FEDEX CORP (FDX) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that FEDEX CORP surfaced in its latest filing.

• Decline in U.S. imports of consumer goods starting in late 2022 has weakened business conditions.late 2022
• Inflation and elevated interest rates are expected to negatively affect results through calendar year 2026.2026
• Ongoing conflicts between Russia and Ukraine, the United States and Iran, and hostilities in the Middle East have disrupted operations, including suspended services in Belarus, exited Russia, and impacted Middle East services.
• The U.S. government has imposed tariffs on many goods imported into the United States.
• Foreign governments have imposed or threatened to impose new, expanded, or retaliatory tariffs, sanctions, embargoes, or quotas.
• As of May 31, 2026, the company had no derivative financial instruments to reduce exposure to fuel price fluctuations.May 31, 2026
• Network 2.0 multi-year effort to improve U.S. and Canada package pickup, transport, and delivery efficiency.
• Tricolor global redesign of intercontinental air network into priority parcel, priority freight, and deferred parcels and freight systems.
• January 2026 initiation of operational transformation programs in certain international locations.January 2026
• Integration of historically separate Federal Express and legacy FedEx Ground businesses and networks.
• Legal challenges by service providers or governmental agencies seeking to slow or stop Network 2.0 plans.
• FedEx has experienced successful cyberattacks by criminals aiming to fraudulently divert shipments, charge customer accounts, and send fraudulent emails purporting to be from FedEx.
• The company is undergoing FedEx enterprise automation platform migrations, creating transitional challenges that may increase cyber risk.
• FedEx is increasingly utilizing AI technologies in its operations, which may produce inaccurate outputs and increase cybersecurity, privacy, and regulatory risks.
• The TSA requires Federal Express to comply with a Full All-Cargo Aircraft Operator Standard Security Plan with evolving security requirements.
• Commercial trucking industry experienced 'nuclear' verdicts with juries awarding hundreds of millions of dollars.
• Third-party providers may suffer disruptions to their systems, labor groups, or supply chains.
• Third-party service providers, vendors, or suppliers have previously engaged in fraudulent activities.
• Announced on February 12, 2026, a multi-year financial framework with calendar 2029 targets.February 12, 2026
• Spin-Off completed on June 1, 2026, separating FedEx Freight business.June 1, 2026
• Separation and distribution agreement provides cross-indemnities between FedEx and FedEx Freight.
• Transition services agreement executed between FedEx and FedEx Freight.
• Tax matters agreement executed between FedEx and FedEx Freight.
• Employee matters agreement executed between FedEx and FedEx Freight.
• Intellectual property cross-license agreement executed between FedEx and FedEx Freight.
• Trademark license agreement executed between FedEx and FedEx Freight.
• Stockholder and registration rights agreement executed between FedEx and FedEx Freight.
• Indemnification agreement executed between FedEx and FedEx Freight.
• FedEx must divest its ownership interest in FedEx Freight within 24 months of the Spin-Off.
• Received a private letter ruling from the IRS regarding the tax-free qualification of the Spin-Off.
• FedEx is one of the most widely recognized, trusted, and respected brands in the world.
• Amazon has established a network of hubs, aircraft, and vehicles, recently began offering an LTL freight service for inbound shipments to its distribution facilities, and recently began offering its internal delivery capabilities broadly to third parties.
• Noncash impairment charges recorded in 2026 and 2025 in connection with the decision to permanently retire certain aircraft and related engines from service.2026 and 2025
• Conditional agreement on recommended all-cash public offer for all issued and outstanding shares of InPost S.A.
• Consortium will be structured with us holding 37% of InPost.
• FedEx Supply Chain was acquired in 2015 and already had a small number of unionized employees.2015
• Our pilots are represented by a union under a collective bargaining agreement.
• Defending joint-employer cases alleging we should be treated as an employer or joint employer of drivers employed by service providers.
• In 2010, the FAA proposed regulations to change flight and duty time rules for all-cargo air carriers.2010
• All-cargo carriers, including Federal Express, were exempt from the 2011 FAA final regulations.2011
• In 2012, the FAA reaffirmed the exclusion of all-cargo carriers from the 2011 regulations, and litigation affirmed the decision.2012
• Recognized a pre-tax, noncash MTM gain of $647 million in 2026 ($497 million, net of tax, or $2.08 per diluted share) related to pension plans.2026
• 2021 goal to achieve carbon neutrality for global operations by calendar 2040.2021
• Disruptions at airport facilities used by FedEx to manage operations could cause flight cancellations or delays, including at the Memphis World Hub.
• Executive orders issued in the United States, including those being litigated or held not supported by law by courts, have caused uncertainty regarding changes to laws, regulations, and enforcement priorities.
• Subject to the EU's General Data Protection Regulation, California Consumer Privacy Act, Virginia Consumer Data Protection Act, Canada PIPEDA, EU AI Act, and Colorado AI Act.
• China and certain other jurisdictions have enacted more stringent data localization requirements.
• Legal proceedings discussed in Note 19 of the consolidated financial statements.
• Difficulties experienced by regional feeder aircraft contractors in attracting and retaining pilots.