FedEx (FDX) Financial History

•disruptions in global supply chains, which can limit the access of Federal Express and our service providers to vehicles and other key capital resources and increase our costs;

•the effect of technology developments (including AI and machine learning) on our operations and on demand for our services, and our ability to continue to identify and eliminate unnecessary information-technology red…

Our business is subject to complex and evolving United States and foreign laws and regulations regarding data protection and cybersecurity, which impose significant costs and regulatory risks that are likely to increa…

Government regulation and enforcement are evolving and unfavorable changes could harm our business.

We may be affected by harsh weather conditions, natural disasters, conflicts or other unrest, or other terrorist or other physical attacks, and our ability to quickly and effectively restore operations following adver…

There is no assurance that we will be able to successfully execute our strategies and achieve or demonstrate progress on our calendar 2040 goal of carbon neutrality for our global operations.

We may be unable to achieve or demonstrate progress on our goal of carbon neutrality for our global operations by calendar 2040.

Increasing costs, the volatility of costs and funding requirements, and other legal mandates for employee benefits, especially pension and healthcare benefits, could materially and adversely affect our results of oper…

Potential changes to pilot flight and duty time regulations could impair our operations and impose substantial costs on us.

We contract with service providers to conduct certain linehaul and pickup-and-delivery operations, and the status of these service providers as direct and exclusive employers of drivers providing these services is bei…

Our inability to effectively meet our labor and purchased transportation needs can increase our costs, hinder our ability to execute our business strategy, negatively affect service levels, and could materially and ad…

Our failure to attract and retain employee talent, meet our purchased transportation needs, or maintain our company culture, as well as increases in labor and purchased transportation costs, could materially and adver…

Labor unions have continued to make attempts to organize employees at businesses and in industries that have not traditionally been unionized, and in certain instances have been successful.

Labor-related disruptions and potential changes in labor laws may materially and adversely affect our business, financial condition, cash flows, and results of operations.

Acquisitions and other strategic transactions involve special commercial, customer, accounting, regulatory, compliance, information technology, human resources, cultural, and other risks, including the potential assum…

New and emerging technologies continue to create additional sources of competition, and if we fail to incorporate new and emerging technologies as effectively as our competitors, our competitive position may be harmed.

We believe we compete effectively with these companies - for example, by providing more reliable service at compensatory prices.

With the rapid growth in the use of AI and the global influence of social media outlets such as Facebook, YouTube, Instagram, X, TikTok, and other platforms, adverse publicity, whether warranted or not, can be dissemi…

Such initiatives and enhancements may require us to make significant capital expenditures or incur significant expenses.

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.

To the extent a widespread outbreak of an illness or any other communicable disease or public health crisis adversely affects our business and financial results, it may also have the effect of heightening many other r…

The effects of a widespread outbreak of an illness or any other communicable disease or public health crisis could materially and adversely affect our business, results of operations, cash flows, and financial condition.

Failure of third-party service providers, vendors, and suppliers to perform as expected, or disruptions in our relationships with such third parties or their provision of services to FedEx, could materially and advers…

The transportation infrastructure continues to be a target of terrorist activities.

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.

Additionally, we and our third-party service providers, vendors, and suppliers have experienced repeated attempts, some of which have been successful, by cyber criminals to gain access to customer accounts for the pur…

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-…

Furthermore, we are subject to an increasing number of cybersecurity compliance and reporting obligations in different jurisdictions that vary in their scope and application, creating conflicting reporting requirements.

We also depend on and interact with the technology and systems of third parties for a variety of reasons, including AI-enabled technologies, encryption and authentication technology, employee email, and other communic…

We are subject to risks imposed by data breaches and operational disruptions, both random and targeted, including through cyberattack or cyber-intrusion, ransomware attack, malware attack, or denial-of-service attack…

We may be unable to achieve the expected operational efficiencies and network flexibility, alignment of our cost base with demand, cost savings and reductions to our permanent cost structure, and other benefits from o…

•managing unforeseen increased expenses or delays associated with the transformation process.

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

The failure to successfully execute our transformation initiatives in the expected time frame and at the expected cost may materially and adversely affect our future results.

Our transportation businesses and their profitability are affected by the price and availability of jet and vehicle fuel, as well as our ability to collect fuel surcharges.

Additionally, the U.S.

Additional changes in international trade policies, including tariffs, and relations could significantly reduce the volume of goods transported globally, increase our costs, and materially and adversely affect our bus…

hostilities in the Middle East, may materially and adversely affect our business and results of operations.

The decline in U.S.

We are directly affected by the state of the global economy and geopolitical developments.

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, reputation, operating results (including component…

•our ability to mitigate the technological, operational, legal and regulatory, and reputational risks related to autonomous technology and artificial intelligence;

under the caption “Regulation.” Additionally, in light of the recently held elections in the United States and various international jurisdictions and recent executive orders in the United States, there is considerabl…

We may be unable to achieve or demonstrate progress on our goal of carbon neutrality for our global operations by calendar 2040.

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.

could negatively affect our financial condition and results of operations.

To the extent challenges related to the planned spin-off of NewCo adversely affect our business, they may also have the effect of heightening other risks disclosed in our Annual Report, any of which could materially a…

operations, cash flows, effective tax rate, and other financial and operating metrics of each company may be subject to increased volatility; and the ability of each company to fund capital expenditures and investment…

If the planned spin-off occurs, FedEx and NewCo will each be smaller, less diversified companies with more concentrated areas of focus.

There can be no assurance that the spin-off, if completed, will achieve the intended financial and strategic benefits (which are based on a number of assumptions, some or all of which may prove to be incorrect) or pro…

•potential negative reactions from investors and other external stakeholders.

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

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

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

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

•costs and expenses related to the planned spin-off (which are expected to be significant), including costs related to commercial and operational dis-synergies; restructuring and other transaction expenses; expenses r…

•the risk that if the IRS determines that certain steps of the planned spin-off do not qualify for tax-free treatment for U.S.

•our ability to maintain operational, commercial, data and information technology, brand and intellectual property, human resources, finance, legal, sales, and marketing continuity where necessary between FedEx and Ne…

•our ability to maintain NewCo’s continued support of our DRIVE transformation, Network 2.0, Tricolor, and other strategic initiatives;

•the diversion of the attention of our Board of Directors and senior management from the pursuit of our business strategy and long-term planning and of our management and employees from day-to-day operations;

The planned spin-off of FedEx Freight may not be completed on the terms or timeline currently contemplated, if at all, and there is no guarantee that the spin-off, if completed, will achieve the intended financial and…

Failure to complete the adjustment of our air network to remove costs related to services previously provided to the United States Postal Service (“USPS”) could adversely affect our profitability.

relationships with FedEx.

Given the current claims environment, the amount of coverage available from excess insurance carriers is decreasing, the premiums for this excess coverage are increasing significantly, and excess insurance carriers ar…

Our security processes and initiatives may be unable to detect or prevent a breach or disruption in the future.

users of its applications.

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.

•mitigating the potential distraction and diversion of resources and of management’s time and attention associated with the planned spin-off of FedEx Freight.

•managing the movement of certain positions to different locations;

•addressing possible differences in business backgrounds, corporate cultures, and management philosophies;

•integrating and unifying the offerings and services available to FedEx customers;

materially and adversely affect our business, reputation, results of operations, cash flows, and financial condition.

defending the status of service providers as direct and exclusive employers of their drivers.

In connection with the Spin-Off, we experienced and continue to experience changes in personnel and management that may involve organizational disruption and uncertainty.

unionized, we may be subject to actual or threatened strikes, work interruptions or stoppages, which could materially and adversely affect our business, financial condition, cash flows, and results of operations.

Even if the regulatory approvals are obtained, other conditions are met, and our commercial arrangements with InPost are finalized, there can be no assurance that our investment and the commercial agreements will achi…

Because InPost would continue to operate as a standalone company and we would not control this entity and must rely on the actions of other investors and the management of the entity, we may not be able to influence k…

We may not achieve the expected strategic or financial benefits relating to our InPost investment.

will not take a contrary position with respect to the conclusions reached in the tax opinion.

The Spin-Off could result in substantial tax liability to us and our stockholders.

In addition, we retained an equity interest in FedEx Freight in connection with the Spin-Off.

In connection with the Spin-Off, we and FedEx Freight entered into various agreements that provide for the performance of certain services by each company for the benefit of the other, including a separation and distr…

We may not realize the anticipated benefits from the Spin-Off, which could harm our business.

We may not be able to achieve our calendar 2029 financial performance targets.

We are increasingly utilizing AI within our operations.

Although we do not believe the cyber incidents and other systems disruptions that we and our third-party service providers have experienced to date have had a material effect on our business, there is no guarantee tha…

A significant data breach or other disruption to our technology infrastructure could disrupt our operations and result in the loss of critical sensitive or confidential information, adversely affecting our reputation,…

•managing the closure and consolidation of certain buildings and the movement of certain positions, functions, or work to different locations or to third party vendors;

Moreover, given the nature of our business and our global operations, political, economic, and other conditions in foreign countries and regions, including international taxes, government-to-government relations, the…