#1FedEx FedEx Ground fedex.com FedEx Corporation Fiscal Second Quarter 2024 Earnings | December 19, 2023 Stephen Hughes Investor Relations 2#2Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements, such as statements regarding expected cost savings, the planned consolidation of operating companies, future financial targets, business strategies, management's views with respect to future events and financial performance, and the assumptions underlying such expected cost savings, targets, strategies, and statements. Forward-looking statements include those preceded by, followed by or that include the words "will," "may," "could," "would," "should," "believes," "expects," "forecasts," "anticipates," "plans," "estimates," "targets," "projects," "intends" or similar expressions. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate; our ability to successfully implement our business strategy and global transformation program and consolidate our operating companies into one organization, effectively respond to changes in market dynamics, and achieve the anticipated benefits of such strategies and actions while managing related risks; our ability to achieve our cost reduction initiatives and financial performance goals; the timing and amount of costs related to our global transformation program and other ongoing initiatives; damage to our reputation or loss of brand equity; changes in the business or financial soundness of the U.S. Postal Service or its relationship with FedEx, including strategic changes to its operations to reduce its reliance on the air network of FedEx Express; our ability to meet our labor and purchased transportation needs while controlling related costs; a significant data breach or other disruption to our technology infrastructure; anti-trade measures and additional changes in international trade policies and relations; the effect of any international conflicts or terrorist activities; the impact of a widespread outbreak of an illness or any other communicable disease or public health crises; changes in fuel prices or currency exchange rates; our ability to match capacity to shifting volume levels; the effect of intense competition; an increase in self-insurance accruals and expenses; failure to receive or collect expected insurance coverage; our ability to effectively operate, integrate, leverage, and grow acquired businesses and realize the anticipated benefits of acquisitions and other strategic transactions; noncash impairment charges related to our goodwill and certain deferred tax assets; the future rate of e-commerce growth and levels of inventory restocking; evolving or new U.S. domestic or international laws and government regulations, policies, and actions; future guidance, regulations, interpretations, challenges, or judicial decisions related to our tax positions; legal challenges or changes related to service providers engaged by FedEx Ground and the drivers employed by them and the coverage of U.S. employees at FedEx Express under the Railway Labor Act of 1926, as amended; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; any liability resulting from and the costs of defending against litigation; our ability to achieve or demonstrate progress on our goal of carbon-neutral operations by 2040; and other factors which can be found in FedEx Corp.'s and its subsidiaries' press releases and FedEx Corp.'s filings with the Securities and Exchange Commission. Any forward- looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward looking statement, whether as a result of new information, future events, or otherwise. FedEx reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAAP (or "adjusted") financial measures. Reconciliations of non-GAAP measures used in this presentation to the most directly comparable GAAP measures are included below under "Appendix." The financial targets and outlook provided herein and discussed during this presentation assume the company's current economic forecast and fuel price expectations, successful completion of planned stock repurchases, and no additional adverse geopolitical developments. FedEx's earnings per share and ETR forecasts are based on current law and related regulations and guidance. This presentation should be reviewed in conjunction with our second quarter fiscal 2024 earnings release and webcast of the earnings release conference call, which are available on FedEx's website at investors.fedex.com. Raj Subramaniam President & CEO 3 4#3• Key messages Delivering another strong Peak season while sustaining superior service levels DRIVE enabling improved profitability with two consecutive quarters of operating income growth and margin expansion against declining revenues Reaffirming FY24 adjusted EPS* outlook *Non-GAAP financial measure; see appendix for more information Results overview Transformation driving improved profitability Revenue Q2 FY24 Results Q2 FY24 Commentary: $22.2B • (3)% YoY Revenue remained pressured, driven by volume declines at Express and Freight Adj. operating income* Adj. operating margin* Adj. EPS* $1.4B 17% YoY 6.4% +110 bps $3.99 25% YoY • *Non-GAAP financial measure; see appendix for more information Ground and Freight delivered improved operational performance translating to strong operating income growth Adjusted consolidated margin growth reflects DRIVE initiatives taking hold and improved operational execution 6#4DRIVE is enabling improved profitability Highly confident in our goal to deliver $1.8B in cost reduction benefits from DRIVE DRIVE supporting operating income growth DRIVE impact I Q2 FY24 against declining revenues (Absolute $ change) Q1 FY24 - Q4 FY23 Q3 FY23 Q2 FY23 Q4 FY20 Q2 FY20 Q1 FY20 Q2 FY10 Q1FY10 Q4 FY09 Q3 FY09 Op income YoY $ ---------- Revenue YoY $ Q2 cost savings: ~$200M in Surface Network ~$115M in Air Network & International >$100M in G&A Redesigning unmatched air network Focusing on speed and density to support realization of DRIVE benefits Key elements of Tricolor network design Purple Deliver high-priority, high-margin volumes through FedEx-owned fleet Orange Build off-cycle FedEx flights into network to build density, decongest hubs, and connect our global surface networks White Continue to leverage our global partner network as an adaptative capacity layer 7 8#5Building the world's most flexible, efficient, and intelligent network Brie Carere EVP & Chief Customer Officer 10#6Transportation segment revenue performance Gaining parcel share in the U.S. and internationally +3% $8.4B $8.6B Q2 FY23 Q2 FY24 -4% $2.5B $2.4B Q2 FY23 Q2 FY24 -6% $10.9B $10.3B Q2 FY23 Q2 FY24 • • FedEx Ground Revenue increase driven by higher yield and volume Focused on improving profitability and maintaining our position as price leader FedEx Freight Lower shipments offset an increase in yield Volume pressure moderated and revenue per shipment inflected positively FedEx Express Experienced lower fuel surcharges, reduced demand surcharges, and a mix shift toward lower-yielding services Global freight pounds down YoY • Peak update Peak season in-line with expectations Safe, reliable, and outstanding service Receiving very positive customer feedback Digital tools Picture Proof of Delivery, Estimated Delivery Time Window, and FedEx Delivery Manager provide peace of mind for holiday shipments FedE Returns • Offering returns solutions that create a convenient, seamless experience for retailers and consumers 11 FedEx#7Monthly volume trends: June 2023-Nov. 2023 Sequential improvement with continued growth in Ground and International Export Q1 average daily volume Q2 average daily volume FedEx Express U.S. Domestic Package YoY FedEx Express International Export YoY Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov 3% 1% 6% 4% 0% 4% -5% -9% -8% -2% -3% -3% FedEx Ground YoY FedEx Freight LTL YOY Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov 3% 1% 1% 4% 0% -3% -8% -6% -5% -4% -14% -16% Transportation segment yield performance Seeing yield stabilization in U.S. domestic markets YoY yield by fiscal quarter 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 -FedEx Express International Export Q2 FY23 FedEx Express U.S. Domestic Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 -FedEx Ground -FedEx Freight 13 14#8Digital DNA Launching new Tracking Application Programming Interface (API) in early 2024 • • API to offer e-commerce shippers and platforms best-in-class visibility for their customers including Picture Proof of Delivery A significant enhancement for our retail customers as well as third-party e-commerce platforms that rely on our data as an integral part of their value proposition FedExⓇ abo John Dietrich EVP & Chief Financial Officer 15 16#9Transportation segment operating income performance +57% $936M $598M +11% -49% $440M $487M $352M Q2 FY23 Q2 FY24* Q2 FY23 Q2 FY24 Q2 FY23* $178M Q2 FY24* FedEx Freight FedEx Express FedEx Ground Increase driven by yield improvement, cost reductions, and higher volumes Cost per package decreased 2% versus prior year Increase driven by yield improvement and increased efficiency, partially offset by lower shipments Focused on improving profitability while navigating this challenging environment Decline due to lower revenue partially offset by reduced operating expenses Revenue impacted by volume declines, lower fuel and demand surcharges, and a mix shift toward lower-yielding services *Non-GAAP financial measure; see appendix for more information Reaffirming FY24 adjusted EPS* outlook Revenue Sept 2023 Dec 2023 Approximately flat Low-single-digit percentage decline Adjusted EPS* $17.00-18.50 $17.00-18.50 Commentary: • Reaffirming adjusted EPS* outlook despite weaker demand environment reflects transformation benefits Remain committed to $1.8B in Effective tax rate** DRIVE cost savings in FY24 25% 25% • Continue to expect year-over-year adjusted margin expansion in FY24 Capital spend $5.7B $5.7B *Non-GAAP financial measure; see appendix for more information **Non-GAAP financial measure; prior to mark-to-market retirement plans accounting adjustments, which are impracticable to calculate at this time 17 18#10Illustrative operating income bridge based on FY24 adjusted EPS* outlook $1.8B $6.3B $0.5B ($0.8B) $5.4B ($0.6B) FY23 adjusted operating income* Revenue, net of cost increases International export yield pressure Variable comp DRIVE FY24E adjusted operating income* *Non-GAAP financial measure; see appendix for more information Capital allocation priorities Unwavering focus on efficient and responsible capital allocation 7.6% of revenue FY19-FY22 6.8% of revenue <6.5% of revenue FY23 FY25 target $2.0 $3.3* FY24E capital return ■Share repurchases ■ Dividend ($ in billions) $1.3 Lowering capital spend through FY25 CapEx of $1.3B in Q2 FY24; expect to achieve • FY25 target of less than 6.5% in FY24 • Planning for lower annual aircraft CapEx; expected to be ~$1B in FY26 ROIC metric added to executive compensation program Enhanced capital return to stockholders Completed $500M accelerated share repurchase transaction in Q2 FY24 Expect to repurchase an additional $1.0B in FY24 *Reflects FedEx's share repurchase and dividend expectations for the remainder of FY24. Each quarterly dividend payment is subject to review and approval by our Board of Directors 19 20#11Figen Strate Q&A Appendix FedEx Express FedEx FedEx FedEx Medium Box FedEx Medium Box Large Box 22 22#12Q2 FY24 reconciliation for FedEx Corporation Operating Dollars in millions, except EPS Income Operating Margin¹ Income Taxes² Net Income³ GAAP measure $1,276 5.8% $302 $900 Diluted Earnings Per Share $3.55 Business optimization costs4 145 0.7% 35 110 0.44 Non-GAAP measure $1,421 6.4% $337 $1,010 $3.99 1,2,3,4 See "Footnotes for Non-GAAP Reconciliation Slides" below for details Q2 FY24 reconciliation for FedEx Express segment Dollars in millions GAAP measure Operating Income Operating Margin $137 1.3% Business optimization costs 41 0.4% Non-GAAP measure $178 1.7% 23 24#13Q2 FY24 reconciliation for FedEx Ground segment Dollars in millions GAAP measure Operating Income Operating Margin $900 10.4% Business optimization costs 36 0.4% Non-GAAP measure $936 10.8% Q2 FY23 reconciliation for FedEx Corporation Dollars in millions, except EPS Operating Income Operating Margin¹ Income Taxes² Net Income³ Diluted Earnings Per Share GAAP measure $1,176 5.2% $271 $788 $3.07 Business optimization costs5 36 0.2% 9 27 0.11 Non-GAAP measure $1,212 5.3% $280 $815 $3.18 1,2,3,5 See "Footnotes for Non-GAAP Reconciliation Slides" below for details 25 26#14Q2 FY23 reconciliation for FedEx Express segment Dollars in millions GAAP measure Operating Income Operating Margin $341 3.1% Business optimization costs 11 0.1% Non-GAAP measure $352 3.2% FY24 earnings per share forecast Dollars in millions, except EPS Earnings per diluted share before MTM retirement plans accounting adjustments (non- GAAP)6 Business optimization costs Income tax effect² Net of tax effect Earnings per diluted share with adjustments (non-GAAP)6 2,6 See "Footnotes for Non-GAAP Reconciliation Slides" below for details Adjustments Diluted Earnings Per Share 550 (130) $15.35 to $16.85 $420 1.65 $17.00 to $18.50 27 28#15FY23 operating income reconciliation for FedEx Corporation Dollars in millions Operating Income $4,912 GAAP measure MTM retirement plans accounting adjustment Business optimization costs Goodwill and other asset impairment charges Business realignment costs FedEx Ground legal matter Non-GAAP measure 273 117 36 35 $5,373 FY24 outlook midpoint operating income forecast Dollars in millions Operating income (GAAP measure) Business optimization costs Adjusted operating income (non-GAAP) $5,750 550 $6,300 29 30#16Footnotes for non-GAAP reconciliation slides 1. Does not sum to total due to rounding. 2. Income taxes are based on the company's approximate statutory tax rates applicable to each transaction. Effect of "total other (expense) income" on net income amount not shown. 3. 4. These expenses were recognized at Corporate, other, and eliminations, as well as FedEx Express and FedEx Ground. 5. These expenses were recognized at FedEx Corporate and FedEx Express. 6. The MTM retirement plans accounting adjustments, which are impracticable to calculate at this time, are excluded.