FedEx : 2021 Annual Report

2021

ANNUAL REPORT

MOVING THE WORLD FORWARD

To our shareowners,

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.

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 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 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-19vaccine 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 by FedEx Services.

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 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 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 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.

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 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 people's homes throughout a peak like no other.

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 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 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.

In the e-commercemarket, 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 FedEx Ground Economy, growing our large package network, offering the first FedEx-brandedthrough-the-door service options with FedEx Freight Direct, and accelerating the expansion of our retail convenience network including new hotel, convention center, and OnCampus locations for FedEx Office.

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 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 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.

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 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 attractive services like FedEx International Connect Plus - our day-definitee-commerce delivery service rolling out globally this fiscal year.

2021 Annual Report

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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-ende-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-consuminglast-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-neutralglobal 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.

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to . Commission file number 1-15829

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended May 31, 2021.

OR

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

For the transition period from

FedEx Corporation

(Exact Name of Registrant as Specified in its Charter)

Delaware				62-1721435
(State or Other Jurisdiction of				(I.R.S. Employer
Incorporation or Organization)				Identification No.)
942 South Shady Grove Road, Memphis, Tennessee				38120
(Address of Principal Executive Offices)				(ZIP Code)
Registrant's telephone number, including area code: [phone]
		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	FDX	New York Stock Exchange
0.450% Notes due 2025	FDX 25A	New York Stock Exchange
1.625% Notes due 2027	FDX 27	New York Stock Exchange
0.450% Notes due 2029	FDX 29A	New York Stock Exchange
1.300% Notes due 2031	FDX 31	New York Stock Exchange
0.950% Notes due 2033	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. 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 (§ 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.

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.