Description
of the
of the
Matter
Matter

Pension Projected Benefit Obligation
Pension Projected Benefit Obligation

At May 31, 2021, the Company’s aggregated projected benefit obligation for U.S. pension
At May 31, 2021, the Company’s aggregated projected benefit obligation for U.S. pension
plans was $31.4 billion and exceeded the $29.8 billion fair value of U.S. pension plan assets,
plans was $31.4 billion and exceeded the $29.8 billion fair value of U.S. pension plan assets,
resulting in an unfunded U.S. pension obligation of $1.6 billion. The net periodic benefit
resulting in an unfunded U.S. pension obligation of $1.6 billion. The net periodic benefit
income for the year ended May 31, 2021 for the U.S. pension plans was $1.3 billion. As
income for the year ended May 31, 2021 for the U.S. pension plans was $1.3 billion. As
explained in Note 14 to the consolidated financial statements, the Company sponsors defined
explained in Note 14 to the consolidated financial statements, the Company sponsors defined
benefit pension plans that provide retirement benefits to certain U.S. employees. The
benefit pension plans that provide retirement benefits to certain U.S. employees. The
Company’s projected benefit obligations for the U.S. pension plans are measured using
Company’s projected benefit obligations for the U.S. pension plans are measured using
actuarial techniques that reflect management’s assumptions for discount rate, future salary
actuarial techniques that reflect management’s assumptions for discount rate, future salary
increases, employee turnover, mortality, and retirement ages.
increases, employee turnover, mortality, and retirement ages.

Auditing the projected benefit obligation for the U.S. pension plans was complex due to the
Auditing the projected benefit obligation for the U.S. pension plans was complex due to the
highly judgmental nature and significant effect of the discount rate used in the measurement
highly judgmental nature and significant effect of the discount rate used in the measurement
process. The discount rate is developed by utilizing the yield on a theoretical portfolio of high-
process. The discount rate is developed by utilizing the yield on a theoretical portfolio of high-
grade corporate bonds that match cash flows to benefit payments, limit the concentration by
grade corporate bonds that match cash flows to benefit payments, limit the concentration by
industry and issuer, and apply screening criteria to exclude bonds with a call feature unless
industry and issuer, and apply screening criteria to exclude bonds with a call feature unless
they have a low probability of being called.
they have a low probability of being called.

How We

Addressed

the Matter

in Our

Audit

Description

of the

Matter

How We

Addressed

the Matter

in Our

Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of

controls over management’s process for estimating the projected benefit obligation for the U.S.

pension plans, including management’s review of the significant assumptions and assessment

of the data inputs provided to the actuary.

To test the projected benefit obligation of the U.S. pension plans, our audit procedures

included, among others, evaluating the methodologies used, the significant actuarial

assumptions described above, and the underlying data used by the Company. We compared the

actuarial assumptions used by management to historical trends and evaluated the change in the

projected benefit obligation of the U.S. pension plans from the prior year due to the change in

service cost, interest cost, actuarial gains and losses, benefit payments, contributions and other

activities. In addition, we involved our actuarial specialists to assist in evaluating

management’s methodology for determining the discount rate. As part of this assessment, we

compared management’s selected discount rate to an independently developed range of

reasonable discount rates. Additionally, we compared the projected future cash flows of the

U.S. pension plans to the prior year projections and compared the current year benefits paid to

the prior year projected cash flows. We also tested the completeness and accuracy of the

underlying data, including the participant data provided to management’s actuarial specialists.

Valuation of Self-Insurance Accruals

At May 31, 2021, the Company’s self-insurance accruals reflected in the balance sheet were

$4.0 billion. As explained in Note 1 to the consolidated financial statements, self-insurance

accruals include costs associated with workers’ compensation claims, vehicle accidents,

property and cargo loss, general business liabilities, and benefits paid under employee

healthcare and disability programs. These accrued liabilities are primarily based on the

actuarially estimated cost of claims, including incurred-but-not-reported (IBNR) claims.

Auditing the Company’s self-insurance accruals is complex due to the significant

measurement uncertainty inherent to the estimate, the application of management judgment,

and the use of various actuarial methods. In addition, the accruals are sensitive due to the

volume of claims and the amount of time that can pass before the final cost is known.

We obtained an understanding, evaluated the design and tested the operating effectiveness of

controls over management’s process for estimating self-insurance accruals, including

management’s review of the assumptions used, results of calculations and assessment of data

underlying the accruals.

To evaluate the self-insurance accruals, our audit procedures included, among others, testing

the completeness and accuracy of the underlying claims data used by the Company. We

involved our actuarial specialists to assist in our evaluation of the methodologies applied by

management in establishing the actuarially determined accrual and in reviewing the

Company’s reinsurance contracts by policy year to assess the Company’s self-insured

retentions, deductibles, and coverage limits. We compared the Company’s accrued amounts to

a range developed by our actuarial specialists. Furthermore, we compared the Company’s

historical estimates of expected incurred losses to actual losses experienced during the current

year.

We have served as the Company’s auditor since 2002.

/s/ Ernst & Young LLP

Memphis, Tennessee

July 19, 2021

- 76 -
- 76 -

- 77 -

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of

FedEx Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of FedEx Corporation (the Company) as of May 31, 2021 and 2020,

the related consolidated statements of income, comprehensive income, cash flows and changes in common stockholders’ investment

for each of the three years in the period ended May 31, 2021, and the related notes (collectively referred to as the “consolidated

financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company at May 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in

the period ended May 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)

(PCAOB), the Company’s internal control over financial reporting as of May 31, 2021, based on criteria established in Internal

Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013

framework) and our report dated July 19, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the

Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to

be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to

error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial

statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included

examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall

presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial

statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or

disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or

complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial

statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the

critical audit matters or on the accounts or disclosures to which they relate.

Description

of the

Matter

Pension Projected Benefit Obligation

At May 31, 2021, the Company’s aggregated projected benefit obligation for U.S. pension

plans was $31.4 billion and exceeded the $29.8 billion fair value of U.S. pension plan assets,

resulting in an unfunded U.S. pension obligation of $1.6 billion. The net periodic benefit

income for the year ended May 31, 2021 for the U.S. pension plans was $1.3 billion. As

explained in Note 14 to the consolidated financial statements, the Company sponsors defined

benefit pension plans that provide retirement benefits to certain U.S. employees. The

Company’s projected benefit obligations for the U.S. pension plans are measured using

actuarial techniques that reflect management’s assumptions for discount rate, future salary

increases, employee turnover, mortality, and retirement ages.

Auditing the projected benefit obligation for the U.S. pension plans was complex due to the

highly judgmental nature and significant effect of the discount rate used in the measurement

process. The discount rate is developed by utilizing the yield on a theoretical portfolio of high-

grade corporate bonds that match cash flows to benefit payments, limit the concentration by

industry and issuer, and apply screening criteria to exclude bonds with a call feature unless

they have a low probability of being called.

How We
How We
Addressed
Addressed
the Matter
the Matter
in Our
in Our
Audit
Audit

Description
Description
of the
of the
Matter
Matter

How We
How We
Addressed
Addressed
the Matter
the Matter
in Our
in Our
Audit
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of
We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls over management’s process for estimating the projected benefit obligation for the U.S.
controls over management’s process for estimating the projected benefit obligation for the U.S.
pension plans, including management’s review of the significant assumptions and assessment
pension plans, including management’s review of the significant assumptions and assessment
of the data inputs provided to the actuary.
of the data inputs provided to the actuary.

To test the projected benefit obligation of the U.S. pension plans, our audit procedures
To test the projected benefit obligation of the U.S. pension plans, our audit procedures
included, among others, evaluating the methodologies used, the significant actuarial
included, among others, evaluating the methodologies used, the significant actuarial
assumptions described above, and the underlying data used by the Company. We compared the
assumptions described above, and the underlying data used by the Company. We compared the
actuarial assumptions used by management to historical trends and evaluated the change in the
actuarial assumptions used by management to historical trends and evaluated the change in the
projected benefit obligation of the U.S. pension plans from the prior year due to the change in
projected benefit obligation of the U.S. pension plans from the prior year due to the change in
service cost, interest cost, actuarial gains and losses, benefit payments, contributions and other
service cost, interest cost, actuarial gains and losses, benefit payments, contributions and other
activities. In addition, we involved our actuarial specialists to assist in evaluating
activities. In addition, we involved our actuarial specialists to assist in evaluating
management’s methodology for determining the discount rate. As part of this assessment, we
management’s methodology for determining the discount rate. As part of this assessment, we
compared management’s selected discount rate to an independently developed range of
compared management’s selected discount rate to an independently developed range of
reasonable discount rates. Additionally, we compared the projected future cash flows of the
reasonable discount rates. Additionally, we compared the projected future cash flows of the
U.S. pension plans to the prior year projections and compared the current year benefits paid to
U.S. pension plans to the prior year projections and compared the current year benefits paid to
the prior year projected cash flows. We also tested the completeness and accuracy of the
the prior year projected cash flows. We also tested the completeness and accuracy of the
underlying data, including the participant data provided to management’s actuarial specialists.
underlying data, including the participant data provided to management’s actuarial specialists.

Valuation of Self-Insurance Accruals
Valuation of Self-Insurance Accruals

At May 31, 2021, the Company’s self-insurance accruals reflected in the balance sheet were
At May 31, 2021, the Company’s self-insurance accruals reflected in the balance sheet were
$4.0 billion. As explained in Note 1 to the consolidated financial statements, self-insurance
$4.0 billion. As explained in Note 1 to the consolidated financial statements, self-insurance
accruals include costs associated with workers’ compensation claims, vehicle accidents,
accruals include costs associated with workers’ compensation claims, vehicle accidents,
property and cargo loss, general business liabilities, and benefits paid under employee
property and cargo loss, general business liabilities, and benefits paid under employee
healthcare and disability programs. These accrued liabilities are primarily based on the
healthcare and disability programs. These accrued liabilities are primarily based on the
actuarially estimated cost of claims, including incurred-but-not-reported (IBNR) claims.
actuarially estimated cost of claims, including incurred-but-not-reported (IBNR) claims.

Auditing the Company’s self-insurance accruals is complex due to the significant
Auditing the Company’s self-insurance accruals is complex due to the significant
measurement uncertainty inherent to the estimate, the application of management judgment,
measurement uncertainty inherent to the estimate, the application of management judgment,
and the use of various actuarial methods. In addition, the accruals are sensitive due to the
and the use of various actuarial methods. In addition, the accruals are sensitive due to the
volume of claims and the amount of time that can pass before the final cost is known.
volume of claims and the amount of time that can pass before the final cost is known.

We obtained an understanding, evaluated the design and tested the operating effectiveness of
We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls over management’s process for estimating self-insurance accruals, including
controls over management’s process for estimating self-insurance accruals, including
management’s review of the assumptions used, results of calculations and assessment of data
management’s review of the assumptions used, results of calculations and assessment of data
underlying the accruals.
underlying the accruals.

To evaluate the self-insurance accruals, our audit procedures included, among others, testing
To evaluate the self-insurance accruals, our audit procedures included, among others, testing
the completeness and accuracy of the underlying claims data used by the Company. We
the completeness and accuracy of the underlying claims data used by the Company. We
involved our actuarial specialists to assist in our evaluation of the methodologies applied by
involved our actuarial specialists to assist in our evaluation of the methodologies applied by
management in establishing the actuarially determined accrual and in reviewing the
management in establishing the actuarially determined accrual and in reviewing the
Company’s reinsurance contracts by policy year to assess the Company’s self-insured
Company’s reinsurance contracts by policy year to assess the Company’s self-insured
retentions, deductibles, and coverage limits. We compared the Company’s accrued amounts to
retentions, deductibles, and coverage limits. We compared the Company’s accrued amounts to
a range developed by our actuarial specialists. Furthermore, we compared the Company’s
a range developed by our actuarial specialists. Furthermore, we compared the Company’s
historical estimates of expected incurred losses to actual losses experienced during the current
historical estimates of expected incurred losses to actual losses experienced during the current
year.
year.

/s/ Ernst & Young LLP
/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.
We have served as the Company’s auditor since 2002.

Memphis, Tennessee
Memphis, Tennessee

July 19, 2021
July 19, 2021

- 76 -

- 77 -
- 77 -

FEDEX CORPORATION
FEDEX CORPORATION
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
(IN MILLIONS)

FEDEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE DATA)

May 31,
May 31,

2021
2021

2020
2020

May 31,

2021

2020

ASSETS
ASSETS
CURRENT ASSETS
CURRENT ASSETS

Cash and cash equivalents
Cash and cash equivalents
Receivables, less allowances of $742 and $390
Receivables, less allowances of $742 and $390
Spare parts, supplies and fuel, less allowances of $349 and $335
Spare parts, supplies and fuel, less allowances of $349 and $335
Prepaid expenses and other
Prepaid expenses and other
Total current assets
Total current assets

PROPERTY AND EQUIPMENT, AT COST
PROPERTY AND EQUIPMENT, AT COST

Aircraft and related equipment
Aircraft and related equipment
Package handling and ground support equipment
Package handling and ground support equipment
Information technology
Information technology
Vehicles and trailers
Vehicles and trailers
Facilities and other
Facilities and other

Less accumulated depreciation and amortization
Less accumulated depreciation and amortization

Net property and equipment
Net property and equipment

OTHER LONG-TERM ASSETS
OTHER LONG-TERM ASSETS

Operating lease right-of-use assets, net
Operating lease right-of-use assets, net
Goodwill
Goodwill
Other assets
Other assets

Total other long-term assets
Total other long-term assets

$
$

7,087 $
7,087 $
12,069
12,069
587
587
837
837
20,580
20,580

26,268
26,268
13,012
13,012
7,486
7,486
9,282
9,282
14,029
14,029
70,077
70,077
34,325
34,325
35,752
35,752

15,383
15,383
6,992
6,992
4,070
4,070
26,445
26,445
82,777 $
82,777 $

4,881
4,881
10,102
10,102
572
572
828
828
16,383
16,383

24,518
24,518
11,382
11,382
6,884
6,884
9,101
9,101
13,139
13,139
65,024
65,024
31,416
31,416
33,608
33,608

13,917
13,917
6,372
6,372
3,257
3,257
23,546
23,546
73,537
73,537

LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT

CURRENT LIABILITIES

Current portion of long-term debt

Accrued salaries and employee benefits

Accounts payable

Operating lease liabilities

Accrued expenses

Total current liabilities

LONG-TERM DEBT, LESS CURRENT PORTION

OTHER LONG-TERM LIABILITIES

Deferred income taxes

Pension, postretirement healthcare and other benefit obligations

Self-insurance accruals

Operating lease liabilities

Other liabilities

Total other long-term liabilities

COMMITMENTS AND CONTINGENCIES

COMMON STOCKHOLDERS’ INVESTMENT

issued as of May 31, 2021 and 2020

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

Treasury stock, at cost

Total common stockholders’ investment

Common stock, $0.10 par value; 800 million shares authorized; 318 million shares

146 $

2,903

3,841

2,208

4,562

13,660

20,733

3,927

3,501

2,430

13,375

983

24,216

3,481

29,817

(732 )

(8,430 )

24,168

82,777 $

1,569

3,269

1,923

3,532

10,344

21,952

3,162

5,019

2,104

12,195

466

22,946

3,356

25,216

(1,147 )

(9,162 )

18,295

73,537

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

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

- 78 -
- 78 -

- 79 -

FEDEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

FEDEX CORPORATION
FEDEX CORPORATION
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE DATA)
(IN MILLIONS, EXCEPT SHARE DATA)

May 31,

2021

2020

May 31,
May 31,

2021
2021

2020
2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents

Receivables, less allowances of $742 and $390

Spare parts, supplies and fuel, less allowances of $349 and $335

Prepaid expenses and other

Total current assets

PROPERTY AND EQUIPMENT, AT COST

Aircraft and related equipment

Package handling and ground support equipment

Information technology

Vehicles and trailers

Facilities and other

Less accumulated depreciation and amortization

Net property and equipment

OTHER LONG-TERM ASSETS

Operating lease right-of-use assets, net

Goodwill

Other assets

Total other long-term assets

7,087 $

12,069

587

837

20,580

26,268

13,012

7,486

9,282

14,029

70,077

34,325

35,752

15,383

6,992

4,070

26,445

82,777 $

4,881

10,102

572

828

16,383

24,518

11,382

6,884

9,101

13,139

65,024

31,416

33,608

13,917

6,372

3,257

23,546

73,537

LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
CURRENT LIABILITIES

Current portion of long-term debt
Current portion of long-term debt
Accrued salaries and employee benefits
Accrued salaries and employee benefits
Accounts payable
Accounts payable
Operating lease liabilities
Operating lease liabilities
Accrued expenses
Accrued expenses

Total current liabilities
Total current liabilities

LONG-TERM DEBT, LESS CURRENT PORTION
LONG-TERM DEBT, LESS CURRENT PORTION
OTHER LONG-TERM LIABILITIES
OTHER LONG-TERM LIABILITIES

Deferred income taxes
Deferred income taxes
Pension, postretirement healthcare and other benefit obligations
Pension, postretirement healthcare and other benefit obligations
Self-insurance accruals
Self-insurance accruals
Operating lease liabilities
Operating lease liabilities
Other liabilities
Other liabilities

Total other long-term liabilities
Total other long-term liabilities
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS’ INVESTMENT
COMMON STOCKHOLDERS’ INVESTMENT

Common stock, $0.10 par value; 800 million shares authorized; 318 million shares
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares
issued as of May 31, 2021 and 2020
issued as of May 31, 2021 and 2020
Additional paid-in capital
Additional paid-in capital
Retained earnings
Retained earnings
Accumulated other comprehensive loss
Accumulated other comprehensive loss
Treasury stock, at cost
Treasury stock, at cost

Total common stockholders’ investment
Total common stockholders’ investment

$
$

146 $
146 $
2,903
2,903
3,841
3,841
2,208
2,208
4,562
4,562
13,660
13,660
20,733
20,733

3,927
3,927
3,501
3,501
2,430
2,430
13,375
13,375
983
983
24,216
24,216

32
32
3,481
3,481
29,817
29,817
(732 )
(732 )
(8,430 )
(8,430 )
24,168
24,168
82,777 $
82,777 $

51
51
1,569
1,569
3,269
3,269
1,923
1,923
3,532
3,532
10,344
10,344
21,952
21,952

3,162
3,162
5,019
5,019
2,104
2,104
12,195
12,195
466
466
22,946
22,946

32
32
3,356
3,356
25,216
25,216
(1,147 )
(1,147 )
(9,162 )
(9,162 )
18,295
18,295
73,537
73,537

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

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

- 78 -

- 79 -
- 79 -

FEDEX CORPORATION
FEDEX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FEDEX CORPORATION

(IN MILLIONS)

OTHER COMPREHENSIVE LOSS:

Foreign currency translation adjustments, net of tax expense of $13 in

2021 and tax benefits of $18 in 2020 and $29 in 2019

Amortization of prior service credit and other, net of tax benefits of $3

in 2021, $25 in 2020, and $28 in 2019

COMPREHENSIVE INCOME

Years Ended May 31,

2021

2020

2019

5,231 $

1,286 $

540

422

(254 )

(7 )

415

5,646 $

(79 )

(333 )

953 $

(195 )

(92 )

(287 )

253

REVENUE
REVENUE
OPERATING EXPENSES:
OPERATING EXPENSES:

Salaries and employee benefits
Salaries and employee benefits
Purchased transportation
Purchased transportation
Rentals and landing fees
Rentals and landing fees
Depreciation and amortization
Depreciation and amortization
Fuel
Fuel
Maintenance and repairs
Maintenance and repairs
Business realignment costs
Business realignment costs
Goodwill and other asset impairment charges
Goodwill and other asset impairment charges
Other
Other

OPERATING INCOME
OPERATING INCOME
OTHER (EXPENSE) INCOME:
OTHER (EXPENSE) INCOME:

Interest expense
Interest expense
Interest income
Interest income
Other retirement plans income (expense)
Other retirement plans income (expense)
Loss on debt extinguishment
Loss on debt extinguishment
Other, net
Other, net

INCOME BEFORE INCOME TAXES
INCOME BEFORE INCOME TAXES
PROVISION FOR INCOME TAXES
PROVISION FOR INCOME TAXES
NET INCOME
NET INCOME
BASIC EARNINGS PER COMMON SHARE
BASIC EARNINGS PER COMMON SHARE
DILUTED EARNINGS PER COMMON SHARE
DILUTED EARNINGS PER COMMON SHARE

2021
2021

Years ended May 31,
Years ended May 31,
2020
2020

2019
2019

$
$

83,959 $
83,959 $

69,217 $
69,217 $

69,693
69,693

NET INCOME

30,173
30,173
21,674
21,674
4,155
4,155
3,793
3,793
2,882
2,882
3,328
3,328
116
116
—
—
11,981
11,981
78,102
78,102
5,857
5,857

(793 )
(793 )
52
52
1,983
1,983
(393 )
(393 )
(32 )
(32 )
817
817
6,674
6,674
1,443
1,443
5,231 $
5,231 $
19.79 $
19.79 $
19.45 $
19.45 $

25,031
25,031
17,466
17,466
3,712
3,712
3,615
3,615
3,156
3,156
2,893
2,893
—
—
435
435
10,492
10,492
66,800
66,800
2,417
2,417

(672 )
(672 )
55
55
(122 )
(122 )
—
—
(9 )
(9 )
(748 )
(748 )
1,669
1,669
383
383
1,286 $
1,286 $
4.92 $
4.92 $
4.90 $
4.90 $

24,776
24,776
16,654
16,654
3,360
3,360
3,353
3,353
3,889
3,889
2,834
2,834
320
320
—
—
10,041
10,041
65,227
65,227
4,466
4,466

(588 )
(588 )
59
59
(3,251 )
(3,251 )
—
—
(31 )
(31 )
(3,811 )
(3,811 )
655
655
115
115
540
540
2.06
2.06
2.03
2.03

$
$
$
$
$
$

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

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

- 80 -
- 80 -

- 81 -

FEDEX CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

FEDEX CORPORATION
FEDEX CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN MILLIONS)
(IN MILLIONS)

NET INCOME
NET INCOME
OTHER COMPREHENSIVE LOSS:
OTHER COMPREHENSIVE LOSS:

Foreign currency translation adjustments, net of tax expense of $13 in
Foreign currency translation adjustments, net of tax expense of $13 in
2021 and tax benefits of $18 in 2020 and $29 in 2019
2021 and tax benefits of $18 in 2020 and $29 in 2019
Amortization of prior service credit and other, net of tax benefits of $3
Amortization of prior service credit and other, net of tax benefits of $3
in 2021, $25 in 2020, and $28 in 2019
in 2021, $25 in 2020, and $28 in 2019

COMPREHENSIVE INCOME
COMPREHENSIVE INCOME

2021
2021

Years Ended May 31,
Years Ended May 31,
2020
2020

2019
2019

$
$

5,231 $
5,231 $

1,286 $
1,286 $

540
540

422
422

(254 )
(254 )

(7 )
(7 )
415
415
5,646 $
5,646 $

(79 )
(79 )
(333 )
(333 )
953 $
953 $

$
$

(195 )
(195 )

(92 )
(92 )
(287 )
(287 )
253
253

REVENUE

OPERATING EXPENSES:

Salaries and employee benefits

Purchased transportation

Rentals and landing fees

Depreciation and amortization

Maintenance and repairs

Business realignment costs

Goodwill and other asset impairment charges

Fuel

Other

OPERATING INCOME

OTHER (EXPENSE) INCOME:

Interest expense

Interest income

Other retirement plans income (expense)

Loss on debt extinguishment

Other, net

INCOME BEFORE INCOME TAXES

PROVISION FOR INCOME TAXES

NET INCOME

BASIC EARNINGS PER COMMON SHARE

DILUTED EARNINGS PER COMMON SHARE

Years ended May 31,

2021

2020

2019

83,959 $

69,217 $

69,693

30,173

21,674

4,155

3,793

2,882

3,328

116

—

11,981

78,102

5,857

(793 )

1,983

(393 )

(32 )

817

6,674

1,443

5,231 $

19.79 $

19.45 $

25,031

17,466

3,712

3,615

3,156

2,893

—

435

10,492

66,800

2,417

(672 )

(122 )

—

(9 )

(748 )

1,669

383

1,286 $

4.92 $

4.90 $

24,776

16,654

3,360

3,353

3,889

2,834

320

—

10,041

65,227

4,466

(588 )

(3,251 )

—

(31 )

(3,811 )

655

115

540

2.06

2.03

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

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

- 80 -

- 81 -
- 81 -

FEDEX CORPORATION
FEDEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(IN MILLIONS)

CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ INVESTMENT

(IN MILLIONS, EXCEPT SHARE DATA)

FEDEX CORPORATION

OPERATING ACTIVITIES
OPERATING ACTIVITIES

Net income
Net income
Adjustments to reconcile net income to cash provided by operating
Adjustments to reconcile net income to cash provided by operating
activities:
activities:

Depreciation and amortization
Depreciation and amortization
Provision for uncollectible accounts
Provision for uncollectible accounts
Other noncash items including leases and deferred income tax
Other noncash items including leases and deferred income tax
Stock-based compensation
Stock-based compensation
Retirement plans mark-to-market adjustments
Retirement plans mark-to-market adjustments
Loss on extinguishment of debt
Loss on extinguishment of debt
Gain from sale of business
Gain from sale of business
Business realignment costs
Business realignment costs
Goodwill and other asset impairment charges
Goodwill and other asset impairment charges
Changes in assets and liabilities:
Changes in assets and liabilities:

Receivables
Receivables
Other current assets
Other current assets
Pension and postretirement healthcare assets and liabilities, net
Pension and postretirement healthcare assets and liabilities, net
Accounts payable and other liabilities
Accounts payable and other liabilities
Other, net
Other, net

Cash provided by operating activities
Cash provided by operating activities
INVESTING ACTIVITIES
INVESTING ACTIVITIES
Capital expenditures
Capital expenditures
Business acquisitions, net of cash acquired
Business acquisitions, net of cash acquired
Proceeds from asset dispositions and other
Proceeds from asset dispositions and other

Cash used in investing activities
Cash used in investing activities
FINANCING ACTIVITIES
FINANCING ACTIVITIES

Payments on debt
Payments on debt
Proceeds from debt issuances
Proceeds from debt issuances
Proceeds from stock issuances
Proceeds from stock issuances
Dividends paid
Dividends paid
Purchase of treasury stock
Purchase of treasury stock
Other, net
Other, net

Cash (used in) provided by financing activities
Cash (used in) provided by financing activities
Effect of exchange rate changes on cash
Effect of exchange rate changes on cash
Net increase (decrease) in cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Cash and cash equivalents at end of period

2021
2021

Years ended May 31,
Years ended May 31,
2020
2020

2019
2019

$
$

5,231 $
5,231 $

1,286 $
1,286 $

540
540

3,793
3,793
577
577
2,887
2,887
200
200
(1,176 )
(1,176 )
393
393
—
—
102
102
—
—

(1,389 )
(1,389 )
(40 )
(40 )
(317 )
(317 )
71
71
(197 )
(197 )
10,135
10,135

(5,884 )
(5,884 )
(228 )
(228 )
102
102
(6,010 )
(6,010 )

(6,318 )
(6,318 )
4,212
4,212
740
740
(686 )
(686 )
—
—
(38 )
(38 )
(2,090 )
(2,090 )
171
171
2,206
2,206
4,881
4,881
7,087 $
7,087 $

3,615
3,615
442
442
2,449
2,449
168
168
794
794
—
—
—
—
—
—
435
435

(1,331 )
(1,331 )
(59 )
(59 )
(908 )
(908 )
(1,787 )
(1,787 )
(7 )
(7 )
5,097
5,097

(5,868 )
(5,868 )
—
—
22
22
(5,846 )
(5,846 )

(2,548 )
(2,548 )
6,556
6,556
64
64
(679 )
(679 )
(3 )
(3 )
(9 )
(9 )
3,381
3,381
(70 )
(70 )
2,562
2,562
2,319
2,319
4,881 $
4,881 $

3,353
3,353
295
295
(233 )
(233 )
174
174
3,882
3,882
—
—
(8 )
(8 )
101
101
—
—

(873 )
(873 )
(25 )
(25 )
(909 )
(909 )
(571 )
(571 )
(113 )
(113 )
5,613
5,613

(5,490 )
(5,490 )
(66 )
(66 )
83
83
(5,473 )
(5,473 )

(1,436 )
(1,436 )
2,463
2,463
101
101
(683 )
(683 )
(1,480 )
(1,480 )
(4 )
(4 )
(1,039 )
(1,039 )
(47 )
(47 )
(946 )
(946 )
3,265
3,265
2,319
2,319

$
$

Common

Stock

Additional

Paid-in

Capital

Retained

Earnings

Accumulated

Other

Comprehensive

Loss

Treasury

Stock

Total

32 $

3,117 $ 24,823 $

(578 ) $

(7,978 ) $ 19,416

Balance at May 31, 2018

Net income

Other comprehensive loss, net of tax of $57

Purchase of treasury stock (6.6 million shares)

Cash dividends declared ($2.60 per share)

Employee incentive plans and other

(1.3 million shares issued)

Balance at May 31, 2019

Net income

Other comprehensive loss, net of tax of $43

Purchase of treasury stock (0.02 million shares)

Cash dividends declared ($2.60 per share)

Employee incentive plans and other

(1.0 million shares issued)

Adoption of new accounting standards on June 1, 2019(1)

Reclassification to retained earnings due to the adoption

of a new accounting standard on June 1, 2019(2)

Balance at May 31, 2020

Net income

Other comprehensive gain, net of tax of ($10)

Cash dividends declared ($2.60 per share)

Employee incentive plans and other

(5.4 million shares issued)

Balance at May 31, 2021

—

32 $

—

540

—

(683 )

—

(287 )

—

540

(287 )

(1,480 )

—

(683 )

114

(32 )

—

169

251

3,231 24,648

(865 )

(9,289 ) 17,757

—

1,286

—

(679 )

—

(333 )

—

(3 )

—

1,286

(333 )

(3 )

(679 )

125

—

(35 )

(4 )

—

130

—

220

(4 )

—

3,356 25,216

(1,147 )

(9,162 ) 18,295

—

5,231

—

(686 )

—

415

—

5,231

415

(686 )

3,481 $ 29,817 $

(732 ) $

(8,430 ) $ 24,168

125

—

732

913

(1) Relates to the adoption of Accounting Standards Update (“ASU”) 2016-02 and ASU 2018-02.

(2) Relates to the adoption of ASU 2018-02.

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

- 82 -
- 82 -

- 83 -

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

Pension and postretirement healthcare assets and liabilities, net

OPERATING ACTIVITIES

Net income

activities:

Adjustments to reconcile net income to cash provided by operating

Depreciation and amortization

Provision for uncollectible accounts

Other noncash items including leases and deferred income tax

Stock-based compensation

Retirement plans mark-to-market adjustments

Loss on extinguishment of debt

Gain from sale of business

Business realignment costs

Goodwill and other asset impairment charges

Changes in assets and liabilities:

Receivables

Other current assets

Accounts payable and other liabilities

Other, net

Cash provided by operating activities

INVESTING ACTIVITIES

Capital expenditures

Business acquisitions, net of cash acquired

Proceeds from asset dispositions and other

Cash used in investing activities

FINANCING ACTIVITIES

Payments on debt

Proceeds from debt issuances

Proceeds from stock issuances

Dividends paid

Purchase of treasury stock

Other, net

Cash (used in) provided by financing activities

Effect of exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Years ended May 31,

2021

2020

2019

5,231 $

1,286 $

540

3,793

577

2,887

200

(1,176 )

393

—

102

—

(1,389 )

(40 )

(317 )

(197 )

10,135

(5,884 )

(228 )

102

(6,010 )

(6,318 )

4,212

740

(686 )

—

(38 )

(2,090 )

171

2,206

4,881

7,087 $

3,615

442

2,449

168

794

—

435

(1,331 )

(59 )

(908 )

(1,787 )

(7 )

5,097

—

(2,548 )

6,556

(679 )

(3 )

(9 )

3,381

(70 )

2,562

2,319

4,881 $

3,353

295

(233 )

174

3,882

—

(8 )

101

—

(873 )

(25 )

(909 )

(571 )

(113 )

5,613

(66 )

(1,436 )

2,463

101

(683 )

(1,480 )

(4 )

(1,039 )

(47 )

(946 )

3,265

2,319

(5,868 )

(5,490 )

(5,846 )

(5,473 )

FEDEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN MILLIONS)

FEDEX CORPORATION
FEDEX CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ INVESTMENT
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ INVESTMENT
(IN MILLIONS, EXCEPT SHARE DATA)
(IN MILLIONS, EXCEPT SHARE DATA)

$
$

Balance at May 31, 2018
Balance at May 31, 2018
Net income
Net income
Other comprehensive loss, net of tax of $57
Other comprehensive loss, net of tax of $57
Purchase of treasury stock (6.6 million shares)
Purchase of treasury stock (6.6 million shares)
Cash dividends declared ($2.60 per share)
Cash dividends declared ($2.60 per share)
Employee incentive plans and other
Employee incentive plans and other
(1.3 million shares issued)
(1.3 million shares issued)
Balance at May 31, 2019
Balance at May 31, 2019
Net income
Net income
Other comprehensive loss, net of tax of $43
Other comprehensive loss, net of tax of $43
Purchase of treasury stock (0.02 million shares)
Purchase of treasury stock (0.02 million shares)
Cash dividends declared ($2.60 per share)
Cash dividends declared ($2.60 per share)
Employee incentive plans and other
Employee incentive plans and other
(1.0 million shares issued)
(1.0 million shares issued)
Adoption of new accounting standards on June 1, 2019(1)
Adoption of new accounting standards on June 1, 2019(1)
Reclassification to retained earnings due to the adoption
Reclassification to retained earnings due to the adoption
of a new accounting standard on June 1, 2019(2)
of a new accounting standard on June 1, 2019(2)
Balance at May 31, 2020
Balance at May 31, 2020
Net income
Net income
Other comprehensive gain, net of tax of ($10)
Other comprehensive gain, net of tax of ($10)
Cash dividends declared ($2.60 per share)
Cash dividends declared ($2.60 per share)
Employee incentive plans and other
Employee incentive plans and other
(5.4 million shares issued)
(5.4 million shares issued)
Balance at May 31, 2021
Balance at May 31, 2021

$
$

Common
Common
Stock
Stock

Additional
Additional
Paid-in
Paid-in
Capital
Capital

Retained
Retained
Earnings
Earnings

Accumulated
Accumulated
Other
Other
Comprehensive
Comprehensive
Loss
Loss

32 $
32 $
—
—
—
—
—
—
—
—

3,117 $ 24,823 $
3,117 $ 24,823 $
540
540
—
—
—
—
(683 )
(683 )

—
—
—
—
—
—
—
—

Total
Total

Treasury
Treasury
Stock
Stock
(7,978 ) $ 19,416
(7,978 ) $ 19,416
540
540
(287 )
(287 )
(1,480 )
(1,480 )
(683 )
(683 )

—
—
—
—
(1,480 )
(1,480 )
—
—

(578 ) $
(578 ) $
—
—
(287 )
(287 )
—
—
—
—

—
—
32
32
—
—
—
—
—
—
—
—

—
—
—
—

—
—
32
32
—
—
—
—
—
—

114
114

(32 )
(32 )
3,231 24,648
3,231 24,648
1,286
1,286
—
—
—
—
(679 )
(679 )

—
—
—
—
—
—
—
—

—
—
(865 )
(865 )
—
—
(333 )
(333 )
—
—
—
—

169
169

251
251
(9,289 ) 17,757
(9,289 ) 17,757
1,286
1,286
(333 )
(333 )
(3 )
(3 )
(679 )
(679 )

—
—
—
—
(3 )
(3 )
—
—

125
125
—
—

(35 )
(35 )
(4 )
(4 )

—
—
—
—

130
130
—
—

220
220
(4 )
(4 )

—
—

—
—
3,356 25,216
3,356 25,216
5,231
5,231
—
—
(686 )
(686 )

—
—
—
—
—
—

51
51
(1,147 )
(1,147 )
—
—
415
415
—
—

—
—

51
51
(9,162 ) 18,295
(9,162 ) 18,295
5,231
5,231
415
415
(686 )
(686 )

—
—
—
—
—
—

—
—
32 $
32 $

125
125

56
56
3,481 $ 29,817 $
3,481 $ 29,817 $

—
—
(732 ) $
(732 ) $

732
732

913
913
(8,430 ) $ 24,168
(8,430 ) $ 24,168

(1) Relates to the adoption of Accounting Standards Update (“ASU”) 2016-02 and ASU 2018-02.
(1) Relates to the adoption of Accounting Standards Update (“ASU”) 2016-02 and ASU 2018-02.

(2) Relates to the adoption of ASU 2018-02.
(2) Relates to the adoption of ASU 2018-02.

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

- 82 -

- 83 -
- 83 -

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

FEDEX CORPORATION
FEDEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: DESCRIPTION OF BUSINESS SEGMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 1: DESCRIPTION OF BUSINESS SEGMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS SEGMENTS. FedEx Corporation (“FedEx”) provides a broad portfolio of transportation, e-commerce
DESCRIPTION OF BUSINESS SEGMENTS. FedEx Corporation (“FedEx”) provides a broad portfolio of transportation, e-commerce
and business services through companies competing collectively, operating collaboratively and innovating digitally, under the
and business services through companies competing collectively, operating collaboratively and innovating digitally, under the
respected FedEx brand. Our primary operating companies are Federal Express Corporation (“FedEx Express”), the world’s largest
respected FedEx brand. Our primary operating companies are Federal Express Corporation (“FedEx Express”), the world’s largest
express transportation company; FedEx Ground Package System, Inc. (“FedEx Ground”), a leading North American provider of
express transportation company; FedEx Ground Package System, Inc. (“FedEx Ground”), a leading North American provider of
small-package ground delivery services; and FedEx Freight Corporation (“FedEx Freight”), a leading North American provider of
small-package ground delivery services; and FedEx Freight Corporation (“FedEx Freight”), a leading North American provider of
less-than-truckload (“LTL”) freight transportation. These companies represent our major service lines and, along with FedEx
less-than-truckload (“LTL”) freight transportation. These companies represent our major service lines and, along with FedEx
Corporate Services, Inc. (“FedEx Services”), constitute our reportable segments. Our FedEx Services segment provides sales,
Corporate Services, Inc. (“FedEx Services”), constitute our reportable segments. Our FedEx Services segment provides sales,
marketing, information technology, communications, customer service, technical support, billing and collection services, and certain
marketing, information technology, communications, customer service, technical support, billing and collection services, and certain
back-office functions that support our operating segments.
back-office functions that support our operating segments.

FISCAL YEARS. Except as otherwise specified, references to years indicate our fiscal year ended May 31, 2021 or ended May 31 of
FISCAL YEARS. Except as otherwise specified, references to years indicate our fiscal year ended May 31, 2021 or ended May 31 of
the year referenced.
the year referenced.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the accounts of FedEx and its subsidiaries,
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the accounts of FedEx and its subsidiaries,
substantially all of which are wholly owned. All significant intercompany accounts and transactions have been eliminated in
substantially all of which are wholly owned. All significant intercompany accounts and transactions have been eliminated in
consolidation.
consolidation.

REVENUE RECOGNITION.
REVENUE RECOGNITION.

Satisfaction of Performance Obligation
Satisfaction of Performance Obligation

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the basis of revenue
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the basis of revenue
recognition in accordance with U.S. generally accepted accounting principles (“GAAP”). To determine the proper revenue recognition
recognition in accordance with U.S. generally accepted accounting principles (“GAAP”). To determine the proper revenue recognition
method for contracts, we evaluate whether two or more contracts should be combined and accounted for as one single contract and
method for contracts, we evaluate whether two or more contracts should be combined and accounted for as one single contract and
whether the combined or single contract should be accounted for as more than one performance obligation. For most of our contracts,
whether the combined or single contract should be accounted for as more than one performance obligation. For most of our contracts,
the customer contracts with us to provide distinct services within a single contract, primarily transportation services. Substantially all
the customer contracts with us to provide distinct services within a single contract, primarily transportation services. Substantially all
of our contracts with customers for transportation services include only one performance obligation, the transportation services
of our contracts with customers for transportation services include only one performance obligation, the transportation services
themselves. However, if a contract is separated into more than one performance obligation, we allocate the total transaction price to
themselves. However, if a contract is separated into more than one performance obligation, we allocate the total transaction price to
each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services
each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services
underlying each performance obligation. We frequently sell standard transportation services with observable standalone sales prices.
underlying each performance obligation. We frequently sell standard transportation services with observable standalone sales prices.
In these instances, the observable standalone sales are used to determine the standalone selling price.
In these instances, the observable standalone sales are used to determine the standalone selling price.

For transportation services, revenue is recognized over time as we perform the services in the contract because of the continuous
For transportation services, revenue is recognized over time as we perform the services in the contract because of the continuous
transfer of control to the customer. Our customers receive the benefit of our services as the goods are transported from one location to
transfer of control to the customer. Our customers receive the benefit of our services as the goods are transported from one location to
another. If we were unable to complete delivery to the final location, another entity would not need to reperform the transportation
another. If we were unable to complete delivery to the final location, another entity would not need to reperform the transportation
service already performed. As control transfers over time, revenue is recognized based on the extent of progress towards completion
service already performed. As control transfers over time, revenue is recognized based on the extent of progress towards completion
of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on
of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on
the nature of the products or services to be provided. We use the cost-to-cost measure of progress for our package delivery contracts
the nature of the products or services to be provided. We use the cost-to-cost measure of progress for our package delivery contracts
because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost
because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost
measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total
measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total
estimated costs at completion of the performance obligation. Revenue, including ancillary or accessorial fees and reductions for
estimated costs at completion of the performance obligation. Revenue, including ancillary or accessorial fees and reductions for
estimated customer incentives, is recorded proportionally as costs are incurred. Costs to fulfill include labor and other direct costs and
estimated customer incentives, is recorded proportionally as costs are incurred. Costs to fulfill include labor and other direct costs and
an allocation of indirect costs. For our FedEx Freight and freight forwarding contracts, an output method of progress based on time-in-
an allocation of indirect costs. For our FedEx Freight and freight forwarding contracts, an output method of progress based on time-in-
transit is utilized as the timing of costs incurred does not best depict the transfer of control to the customer.
transit is utilized as the timing of costs incurred does not best depict the transfer of control to the customer.

We also provide customized customer-specific solutions, such as supply chain management solutions and inventory and service parts
We also provide customized customer-specific solutions, such as supply chain management solutions and inventory and service parts
logistics, through which we provide the service of integrating a complex set of tasks and components into a single capability. For these
logistics, through which we provide the service of integrating a complex set of tasks and components into a single capability. For these
arrangements, the majority of which are conducted by our FedEx Logistics, Inc. (“FedEx Logistics”) operating segment, the entire
arrangements, the majority of which are conducted by our FedEx Logistics, Inc. (“FedEx Logistics”) operating segment, the entire
contract is accounted for as one performance obligation. For these performance obligations, we typically have a right to consideration
contract is accounted for as one performance obligation. For these performance obligations, we typically have a right to consideration
from customers in an amount that corresponds directly with the value to the customers of our performance completed to date, and as
from customers in an amount that corresponds directly with the value to the customers of our performance completed to date, and as
such we recognize revenue in the amount to which we have a right to invoice the customer.
such we recognize revenue in the amount to which we have a right to invoice the customer.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDEX CORPORATION

Contract Modification

Variable Consideration

Contracts are often modified to account for changes in the rates we charge our customers or to add additional distinct services. We

consider contract modifications to exist when the modification either creates new enforceable rights and obligations or alters the

existing arrangement. Contract modifications that add distinct goods or services are treated as separate contracts. Contract

modifications that do not add distinct goods or services typically change the price of existing services. These contract modifications

are accounted for prospectively as the remaining performance obligations are distinct.

Certain contracts contain customer incentives, guaranteed service refunds and other provisions that can either increase or decrease the

transaction price. These incentives are generally awarded based upon achieving certain performance metrics. We estimate variable

consideration as the most likely amount to which we expect to be entitled. We include estimated amounts of revenue, which may be

reduced by incentives or other contract provisions, in the transaction price to the extent it is probable that a significant reversal of

cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our

estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an

assessment of anticipated customer spending and all information (historical, current and forecasted) that is reasonably available to us.

Principal vs. Agent Considerations

Transportation services are provided with the use of employees and independent businesses that contract with FedEx. GAAP requires

us to evaluate whether our businesses themselves promise to transfer services to the customer (as the principal) or to arrange for

services to be provided by another party (as the agent) using a control model. Based on our evaluation of the control model, we

determined that FedEx is the principal to the transaction for most of these services and revenue is recognized on a gross basis based on

the transfer of control to the customer. Costs associated with independent businesses providing transportation services are recognized

as incurred and included in the caption “Purchased transportation” in the accompanying consolidated statements of income.

Our contract logistics, global trade services and certain transportation businesses engage in certain transactions wherein they act as

agents. Revenue from these transactions is recorded on a net basis. Net revenue includes billings to customers less third-party charges,

including transportation or handling costs, fees, commissions and taxes and duties.

Contract Assets and Liabilities

Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment

only once all performance obligations have been completed (e.g., packages have been delivered). Contract assets are generally

classified as current and the full balance is converted each quarter based on the short-term nature of the transactions. Our contract

liabilities consist of advance payments and billings in excess of revenue. The full balance of deferred revenue is converted each

quarter based on the short-term nature of the transactions.

Gross contract assets related to in-transit shipments totaled $715 million and $563 million at May 31, 2021 and May 31, 2020,

respectively. Contract assets net of deferred unearned revenue were $572 million and $456 million at May 31, 2021 and May 31,

2020, respectively. Contract assets are included within current assets in the accompanying consolidated balance sheets. Contract

liabilities related to advance payments from customers were $9 million and $10 million at May 31, 2021 and May 31, 2020,

respectively. Contract liabilities are included within current liabilities in the accompanying consolidated balance sheets.

Certain of our revenue-producing transactions are subject to taxes and duties, such as sales tax, assessed by governmental authorities.

We present these revenues net of tax. Under the typical payment terms of our customer contracts, the customer pays at periodic

intervals (e.g., every 15 days, 30 days, 45 days, etc.) for shipments included on invoices received. It is not customary business practice

to extend payment terms past 90 days, and as such, we do not have a practice of including a significant financing component within

Payment terms

our revenue contracts with customers.

Disaggregation of Revenue

See Note 15 for disclosure of disaggregated revenue for the periods ended May 31. This presentation is consistent with how we

organize our segments internally for making operating decisions and measuring performance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDEX CORPORATION

NOTE 1: DESCRIPTION OF BUSINESS SEGMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS SEGMENTS. FedEx Corporation (“FedEx”) provides a broad portfolio of transportation, e-commerce

and business services through companies competing collectively, operating collaboratively and innovating digitally, under the

respected FedEx brand. Our primary operating companies are Federal Express Corporation (“FedEx Express”), the world’s largest

express transportation company; FedEx Ground Package System, Inc. (“FedEx Ground”), a leading North American provider of

small-package ground delivery services; and FedEx Freight Corporation (“FedEx Freight”), a leading North American provider of

less-than-truckload (“LTL”) freight transportation. These companies represent our major service lines and, along with FedEx

Corporate Services, Inc. (“FedEx Services”), constitute our reportable segments. Our FedEx Services segment provides sales,

marketing, information technology, communications, customer service, technical support, billing and collection services, and certain

back-office functions that support our operating segments.

FISCAL YEARS. Except as otherwise specified, references to years indicate our fiscal year ended May 31, 2021 or ended May 31 of

the year referenced.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the accounts of FedEx and its subsidiaries,

substantially all of which are wholly owned. All significant intercompany accounts and transactions have been eliminated in

consolidation.

REVENUE RECOGNITION.

Satisfaction of Performance Obligation

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the basis of revenue

recognition in accordance with U.S. generally accepted accounting principles (“GAAP”). To determine the proper revenue recognition

method for contracts, we evaluate whether two or more contracts should be combined and accounted for as one single contract and

whether the combined or single contract should be accounted for as more than one performance obligation. For most of our contracts,

the customer contracts with us to provide distinct services within a single contract, primarily transportation services. Substantially all

of our contracts with customers for transportation services include only one performance obligation, the transportation services

themselves. However, if a contract is separated into more than one performance obligation, we allocate the total transaction price to

each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services

underlying each performance obligation. We frequently sell standard transportation services with observable standalone sales prices.

In these instances, the observable standalone sales are used to determine the standalone selling price.

For transportation services, revenue is recognized over time as we perform the services in the contract because of the continuous

transfer of control to the customer. Our customers receive the benefit of our services as the goods are transported from one location to

another. If we were unable to complete delivery to the final location, another entity would not need to reperform the transportation

service already performed. As control transfers over time, revenue is recognized based on the extent of progress towards completion

of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on

the nature of the products or services to be provided. We use the cost-to-cost measure of progress for our package delivery contracts

because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost

measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total

estimated costs at completion of the performance obligation. Revenue, including ancillary or accessorial fees and reductions for

estimated customer incentives, is recorded proportionally as costs are incurred. Costs to fulfill include labor and other direct costs and

an allocation of indirect costs. For our FedEx Freight and freight forwarding contracts, an output method of progress based on time-in-

transit is utilized as the timing of costs incurred does not best depict the transfer of control to the customer.

We also provide customized customer-specific solutions, such as supply chain management solutions and inventory and service parts

logistics, through which we provide the service of integrating a complex set of tasks and components into a single capability. For these

arrangements, the majority of which are conducted by our FedEx Logistics, Inc. (“FedEx Logistics”) operating segment, the entire

contract is accounted for as one performance obligation. For these performance obligations, we typically have a right to consideration

such we recognize revenue in the amount to which we have a right to invoice the customer.

FEDEX CORPORATION
FEDEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract Modification
Contract Modification

Contracts are often modified to account for changes in the rates we charge our customers or to add additional distinct services. We
Contracts are often modified to account for changes in the rates we charge our customers or to add additional distinct services. We
consider contract modifications to exist when the modification either creates new enforceable rights and obligations or alters the
consider contract modifications to exist when the modification either creates new enforceable rights and obligations or alters the
existing arrangement. Contract modifications that add distinct goods or services are treated as separate contracts. Contract
existing arrangement. Contract modifications that add distinct goods or services are treated as separate contracts. Contract
modifications that do not add distinct goods or services typically change the price of existing services. These contract modifications
modifications that do not add distinct goods or services typically change the price of existing services. These contract modifications
are accounted for prospectively as the remaining performance obligations are distinct.
are accounted for prospectively as the remaining performance obligations are distinct.

Variable Consideration
Variable Consideration

Certain contracts contain customer incentives, guaranteed service refunds and other provisions that can either increase or decrease the
Certain contracts contain customer incentives, guaranteed service refunds and other provisions that can either increase or decrease the
transaction price. These incentives are generally awarded based upon achieving certain performance metrics. We estimate variable
transaction price. These incentives are generally awarded based upon achieving certain performance metrics. We estimate variable
consideration as the most likely amount to which we expect to be entitled. We include estimated amounts of revenue, which may be
consideration as the most likely amount to which we expect to be entitled. We include estimated amounts of revenue, which may be
reduced by incentives or other contract provisions, in the transaction price to the extent it is probable that a significant reversal of
reduced by incentives or other contract provisions, in the transaction price to the extent it is probable that a significant reversal of
cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our
cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our
estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an
estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based on an
assessment of anticipated customer spending and all information (historical, current and forecasted) that is reasonably available to us.
assessment of anticipated customer spending and all information (historical, current and forecasted) that is reasonably available to us.

Principal vs. Agent Considerations
Principal vs. Agent Considerations

Transportation services are provided with the use of employees and independent businesses that contract with FedEx. GAAP requires
Transportation services are provided with the use of employees and independent businesses that contract with FedEx. GAAP requires
us to evaluate whether our businesses themselves promise to transfer services to the customer (as the principal) or to arrange for
us to evaluate whether our businesses themselves promise to transfer services to the customer (as the principal) or to arrange for
services to be provided by another party (as the agent) using a control model. Based on our evaluation of the control model, we
services to be provided by another party (as the agent) using a control model. Based on our evaluation of the control model, we
determined that FedEx is the principal to the transaction for most of these services and revenue is recognized on a gross basis based on
determined that FedEx is the principal to the transaction for most of these services and revenue is recognized on a gross basis based on
the transfer of control to the customer. Costs associated with independent businesses providing transportation services are recognized
the transfer of control to the customer. Costs associated with independent businesses providing transportation services are recognized
as incurred and included in the caption “Purchased transportation” in the accompanying consolidated statements of income.
as incurred and included in the caption “Purchased transportation” in the accompanying consolidated statements of income.

Our contract logistics, global trade services and certain transportation businesses engage in certain transactions wherein they act as
Our contract logistics, global trade services and certain transportation businesses engage in certain transactions wherein they act as
agents. Revenue from these transactions is recorded on a net basis. Net revenue includes billings to customers less third-party charges,
agents. Revenue from these transactions is recorded on a net basis. Net revenue includes billings to customers less third-party charges,
including transportation or handling costs, fees, commissions and taxes and duties.
including transportation or handling costs, fees, commissions and taxes and duties.

Contract Assets and Liabilities
Contract Assets and Liabilities

Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment
Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment
only once all performance obligations have been completed (e.g., packages have been delivered). Contract assets are generally
only once all performance obligations have been completed (e.g., packages have been delivered). Contract assets are generally
classified as current and the full balance is converted each quarter based on the short-term nature of the transactions. Our contract
classified as current and the full balance is converted each quarter based on the short-term nature of the transactions. Our contract
liabilities consist of advance payments and billings in excess of revenue. The full balance of deferred revenue is converted each
liabilities consist of advance payments and billings in excess of revenue. The full balance of deferred revenue is converted each
quarter based on the short-term nature of the transactions.
quarter based on the short-term nature of the transactions.

Gross contract assets related to in-transit shipments totaled $715 million and $563 million at May 31, 2021 and May 31, 2020,
Gross contract assets related to in-transit shipments totaled $715 million and $563 million at May 31, 2021 and May 31, 2020,
respectively. Contract assets net of deferred unearned revenue were $572 million and $456 million at May 31, 2021 and May 31,
respectively. Contract assets net of deferred unearned revenue were $572 million and $456 million at May 31, 2021 and May 31,
2020, respectively. Contract assets are included within current assets in the accompanying consolidated balance sheets. Contract
2020, respectively. Contract assets are included within current assets in the accompanying consolidated balance sheets. Contract
liabilities related to advance payments from customers were $9 million and $10 million at May 31, 2021 and May 31, 2020,
liabilities related to advance payments from customers were $9 million and $10 million at May 31, 2021 and May 31, 2020,
respectively. Contract liabilities are included within current liabilities in the accompanying consolidated balance sheets.
respectively. Contract liabilities are included within current liabilities in the accompanying consolidated balance sheets.

Payment terms
Payment terms

Certain of our revenue-producing transactions are subject to taxes and duties, such as sales tax, assessed by governmental authorities.
Certain of our revenue-producing transactions are subject to taxes and duties, such as sales tax, assessed by governmental authorities.
We present these revenues net of tax. Under the typical payment terms of our customer contracts, the customer pays at periodic
We present these revenues net of tax. Under the typical payment terms of our customer contracts, the customer pays at periodic
intervals (e.g., every 15 days, 30 days, 45 days, etc.) for shipments included on invoices received. It is not customary business practice
intervals (e.g., every 15 days, 30 days, 45 days, etc.) for shipments included on invoices received. It is not customary business practice
to extend payment terms past 90 days, and as such, we do not have a practice of including a significant financing component within
to extend payment terms past 90 days, and as such, we do not have a practice of including a significant financing component within
our revenue contracts with customers.
our revenue contracts with customers.

from customers in an amount that corresponds directly with the value to the customers of our performance completed to date, and as

Disaggregation of Revenue
Disaggregation of Revenue

See Note 15 for disclosure of disaggregated revenue for the periods ended May 31. This presentation is consistent with how we
See Note 15 for disclosure of disaggregated revenue for the periods ended May 31. This presentation is consistent with how we
organize our segments internally for making operating decisions and measuring performance.
organize our segments internally for making operating decisions and measuring performance.

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FEDEX CORPORATION
FEDEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEDEX CORPORATION

CREDIT RISK. We routinely grant credit to many of our customers for transportation and business services without collateral. The
CREDIT RISK. We routinely grant credit to many of our customers for transportation and business services without collateral. The
risk of credit loss in our trade receivables is substantially mitigated by our credit evaluation process, short collection terms and sales to
risk of credit loss in our trade receivables is substantially mitigated by our credit evaluation process, short collection terms and sales to
a large number of customers, as well as the low revenue per transaction for most of our services. Allowances for potential credit losses
a large number of customers, as well as the low revenue per transaction for most of our services. Allowances for potential credit losses
are determined based on historical experience and the impact of current economic conditions. Historically, credit losses have been
are determined based on historical experience and the impact of current economic conditions. Historically, credit losses have been
within management’s expectations.
within management’s expectations.

ADVERTISING. Advertising and promotion costs are expensed as incurred and are classified in other operating expenses. Advertising
ADVERTISING. Advertising and promotion costs are expensed as incurred and are classified in other operating expenses. Advertising
and promotion expenses were $428 million in 2021, $427 million in 2020 and $468 million in 2019.
and promotion expenses were $428 million in 2021, $427 million in 2020 and $468 million in 2019.

CASH EQUIVALENTS. Cash in excess of current operating requirements is invested in short-term, interest-bearing instruments with
CASH EQUIVALENTS. Cash in excess of current operating requirements is invested in short-term, interest-bearing instruments with
maturities of three months or less at the date of purchase and is stated at cost, which approximates market value.
maturities of three months or less at the date of purchase and is stated at cost, which approximates market value.

SPARE PARTS, SUPPLIES AND FUEL. Spare parts (principally aircraft-related) are reported at weighted-average cost. Allowances
SPARE PARTS, SUPPLIES AND FUEL. Spare parts (principally aircraft-related) are reported at weighted-average cost. Allowances
for obsolescence are provided for spare parts currently identified as excess or obsolete as well as expected to be on hand at the date the
for obsolescence are provided for spare parts currently identified as excess or obsolete as well as expected to be on hand at the date the
aircraft are retired from service. These allowances are provided over the estimated useful life of the related aircraft and engines. The
aircraft are retired from service. These allowances are provided over the estimated useful life of the related aircraft and engines. The
majority of our supplies and fuel are reported at weighted-average cost.
majority of our supplies and fuel are reported at weighted-average cost.

segment in 2020.

PROPERTY AND EQUIPMENT. Expenditures for major additions, improvements and flight equipment modifications are capitalized
PROPERTY AND EQUIPMENT. Expenditures for major additions, improvements and flight equipment modifications are capitalized
when such costs are determined to extend the useful life of the asset or are part of the cost of acquiring the asset. Expenditures for
when such costs are determined to extend the useful life of the asset or are part of the cost of acquiring the asset. Expenditures for
equipment overhaul costs of engines or airframes prior to their operational use are capitalized as part of the cost of such assets as they
equipment overhaul costs of engines or airframes prior to their operational use are capitalized as part of the cost of such assets as they
are costs required to ready the asset for its intended use. Maintenance and repairs costs are charged to expense as incurred, except for
are costs required to ready the asset for its intended use. Maintenance and repairs costs are charged to expense as incurred, except for
certain aircraft engine maintenance costs incurred under third-party service agreements. These agreements result in costs being
certain aircraft engine maintenance costs incurred under third-party service agreements. These agreements result in costs being
expensed based on cycles or hours flown and are subject to annual escalation. These service contracts transfer risk to third-party
expensed based on cycles or hours flown and are subject to annual escalation. These service contracts transfer risk to third-party
service providers and generally fix the amount we pay for maintenance to the service provider as a rate per cycle or flight hour, in
service providers and generally fix the amount we pay for maintenance to the service provider as a rate per cycle or flight hour, in
exchange for maintenance and repairs under a predefined maintenance program. We capitalize certain direct internal and external
exchange for maintenance and repairs under a predefined maintenance program. We capitalize certain direct internal and external
costs associated with the development of internal-use software, including implementation of cloud computing service arrangements.
costs associated with the development of internal-use software, including implementation of cloud computing service arrangements.
Gains and losses on sales of property used in operations are classified within operating expenses and historically have been nominal.
Gains and losses on sales of property used in operations are classified within operating expenses and historically have been nominal.

For financial reporting purposes, we record depreciation and amortization of property and equipment on a straight-line basis over the
For financial reporting purposes, we record depreciation and amortization of property and equipment on a straight-line basis over the
asset’s service life or related lease term, if shorter. For income tax purposes, depreciation is computed using accelerated methods when
asset’s service life or related lease term, if shorter. For income tax purposes, depreciation is computed using accelerated methods when
applicable.
applicable.

The depreciable lives and net book value of our property and equipment are as follows (dollars in millions):
The depreciable lives and net book value of our property and equipment are as follows (dollars in millions):

Wide-body aircraft and related equipment
Wide-body aircraft and related equipment
Narrow-body and feeder aircraft and related equipment
Narrow-body and feeder aircraft and related equipment
Package handling and ground support equipment
Package handling and ground support equipment
Information technology
Information technology
Vehicles and trailers
Vehicles and trailers
Facilities and other
Facilities and other

Range
Range

15 to 30 years $
15 to 30 years $
5 to 30 years
5 to 30 years
3 to 30 years
3 to 30 years
2 to 10 years
2 to 10 years
3 to 15 years
3 to 15 years
2 to 40 years
2 to 40 years

Net Book Value at May 31,
Net Book Value at May 31,
2020
2021
2020
2021

14,812 $
14,812 $
2,307
2,307
5,269
5,269
1,863
1,863
4,033
4,033
7,468
7,468

13,448
13,448
2,478
2,478
4,499
4,499
1,795
1,795
4,345
4,345
7,043
7,043

Substantially all property and equipment have no material residual values. The majority of aircraft costs are depreciated on a straight-
Substantially all property and equipment have no material residual values. The majority of aircraft costs are depreciated on a straight-
line basis over 15 to 30 years. We periodically evaluate the estimated service lives and residual values used to depreciate our property
line basis over 15 to 30 years. We periodically evaluate the estimated service lives and residual values used to depreciate our property
and equipment.
and equipment.

Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations, was $3.8
Depreciation and amortization expense, excluding gains and losses on sales of property and equipment used in operations, was $3.8
billion in 2021, $3.6 billion in 2020 and $3.4 billion in 2019. Depreciation and amortization expense includes amortization of assets
billion in 2021, $3.6 billion in 2020 and $3.4 billion in 2019. Depreciation and amortization expense includes amortization of assets
under finance leases.
under finance leases.

CAPITALIZED INTEREST. Interest on funds used to finance the acquisition and modification of aircraft, including purchase deposits,
CAPITALIZED INTEREST. Interest on funds used to finance the acquisition and modification of aircraft, including purchase deposits,
construction of certain facilities and development of certain software up to the date the asset is ready for its intended use, is capitalized
construction of certain facilities and development of certain software up to the date the asset is ready for its intended use, is capitalized
and included in the cost of the asset if the asset is actively under construction. Capitalized interest was $68 million in 2021, $54
and included in the cost of the asset if the asset is actively under construction. Capitalized interest was $68 million in 2021, $54
million in 2020 and $64 million in 2019.
million in 2020 and $64 million in 2019.

IMPAIRMENT OF LONG-LIVED ASSETS. Long-lived assets are reviewed for impairment when circumstances indicate the carrying

value of an asset may not be recoverable. For assets that are to be held and used, an impairment is recognized when the estimated

undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an

adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair

value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as

applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.

We operate integrated transportation networks so cash flows for most of our operating assets to be held and used are assessed at a

network level, not at an individual asset level, for our analysis of impairment.