Introduces Fiscal 2025 Outlook, Including $2.2 Billion of DRIVE Cost Savings

Conducting an Assessment of the Role of FedEx Freight in Value-Creation Plans

Returned $3.8 Billion to Stockholders Through Stock Repurchases and Dividends During Fiscal 2024

FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the quarter ended May 31 (adjusted measures exclude the items listed below for the applicable fiscal year):

This year’s and last year’s quarterly and full-year consolidated results have been adjusted for:

Fourth quarter revenue increased modestly versus the prior year period. Operating income and margin improved, reflecting lower structural costs as the company continued to execute on its DRIVE program.

“We made significant progress in fiscal 2024 and ended the year strong, delivering four consecutive quarters of expanding operating income and margin in a challenging revenue environment,” said Raj Subramaniam, FedEx Corp. president and chief executive officer. “These results are unprecedented in this current environment, reflecting our continued execution of our DRIVE initiatives and our resolve to transform FedEx while we deliver outstanding service to our customers. We expect this momentum to continue in fiscal 2025 as we advance our efforts to create the world’s most flexible, efficient, and intelligent network.”

FedEx Ground operating results increased due to reduced structural costs resulting from DRIVE initiatives, increased yield, lower self-insurance costs, and growth in ground commercial volume.

FedEx Freight operating results increased due to higher yield and effective cost management. FedEx Freight has announced plans to further optimize its operations and match capacity with demand through the planned permanent closure of seven facilities.

FedEx Express operating results declined primarily due to lower international yields, partially offset by reduced structural costs from DRIVE initiatives and higher U.S. domestic package yields. During the quarter, FedEx Express permanently retired certain aircraft and related engines as part of its fleet modernization program.

Fourth quarter results include a noncash impairment charge of $157 million ($0.48 per diluted share) from the decision to permanently retire 22 Boeing 757-200 aircraft and seven related engines as the company continues to modernize its air fleet, improve its global network efficiency, and better align air network capacity with current and anticipated demand. Last year's fourth quarter results included a noncash impairment charge of $70 million ($0.21 per diluted share) from the decision to permanently retire 18 aircraft and 34 related engines, and $47 million ($0.17 per diluted share) of goodwill and other asset impairment charges related to the ShopRunner acquisition.

Fourth quarter results include an income tax expense of $54 million ($0.22 per diluted share) from the remeasurement of U.S. state deferred income tax balances related to the merger of FedEx Ground and FedEx Services into Federal Express Corporation. Last year's fourth quarter results included a tax expense of $46 million ($0.18 per diluted share) from a revaluation of certain foreign tax assets.

Full-Year Results

For the full fiscal year, FedEx Corp. reported the following consolidated results (adjusted measures exclude the items listed above for the applicable fiscal year):

Capital spending for fiscal 2024 was $5.2 billion, down 16% from $6.2 billion in fiscal 2023.

Capital Returns

During fiscal 2024, FedEx returned approximately $3.8 billion to stockholders through the combination of $2.5 billion of stock repurchases and $1.3 billion of dividend payments. Repurchases during fiscal 2024 totaled approximately 9.8 million shares or 3.9% of the shares outstanding at the beginning of the year, and increased fourth quarter and full-year earnings by $0.21 and $0.34 per share, respectively. As of May 31, 2024, $5.1 billion remained under the existing stock repurchase authorizations.

For fiscal 2025, FedEx expects to repurchase $2.5 billion of FedEx common stock, including $1.0 billion during the first fiscal quarter, and previously announced a 10% increase ($0.48 per share) in the annual dividend rate on its common stock to $5.52 per share.

“As we advance our transformation, we continue to focus on reducing structural costs and lowering the capital intensity of the business,” said John Dietrich, FedEx Corp. executive vice president and chief financial officer. “Improved earnings and enhanced capital discipline enabled us to return $3.8 billion to stockholders during fiscal 2024 while prudently investing in our business and maintaining a strong balance sheet.”

Outlook

FedEx is unable to forecast the fiscal 2025 MTM retirement plans accounting adjustments. As a result, FedEx is unable to provide a fiscal 2025 earnings per share or effective tax rate (ETR) outlook on a GAAP basis and is relying on the exemption provided by the Securities and Exchange Commission (SEC). It is reasonably possible that the fiscal 2025 MTM retirement plans accounting adjustments could have a material effect on fiscal 2025 consolidated financial results and ETR.

For fiscal 2025, FedEx is forecasting:

• A low-to-mid single-digit percent revenue growth year over year;
• Earnings per diluted share of $18.25 to $20.25 before the MTM retirement plans accounting adjustments and $20.00 to $22.00 after also excluding costs related to business optimization initiatives;
• Permanent cost reductions from the DRIVE transformation program of $2.2 billion;
• ETR of approximately 24.5% prior to the MTM retirement plans accounting adjustments; and
• Capital spending of $5.2 billion, with a priority on investments in network optimization and efficiency improvement, including fleet and facility modernization and automation.

These forecasts assume the company's current economic forecast and fuel price expectations, successful completion of the planned stock repurchases, and no additional adverse economic or geopolitical developments. FedEx’s ETR and earnings per share forecasts are based on current law and related regulations and guidance.

With the recent completion of the FY25 planning process, FedEx has turned its focus to the next phase of its long-term stockholder value-creation plans. As a part of this work, FedEx management and Board of Directors are conducting an assessment of the role of FedEx Freight in the company’s portfolio structure and potential steps to further unlock sustainable shareholder value. The company is committed to completing this review thoroughly and deliberately, by the end of the calendar year. FedEx will conduct this assessment while continuing to focus on customers, team members, and the safety of its operations.

Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenue of $88 billion, the company offers integrated business solutions utilizing its flexible, efficient, and intelligent global network. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 500,000 employees to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. FedEx is committed to connecting people and possibilities around the world responsibly and resourcefully, with a goal to achieve carbon-neutral operations by 2040. To learn more, please visit fedex.com/about.

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs, Form 8-Ks and Statistical Books. These materials, as well as a webcast of the earnings release conference call to be held at 5:00 p.m. EDT on June 25, are available on the company’s website at investors.fedex.com. A replay of the conference call webcast will be posted on our website following the call.

The Investor Relations page of our website, investors.fedex.com, contains a significant amount of information about FedEx, including our Securities and Exchange Commission filings and financial and other information for investors. The information that we post on our Investor Relations website could be deemed to be material information. We encourage investors, the media and others interested in the company to visit this website from time to time, as information is updated and new information is posted.

Certain statements in this press release may be considered forward-looking statements, such as statements regarding expected cost savings, the optimization of our network through Network 2.0, future financial targets, business strategies, management’s views with respect to future events and financial performance, and the assumptions underlying such expected cost savings, targets, strategies, and statements. Forward-looking statements include those preceded by, followed by or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “forecasts,” “anticipates,” “plans,” “estimates,” “targets,” “projects,” “intends” or similar expressions. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate; our ability to successfully implement our business strategy and global transformation program and optimize our network through Network 2.0, effectively respond to changes in market dynamics, and achieve the anticipated benefits of such strategies and actions; our ability to achieve our cost reduction initiatives and financial performance goals; the timing and amount of any costs or benefits or any specific outcome, transaction, or change (of which there can be no assurance), or the terms, timing, and structure thereof, related to our global transformation program and other ongoing reviews and initiatives; damage to our reputation or loss of brand equity; our ability to adjust our air network to remove costs related to services currently provided to the U.S. Postal Service ("USPS") under the contract for Federal Express Corporation to provide the USPS domestic transportation services, or a decision by the USPS to terminate the agreement early; our ability to meet our labor and purchased transportation needs while controlling related costs; a significant data breach or other disruption to our technology infrastructure; the impact of a widespread outbreak of an illness or any other communicable disease or public health crises; anti-trade measures and additional changes in international trade policies and relations; the effect of any international conflicts or terrorist activities, including as a result of the current conflicts between Russia and Ukraine and in the Middle East; changes in fuel prices or currency exchange rates, including significant increases in fuel prices as a result of the ongoing conflicts between Russia and Ukraine and in the Middle East and other geopolitical and regulatory developments; our ability to match capacity to shifting volume levels; the effect of intense competition; an increase in self-insurance accruals and expenses; failure to receive or collect expected insurance coverage; our ability to effectively operate, integrate, leverage, and grow acquired businesses and realize the anticipated benefits of acquisitions and other strategic transactions; noncash impairment charges related to our goodwill and certain deferred tax assets; the future rate of e-commerce growth and levels of inventory restocking; passenger airline cargo capacity; evolving or new U.S. domestic or international laws and government regulations, policies, and actions; future guidance, regulations, interpretations, challenges, or judicial decisions related to our tax positions; legal challenges or changes related to service providers contracted to conduct certain linehaul and pickup-and-delivery operations and the drivers providing services on their behalf and the coverage of U.S. employees at Federal Express Corporation under the Railway Labor Act of 1926, as amended; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; any liability resulting from and the costs of defending against litigation; our ability to achieve our goal of carbon-neutral operations by 2040; and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and FedEx Corp.’s filings with the SEC. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

The financial section of this release is provided on the company's website at investors.fedex.com.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

TO GAAP FINANCIAL MEASURES

Fourth Quarter and Full-Year Fiscal 2024 and Fiscal 2023 Results

The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or “reported”). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAAP (or “adjusted”) financial measures, including our adjusted fourth quarter and adjusted full-year fiscal 2024 and 2023 consolidated operating income and margin, net income and diluted earnings per share; adjusted fourth quarter and adjusted full-year fiscal 2024 and 2023 FedEx Express segment operating income and margin; and adjusted fourth quarter and adjusted full-year fiscal 2024 FedEx Ground segment operating income and margin. These financial measures have been adjusted to exclude the impact of the following items (as applicable):

• MTM retirement plans accounting adjustments in fiscal 2024 and 2023;
• Business optimization costs incurred in fiscal 2024 and 2023;
• Goodwill and other asset impairment charges incurred in fiscal 2024 and 2023;
• Remeasurement of state deferred income taxes under the one FedEx structure in fiscal 2024;
• Insurance recoveries related to a FedEx Ground legal matter received in fiscal 2024, and costs related to a separate FedEx Ground legal matter incurred in fiscal 2023; and
• Business realignment costs incurred in fiscal 2023.

In fiscal 2023, FedEx announced DRIVE, a comprehensive program to improve the company’s long-term profitability. This program includes a business optimization plan to drive efficiency among our transportation segments, lower our overhead and support costs, and transform our digital capabilities. We incurred costs associated with our business optimization initiatives in fiscal 2024 and fiscal 2023. These costs were primarily related to professional services and severance. Additionally, we incurred costs associated with our business realignment activities in connection with the FedEx Express workforce reduction plan in Europe announced in January 2021 in fiscal 2023.

Costs related to business optimization initiatives and business realignment activities, as well as MTM retirement plans accounting adjustments, goodwill and other asset impairment charges, costs related to a FedEx Ground legal matter, and insurance recoveries related to accrued pre- and post-judgment interest incurred in connection with a separate FedEx Ground legal matter in fiscal 2022 are excluded from our fourth quarter and full-year fiscal 2024 and 2023 consolidated and FedEx Express and FedEx Ground segment non-GAAP financial measures, as applicable, because they are unrelated to our core operating performance and/or to assist investors with assessing trends in our underlying businesses. The charges incurred in connection with a FedEx Ground legal matter in fiscal 2023 are extraordinary in nature and do not represent a recurring expense arising in our ordinary course of business.

An income tax expense related to the remeasurement of U.S. state deferred income tax balances in connection with the merger of FedEx Ground and FedEx Services into Federal Express Corporation pursuant to our one FedEx consolidation is excluded from our fourth quarter and full-year fiscal 2024 consolidated non-GAAP financial measures because it results from the non-recurring impact of the one FedEx consolidation on our overall deferred tax position, which accumulated over many prior reporting periods. The adjustment to our fourth quarter and full-year fiscal 2024 consolidated financial measures includes only the transitional impact related to the one FedEx consolidation.

We believe these adjusted financial measures facilitate analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of, or are unrelated to, the company’s and our business segments’ core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. These adjustments are consistent with how management views our businesses. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating the company’s and each business segment’s ongoing performance.

Our non-GAAP financial measures are intended to supplement and should be read together with, and are not an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of our financial statements should not place undue reliance on these non-GAAP financial measures. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. As required by SEC rules, the tables below present a reconciliation of our presented non-GAAP financial measures to the most directly comparable GAAP measures.

Fiscal 2025 Earnings Per Share and Effective Tax Rate Forecasts

Our fiscal 2025 earnings per share (EPS) forecast is a non-GAAP financial measure because it excludes fiscal 2025 MTM retirement plans accounting adjustments and estimated costs related to business optimization initiatives in fiscal 2025. Our fiscal 2025 effective tax rate (ETR) forecast is a non-GAAP financial measure because it excludes the effect of fiscal 2025 MTM retirement plans accounting adjustments.

We have provided these non-GAAP financial measures for the same reasons that were outlined above for historical non-GAAP measures. Costs related to business optimization initiatives are excluded from our fiscal 2025 EPS forecast for the same reasons described above for historical non-GAAP measures.

We are unable to predict the amount of the MTM retirement plans accounting adjustments, as they are significantly affected by changes in interest rates and the financial markets, so such adjustments are not included in our fiscal 2025 EPS and ETR forecasts. For this reason, a full reconciliation of our fiscal 2025 EPS and ETR forecasts to the most directly comparable GAAP measures is impracticable. It is reasonably possible, however, that our fiscal 2025 MTM retirement plans accounting adjustments could have a material effect on our fiscal 2025 consolidated financial results and ETR.

The table included below titled “Fiscal 2025 Earnings Per Share Forecast” outlines the effects of the items that are excluded from our fiscal 2025 EPS forecast, other than the MTM retirement plans accounting adjustments.

Fourth Quarter Fiscal 2024

FedEx Corporation

FedEx Express Segment

FedEx Ground Segment

Full-Year Fiscal 2024

FedEx Corporation

FedEx Express Segment

FedEx Ground Segment

Fourth Quarter Fiscal 2023

FedEx Corporation

FedEx Express Segment

Full-Year Fiscal 2023

FedEx Corporation

Full-Year Fiscal 2023

FedEx Express Segment

Fiscal 2025 Earnings Per Share Forecast

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