FEDEX CORP

Previous wording

In June 2024, we announced that FedEx’s management and Board of Directors are conducting an assessment of the role of FedEx Freight in the company’s portfolio structure.

Current wording

In June 2024, we announced that FedEx’s management and Board of Directors were conducting an assessment of the role of FedEx Freight in the company’s portfolio structure. On December 19, 2024, we announced that the Board of Directors concluded that assessment and decided to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company. The transaction is expected to qualify as a tax-free separation for U.S. federal income tax purposes for FedEx stockholders and be executed within the next 18 months. See Part II, Item 1A. “Risk Factors –The planned separation of FedEx Freight may not be completed on the terms or timeline currently contemplated, if at all, and there is no guarantee that the separation, if completed, will achieve the intended financial and strategic benefits.”

Previous wording

While macroeconomic risks apply to most companies, we are particularly vulnerable. The transportation industry is highly cyclical and especially susceptible to trends in economic activity. Our primary business is to transport goods, so our business levels are directly tied to the purchase and production of goods and the rate of global trade growth. The decline in U.S. imports of consumer goods that started in late 2022, along with slowed global industrial production, has contributed to weakened economic conditions for the transportation industry. Consequently, this environment has led to lower shipments at FedEx Freight and pressured package and freight volumes and yields at Federal Express, negatively affecting our results in the first quarter of 2025.

Current wording

While macroeconomic risks apply to most companies, we are particularly vulnerable. The transportation industry is highly cyclical and especially susceptible to trends in economic activity. Our primary business is to transport goods, so our business levels are directly tied to the purchase and production of goods and the rate of global trade growth. The decline in U.S. imports of consumer goods that started in late 2022, along with slowed global industrial production, has contributed to weakened economic conditions for the transportation industry. Consequently, this environment has led to lower shipments at FedEx Freight and pressured package and freight volumes at Federal Express, negatively affecting our results in the second quarter and first half of 2025. Additionally, the incoming U.S. presidential administration has indicated a desire to significantly increase the rates and broaden the scope of tariffs imposed on goods imported into the U.S.

Previous wording

During the first quarter 2025, global inflation decelerated year-over-year but continues to be above historical levels. Additionally, global interest rates remained elevated in an effort to curb inflation. We are experiencing pressure on demand for our transportation services, particularly our priority services, as elevated inflation and interest rates are negatively affecting consumer and business spending. We expect inflation and high interest rates to continue to negatively affect our results of operations for the remainder of 2025.

Current wording

During the second quarter and first half of 2025, global inflation decelerated year-over-year but continues to be above historical levels. Additionally, global interest rates remained elevated in an effort to curb inflation. We are experiencing pressure on demand for our transportation services, particularly our priority services, as elevated inflation and interest rates are negatively affecting consumer and business spending. We expect inflation and high interest rates to continue to negatively affect our results of operations for the remainder of 2025.

Previous wording

We must purchase large quantities of fuel to operate our aircraft and vehicles, and the price and availability of fuel is beyond our control and can be highly volatile. The timing and amount of fluctuations in fuel prices and our ability to recover incremental fuel costs through our fuel surcharges can significantly affect our operating results either positively or negatively in the short-term. During the first quarter of 2025, lower fuel prices negatively affected yields through fuel surcharges at our FedEx Freight segment and reduced fuel expense at both of our transportation segments. However, fuel surcharges had a positive effect at Federal Express in the first quarter of 2025.

Current wording

We must purchase large quantities of fuel to operate our aircraft and vehicles, and the price and availability of fuel is beyond our control and can be highly volatile. The timing and amount of fluctuations in fuel prices and our ability to recover incremental fuel costs through our fuel surcharges can significantly affect our operating results either positively or negatively in the short-term. During the second quarter and first half of 2025, lower fuel prices negatively affected yields through lower fuel surcharges and reduced fuel expense at both of our transportation segments.

Previous wording

The following tables compare summary operating results and changes in revenue and operating income (loss) (dollars in millions, except per share amounts) for the three-month periods ended August 31:

Current wording

The following tables compare summary operating results and changes in revenue and operating income (loss) (dollars in millions, except per share amounts) for the periods ended November 30:

Previous wording

Operating income in the first quarter of 2025 includes expenses of $128 million ($98 million, net of tax, or $0.39 per diluted share) associated with our business optimization strategy to drive efficiency and lower our overhead and support costs. We recognized $105 million ($81 million, net of tax, or $0.32 per diluted share) of expenses in the first quarter of 2024 under this program. See the “Business Optimization Costs” section of this MD&A for more information.

Current wording

Operating income includes expenses of $326 million ($249 million, net of tax, or $1.02 per diluted share) in the second quarter and $454 million ($347 million, net of tax, or $1.41 per diluted share) in the first half of 2025 associated with our business optimization strategy to drive efficiency and lower our overhead and support costs. We recognized $145 million ($110 million, net of tax, or $0.44 per diluted share) of expenses in the second quarter and $250 million ($191 million, net of tax, or $0.75 per diluted share) in the first half of 2024 under this program. See the “Business Optimization Costs” section of this MD&A for more information.

Previous wording

We completed accelerated share repurchase (“ASR”) transactions with two banks during the first quarter of 2025 to repurchase an aggregate of $1 billion of FedEx common stock. Share repurchases had a benefit of $0.03 per diluted share for the first quarter of 2025. As of August 31, 2024, $4.1 billion remained available to be used for repurchases under the 2024 stock repurchase program. See Note 1 of the accompanying unaudited condensed consolidated financial statements, “Financial Condition – Liquidity and – Liquidity Outlook” below, and Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” of this Form 10-Q for additional information.

Current wording

We repurchased an aggregate of $1.0 billion of our common stock through accelerated share repurchase (“ASR”) transactions with two banks and open market transactions during the second quarter of 2025. During the six-month period ended November 30, 2024, we repurchased 7.1 million shares of FedEx common stock through ASR and open market transactions at an average price of $283.13 per share for a total of $2.0 billion. Share repurchases had a benefit of $0.07 per diluted share for the second quarter and $0.10 per diluted share for the first half of 2025. As of November 30, 2024, $3.1 billion remained available to be used for repurchases under the 2024 stock repurchase program. See Note 1 of the accompanying unaudited condensed consolidated financial statements, “Financial Condition – Liquidity and – Liquidity Outlook” below, and Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” of this Form 10-Q for additional information.

Previous wording

Revenue decreased slightly in the first quarter primarily due to one fewer operating day at both of our transportation segments and reduced demand surcharges at Federal Express, partially offset by base yield improvement at both our transportation segments and higher fuel surcharges at Federal Express.

Current wording

Revenue decreased 1% in the second quarter and first half of 2025 primarily due to lower volume and fuel surcharges, partially offset by base yield improvement, at both of our transportation segments. Additionally, revenue during the first half of 2025 was negatively affected by one fewer operating day at both of our transportation segments and reduced demand surcharges at Federal Express.

Previous wording

Federal Express revenue decreased 1% in the first quarter primarily due to one fewer operating day, lower priority package volume, and reduced demand surcharges, partially offset by increased deferred package volume, base yields, and fuel surcharges. FedEx Freight revenue decreased 2% in the first quarter primarily due to lower shipments and one fewer operating day, partially offset by yield improvement. Revenue at Corporate, other, and eliminations increased in the first quarter primarily due to higher yields and volume at FedEx Logistics, Inc. (“FedEx Logistics”).

Current wording

Federal Express segment revenue was flat in the second quarter and first half of 2025 primarily due to increased deferred package volume and improved base yields, partially offset by lower priority package volume, the expiration on September 29, 2024 of our contract with the U.S. Postal Service (“USPS”) to provide the USPS domestic transportation services, and reduced fuel surcharges. Federal Express revenue for the first half of 2025 was also negatively affected by one fewer operating day and reduced demand surcharges. FedEx Freight revenue decreased 11% in the second quarter and 7% in the first half of 2025 primarily due to lower shipments, fuel surcharges, and weight per shipment, partially offset by base yield improvement. FedEx Freight revenue for the first half of 2025 was also negatively affected by one fewer operating day. Revenue at Corporate, other, and eliminations increased in the second quarter and first half of 2025 primarily due to higher yields and volume at FedEx Logistics, Inc. (“FedEx Logistics”).

Previous wording

The following table compares operating expenses expressed as dollar amounts (in millions) and as a percent of revenue for the three-month periods ended August 31:

Current wording

The following table compares operating expenses expressed as dollar amounts (in millions) and as a percent of revenue for the periods ended November 30:

Previous wording

Purchased transportation expense increased 5% in the first quarter primarily due to higher rates and an increase in commercial linehaul to support network changes and international economy volume growth. Salaries and employee benefits expense was flat primarily due to savings from our DRIVE initiatives and lower variable incentive compensation, partially offset by an increase in wage rates as well as an increase in retirement benefits due to changes in our defined contribution plan that increased the number of eligible employees at Federal Express.

Current wording

Purchased transportation expense increased 2% in the second quarter and 3% in the first half of 2025 primarily due to higher rates and an increase in commercial linehaul to support international economy volume growth and network changes, partially offset by lower fuel prices and savings from our DRIVE initiatives. Other operating expenses increased 1% in the second quarter and first half of 2025 primarily due to an increase in self-insurance accruals and higher outside service contracts expense. Salaries and employee benefits expense increased 1% in the second quarter and slightly in the first half of 2025 primarily due to an increase in wage rates as well as an increase in retirement benefits due to changes in our deferred contribution plan that increased the number of eligible employees at

Previous wording

In the second quarter of 2023, we announced DRIVE, a comprehensive program to improve long-term profitability. This program includes a business optimization plan to drive efficiency within and among our transportation segments, lower our overhead and support costs, and transform our digital capabilities. We have commenced our plan to consolidate our sortation facilities and equipment, reduce pickup-and-delivery routes, and optimize our enterprise linehaul network by moving beyond discrete collaboration

Current wording

In the second quarter of 2023, we announced DRIVE, a comprehensive program to improve long-term profitability. This program includes a business optimization plan to drive efficiency within and among our transportation segments, lower our overhead and support costs, and transform our digital capabilities. We have commenced our plan to consolidate our sortation facilities and equipment, reduce pickup-and-delivery routes, and optimize our enterprise linehaul network by moving beyond discrete collaboration to an end-to-end optimized network through Network 2.0, the multi-year effort to improve the efficiency with which FedEx picks up, transports, and delivers packages in the U.S. and Canada.

Previous wording

We have implemented Network 2.0 optimization in more than 150 locations in the U.S. and Canada. Contracted service providers will handle the pickup and delivery of Federal Express packages in some locations while employee couriers will handle others.

Current wording

We have implemented Network 2.0 optimization in more than 200 locations in the U.S. and Canada. Contracted service providers will handle the pickup and delivery of Federal Express packages in some locations while employee couriers will handle others.

Previous wording

We incurred business optimization costs of $128 million ($98 million, net of tax, or $0.39 per diluted share) in the first quarter of 2025. These costs were primarily related to professional services and severance and are included in Corporate, other, and eliminations and Federal Express. We incurred business optimization costs of $105 million ($81 million, net of tax, or $0.32 per diluted share) in the first quarter of 2024. These costs were primarily related to professional services and severance and are included in Corporate, other, and eliminations and Federal Express.

Current wording

We incurred business optimization costs, including the workforce reduction plan in Europe, of $326 million ($249 million, net of tax, or $1.02 per diluted share) in the second quarter and $454 million ($347 million, net of tax, or $1.41 per diluted share) in the first half of 2025. These costs were primarily related to severance and professional services and are included in Federal Express and Corporate, other, and eliminations. We incurred business optimization costs of $145 million ($110 million, net of tax, or $0.44 per diluted share) in the second quarter and $250 million ($191 million, net of tax, or $0.75 per diluted share) in the first half of 2024. These costs were primarily related to professional services and severance and are included in Corporate, other, and eliminations and Federal Express.

Previous wording

We expect the pre-tax cost of the severance benefits and legal and professional fees to be provided under and related to our workforce reduction plan in Europe to range from $250 million to $375 million in cash expenditures through 2026.We expect the aggregate pre-tax cost of our other business optimization activities to be approximately $1.5 billion through 2025. The timing and amount of our business optimization expenses and the related cost savings from the workforce reduction plan may change as we revise and implement our plans. The identification of costs as business optimization-related expenditures is subject to our disclosure controls and procedures.

Current wording

We expect the pre-tax cost of the severance benefits and legal and professional fees to be provided under and related to our workforce reduction plan in Europe to range from $250 million to $375 million in cash expenditures through 2026. In the first half of 2025, we incurred $176 million of costs related to this plan. We expect the aggregate pre-tax cost of our other business optimization activities to be approximately $1.7 billion through 2025. The timing and amount of our business optimization expenses and the related cost savings from the workforce reduction plan may change as we revise and implement our plans. The identification of costs as business optimization-related expenditures is subject to our disclosure controls and procedures.

Previous wording

Our effective tax rate was 24.8% for the first quarter of 2025 and 24.2% for the first quarter of 2024. The 2025 tax rate was unfavorably impacted by an increase in uncertain tax positions.

Current wording

Our effective tax rate was 24.5% for the second quarter and 24.6% for the first half of 2025, compared to 25.1% for the second quarter and 24.6% for the first half of 2024. The second quarter 2025 tax rate was favorably impacted by higher earnings in certain non-U.S. jurisdictions.

Previous wording

During 2025, we expect revenue to modestly increase driven primarily by deferred service offerings, as the macroeconomic environment remains challenging and customer demand remains constrained. We will continue to execute on our DRIVE program initiatives focused on reducing our permanent cost structure, aligning our cost base with demand, and increasing the flexibility of our network. We will also continue to execute on our revenue quality strategy to mitigate the impact of the service mix shift on our yield as well as base yield pressures through surcharge management and optimizing our customer mix. We expect the benefits from DRIVE and revenue quality initiatives to be partially offset by expense headwinds related to higher global inflation, the unfavorable effect of the expiration in September 2024 of the contract for Federal Express to provide the U.S. Postal Service (“USPS”) U.S. domestic transportation services, and two fewer operating days.

Current wording

-27 - service mix shift on our yield as well as base yield pressures through surcharge management and optimizing our customer mix. We expect the benefits from DRIVE and revenue quality initiatives to be partially offset by expense headwinds related to higher global inflation, the unfavorable effect of the expiration in September 2024 of the contract for Federal Express to provide the USPS U.S. domestic transportation services, and two fewer operating days.

Previous wording

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

Current wording

Also included in Corporate and other are the FedEx Office and Print Services, Inc. (“FedEx Office”) operating segment, which provides an array of document and business services and retail access to our customers for our package transportation businesses, and

Previous wording

Operating results in Corporate, other, and eliminations declined in the first quarter of 2025 primarily due to a decrease in operating results at FedEx Dataworks, partially offset by improved operating results at FedEx Office. The decline in operating results at FedEx Dataworks was primarily due to increased business optimization costs and salaries and employee benefits expense. The improved

Current wording

Operating results in Corporate, other, and eliminations declined in the second quarter and first half of 2025 primarily due to increased business optimization costs and outside service contracts expense at FedEx Dataworks.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Federal Express offers a wide range of U.S. domestic and international shipping services for delivery of packages and freight including priority, deferred, and economy services, which provide delivery on a time-definite or day-definite basis. The following table compares revenue, operating expenses, operating income (dollars in millions), operating margin, and operating expenses as a percent of revenue for the periods ended November 30:

Previous wording

Prior year statistical information has been revised to conform to the current year presentation. The following table compares selected statistics (in thousands, except yield amounts) for the three-month periods ended August 31:

Current wording

Prior year statistical information has been revised to conform to the current year presentation. The following table compares selected statistics (in thousands, except yield amounts) for the periods ended November 30:

Previous wording

Federal Express segment revenue decreased 1% in the first quarter primarily due to one fewer operating day, lower priority package volume, and reduced demand surcharges, partially offset by increased deferred package volume, base yields, and fuel surcharges.

Current wording

Federal Express segment revenue was flat in the second quarter and first half of 2025 primarily due to increased deferred package volume and improved yields, partially offset by decreases from lower priority package and U.S. freight volume. Revenue in the first half of 2025 was also negatively affected by one fewer operating day and reduced demand surcharges.

Previous wording

U.S. priority package volume decreased 5% in the first quarter primarily due to economic softness and lower consumer spending. International priority package volume decreased 5% in the first quarter primarily due to a continued shift toward our deferred service offerings. These declines were partially offset by a 35% increase in international economy package volume in the first quarter driven by a continued shift toward our deferred service offerings as a result of global macroeconomic conditions.

Current wording

International priority package volume decreased 12% in the second quarter and 9% in the first half of 2025 driven by softer global industrial production. U.S. average daily freight pounds decreased 51% in the second quarter and 26% in the first half of 2025 primarily due to the expiration of our contract with the USPS on September 29, 2024. U.S. priority package volume decreased 4% in the second quarter and 5% in the first half of 2025 primarily due to economic softness and lower consumer spending. International economy package volume increased 44% in the second quarter and 40% in the first half of 2025 primarily due to continued growth in our deferred service offerings as a result of global macroeconomic conditions.

Previous wording

Federal Express segment operating income decreased 27% in the first quarter due to higher operating expenses and reduced revenue. The increase in operating expenses in the first quarter of 2025 was driven by increased wage and purchased transportation rates, partially offset by continued benefits from DRIVE initiatives that drove a reduction in our permanent cost structure. These initiatives included transforming our structural network, optimizing station processes in Europe, and improving the efficiency of our linehaul network and information technology function. Currency exchange rates had a negative effect on revenue and a positive effect on expenses and operating income in the first quarter. Operating income was negatively affected by one fewer operating day in the first quarter of 2025 compared to the first quarter of 2024.

Current wording

Federal Express segment operating income increased 2% in the second quarter of 2025 due to higher base yields, partially offset by increased operating expenses. Federal Express segment operating income decreased 14% in the first half of 2025 due to increased operating expenses and one fewer operating day, partially offset by higher base yields. The increase in operating expenses in the second quarter and first half of 2025 was driven by increased wage and purchased transportation rates, business optimization costs, and increased employee benefits, partially offset by lower fuel prices and continued benefits from DRIVE initiatives that drove a reduction in our permanent cost structure. These initiatives included the continued transformation of our structural network, improving the efficiency of our information technology and back office functions, optimizing operations in Europe, and increasing linehaul efficiencies.

Previous wording

Purchased transportation expense increased 3% in the first quarter primarily due to higher rates as well as an increase in commercial linehaul to support network changes and international economy volume growth, partially offset by one fewer operating day. Other operating expenses increased 2% primarily due to higher outside service contracts expense resulting from increased information technology spending and higher self-insurance accruals. Salaries and employee benefits expense increased slightly in the first quarter primarily due to an increase in wage rates as well as an increase in retirement benefits due to changes to our defined contribution plan which increased the number of eligible employees, partially offset by savings from our DRIVE initiatives and lower variable incentive compensation.

Current wording

Purchased transportation expense increased 2% in the second quarter and first half of 2025 primarily due to higher rates as well as an increase in commercial linehaul to support international economy volume growth and network changes, partially offset by lower fuel prices and savings from our DRIVE initiatives. Salaries and employee benefits increased 2% in the second quarter and 1% in the first half of 2025 primarily due to an increase in wage rates as well as an increase in retirement benefits due to changes to our defined contribution plan which increased the number of eligible employees, partially offset by savings from our DRIVE initiatives and lower variable incentive compensation. Other operating expense increased 3% in the second quarter and first half of 2025 primarily due to higher outside service contracts expense resulting from increased information technology spending and higher self-insurance accruals. Fuel expense decreased 28% in the second quarter and 16% in the first half of 2025 due to decreases in fuel prices and usage resulting from lower flight hours.

Previous wording

Federal Express segment results include business optimization costs of $43 million and $27 million in the first quarters of 2025 and 2024, respectively. See the “Business Optimization Costs” section of this MD&A for more information.

Current wording

Federal Express segment results include business optimization costs of $206 million in the second quarter and $249 million in the first half of 2025. Federal Express segment results include business optimization costs of $77 million in the second quarter and $104 million in the first half of 2024. See the “Business Optimization Costs” section of this MD&A for more information.

Previous wording

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

Current wording

FedEx Freight LTL service offerings include priority services when speed is critical and economy services when time can be traded for savings. The following table compares revenue, operating expenses, operating income (dollars in millions), operating margin, selected statistics, and operating expenses as a percent of revenue for the periods ended November 30:

Previous wording

FedEx Freight segment revenue decreased 2% in the first quarter primarily due to lower shipments and one fewer operating day, partially offset by yield improvement.

Current wording

FedEx Freight segment revenue decreased 11% in the second quarter and 7% in the first half of 2025 primarily due to lower shipments and yields. Revenue was also negatively affected by one fewer operating day in the first half of 2025.

Previous wording

Average daily shipments decreased 3% in the first quarter due to reduced demand for our priority services, partially offset by an increase in demand for our economy services, primarily resulting from macroeconomic conditions. Revenue per shipment increased 2% in the first quarter primarily due to base yield improvement resulting from our continued focus on revenue quality, partially offset by lower weight per shipment and fuel surcharges.

Current wording

Average daily shipments decreased 8% in the second quarter and 5% in the first half of 2025 due to reduced demand for our services, primarily resulting from macroeconomic conditions. Revenue per shipment decreased 4% in the second quarter and 1% in the first half of 2025 primarily due to lower fuel surcharges and weight per shipment, partially offset by base yield improvement resulting from our continued focus on revenue quality.

Previous wording

FedEx Freight segment operating income decreased 9% in the first quarter primarily due to decreased revenue, including one fewer operating day in the first quarter of 2025.

Current wording

FedEx Freight segment operating income decreased 36% in the second quarter and 23% in the first half of 2025 primarily due to lower revenue, partially offset by reduced operating expenses. Operating income was also negatively affected by one fewer operating day in the first half of 2025.

Previous wording

Cash and cash equivalents totaled $5.9 billion at August 31, 2024, compared to $6.5 billion at May 31, 2024. The following table provides a summary of our cash flows for the three-month periods ended August 31, 2024 and August 31, 2023 (in millions):

Current wording

Cash and cash equivalents totaled $5.0 billion at November 30, 2024, compared to $6.5 billion at May 31, 2024. The following table provides a summary of our cash flows for the six-month periods ended November 30, 2024 and 2023 (in millions):

Previous wording

Cash Provided by Operating Activities. Cash flows from operating activities decreased $1.0 billion in the first quarter of 2025 primarily due to working capital changes driven by a decrease in accrued incentive compensation and other liabilities and an increase in accounts receivable, partially offset by an increase in accounts payable from the first quarter of 2024.

Current wording

Cash Provided by Operating Activities. Cash flows from operating activities decreased $1.5 billion in the first half of 2025 primarily due to working capital changes driven by a decrease in accrued incentive compensation and other liabilities and an increase in accounts receivable, partially offset by an increase in accounts payable from the first half of 2024.

Previous wording

Cash Used in Investing Activities. Capital expenditures decreased during the first quarter of 2025 primarily due to decreased spending on aircraft and related equipment and vehicles and trailers. See “Capital Resources” for a discussion of capital expenditures during 2025.

Current wording

Cash Used in Investing Activities. Capital expenditures decreased during the first half of 2025 primarily due to decreased spending on aircraft and related equipment. See “Capital Resources” for a discussion of capital expenditures during 2025.

Previous wording

Financing Activities. We completed ASR transactions during the first quarter of 2025 with two banks to repurchase an aggregate of $1 billion of our common stock. See Note 1 of the accompanying unaudited condensed consolidated financial statements, “Liquidity Outlook” below, and Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” for additional information.

Current wording

Financing Activities. We repurchased an aggregate of $1.0 billion of our common stock through ASR transactions with two banks and open market purchases during the second quarter of 2025. During the first half of 2025, we repurchased 7.1 million shares of FedEx common stock through ASR transactions and open market purchases at an average price of $283.13 per share for a total of $2.0 billion. See Note 1 of the accompanying unaudited condensed consolidated financial statements, “Liquidity Outlook” below, and Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” for additional information.

Previous wording

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.

Current wording

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

Previous wording

The following table compares capital expenditures by asset category and reportable segment for the three-month periods ended August 31 (in millions):

Current wording

The following table compares capital expenditures by asset category and reportable segment for the periods ended November 30 (in millions):

Previous wording

Capital expenditures decreased in the first quarter primarily due to decreased spending on aircraft and related equipment at Federal Express and decreased spending on vehicles and trailers at FedEx Freight and Federal Express.

Current wording

Capital expenditures decreased in the second quarter and first half of 2025 primarily due to decreased spending on aircraft and related equipment and vehicles and trailers at Federal Express, partially offset by increased spending on vehicles and trailers at FedEx Freight.

Previous wording

The $19.3 billion principal amount of the senior unsecured notes were issued by FedEx under a shelf registration statement and are guaranteed by certain direct and indirect subsidiaries of FedEx (“Guarantor Subsidiaries”). FedEx owns, directly or indirectly, 100% of each Guarantor Subsidiary. The guarantees are (1) unsecured obligations of the respective Guarantor Subsidiary, (2) rank equally with all of their other unsecured and unsubordinated indebtedness, and (3) are full and unconditional and joint and several. If we sell, transfer, or otherwise dispose of all of the capital stock or all or substantially all of the assets of a Guarantor Subsidiary to any person that is not an affiliate of FedEx, the guarantee of that Guarantor Subsidiary will terminate, and holders of debt securities will no longer have a direct claim against such subsidiary under the guarantee.

Current wording

The $19.0 billion principal amount of the senior unsecured notes were issued by FedEx under a shelf registration statement and are guaranteed by certain direct and indirect subsidiaries of FedEx (“Guarantor Subsidiaries”). FedEx owns, directly or indirectly, 100% of each Guarantor Subsidiary. The guarantees are (1) unsecured obligations of the respective Guarantor Subsidiary, (2) rank equally with all of their other unsecured and unsubordinated indebtedness, and (3) are full and unconditional and joint and several. If we sell, transfer, or otherwise dispose of all of the capital stock or all or substantially all of the assets of a Guarantor Subsidiary to any person that is not an affiliate of FedEx, the guarantee of that Guarantor Subsidiary will terminate, and holders of debt securities will no longer have a direct claim against such subsidiary under the guarantee.

Previous wording

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

Current wording

The following table presents the summarized statement of income information for the six-month period ended November 30, 2024 (in millions):