FedexFDX

01FedEx's integrated global air-ground network and brand franchise create a structural moat because no competitor can replicate the scale, reach, and reliability of this infrastructure without decades of capital investment, enabling FedEx to maintain pricing power on time-definite shipments where reliability is mission-critical

02Network 2.0 is our multi-year effort to improve the efficiency with which FedEx picks up, transports, and delivers packages in the U.S. and Canada We have implemented Network 2.0 optimization in approximately 410 locations in the U.S. and Canada as of May 31, 2026 We completed Canada's implementation of Network 2.0 in the fourth quarter of fiscal year 2025 and expect to complete the U.S. implementation by the end of calendar 2027 Operating income increased in 2026 primarily due to improved base yields for our package services, increased U.S. domestic package volumes and higher fuel surcharges, combined with the continued structural cost reductions from business optimization initiatives We expect to achieve $1.0 billion in structural cost reduction by the end of calendar year 2026

03The FedEx Freight spin-off and associated $4.1 billion dividend monetize a slower-growth LTL asset and allow management to delever the balance sheet while accelerating buybacks, concentrating equity value on the higher-return express parcel franchise and returning capital to shareholders

04U.S. priority package volumes increased 4% in 2026 supported by growth in demand by business-to-business customers Federal Express segment revenue increased 9% in 2026 primarily due to improved package base yields, increased U.S. domestic package volumes, higher fuel surcharges, favorable exchange rates, and growth in international freight volumes