Slide 1: FedEx Corporation Fiscal Second Quarter 2025 Earnings
FedEx Corporation Fiscal Second Quarter 2025 Earnings | December 19, 2024 VP of Investor Relations 2
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act, such as statements regarding expected cost savings, the optimization of our network thro
Slide 3: Full separation of FedEx and FedEx Freight
FedEx Board has concluded that best path forward is to pursue a full separation of FedEx and FedEx Freight Separation unlocks significant value by creating two industry- 1 leading public companies Will continue to enable commercial, operational, and technological 2 cooperation FedEx and FedEx Freigh
Slide 4: FedEx Freight: Operational value creation opportunities with industry tailwinds
FedEx Freight: Significant operational value creation opportunities with long-term industry tailwinds Strengthening leading customer value proposition LTL market dynamics Increasing industry consolidation Expanding our dedicated Enhanced LTL-specific LTL salesforce, driving pricing and invoicing Top
Slide 5: FedEx: A market leader with unmatched global network
FedEx: A market leader with unmatched global network Competitive advantages Separation impact on FedEx Global leader, providing rapid, reliable, FedEx portfolio post-separation1 definite delivery to more than 220 countries and territories 44% 31% Ground Int’l Service Geography Deliver ~17M packages
Slide 6: Next steps; Q2 FY25 overview
Next steps Tax-free separation expected to be executed within 18 months Separation Management Office preparing each company for transition Expect to share key separation milestones along the way Maintaining business-as-usual standard to ensure we continue to deliver the highest quality service to ou
Slide 7: DRIVE: Unlocking significant value in Europe
DRIVE: Unlocking significant value in Europe DRIVE, our foundational framework, is leading to better business outcomes Improved YoY financial performance in Europe • Improving service and gaining market share Common data platform implementation • Improved routing led to reduction in touches on intra
Slide 8: Transportation segment revenue performance
EVP & Chief Customer Officer 15 Transportation segment revenue performance Federal Express FedEx Freight 0% (11%) $18.8B $18.8B $2.5B $2.2B Q2 FY24 Q2 FY25 Q2 FY24 Q2 FY25 • Improved base yields and increased demand for • Decrease driven by lower average daily shipments, international export parcel
Slide 9: Volume trends by service; segment yield performance
Volume trends by service Q1 FY25 average daily volume or shipments Q2 FY25 average daily volume or shipments Federal Express U.S. Priority and Deferred Package YoY Federal Express International Export Package YoY Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov 10% 9% 10% 9% 10% (0%) 7% 0% (6%) (3%)
Slide 10: Strategic commercial priorities
Strategic commercial priorities Driving long-term profitable revenue growth B2B: Healthcare and automotive U.S. domestic e-commerce Global air freight market Europe 19 EVP & Chief Financial Officer 20
Slide 11: Transportation segment operating income performance
Transportation segment operating income performance Federal Express FedEx Freight 13% (36%) $1,112M $1,258M $491M $312M Q2 FY24* Q2 FY25* Q2 FY24 Q2 FY25 • Increase primarily driven by DRIVE structural • Decrease driven by lower average daily shipments, cost savings, base yield improvement, and fuel
Slide 12: Updated FY25 outlook
Updated FY25 outlook Sep 2024 Dec 2024 • Revising FY25 revenue, adjusted diluted Low single-digit EPS*, and ETR outlook Revenue Approximately Flat percentage growth • Global industrial economy continues to constrain demand Adjusted $20 - $21 $19 - $20 • Midpoint of adjusted diluted EPS* range Dilute
Slide 13: Capital allocation priorities
Capital allocation priorities Continuing to reduce capital intensity while increasing capital returns $6.8B $6.2B $5.2B $5.2B $2.5B Stock repurchases 7.6% 7.2% of of 6.8% of 6.8% 5.9%ofof <6.5% of $3.8B* revenue Dividend revenue revenue revenue revenue revenue FY25E capital return $1.3B FY22 FY23 FY
Slide 14: Appendix: Non-GAAP financial measures
Appendix 27 Non-GAAP financial measures FY25 EPS and ETR forecasts Our fiscal 2025 diluted earnings per share (“EPS”) forecast is a non-GAAP financial measure because it excludes fiscal 2025 mark-to-market (“MTM”) retirement plans accounting adjustments and estimated costs related to business optimi
Slide 15: Q2 FY25 reconciliation
Q2 FY25 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1 Income2 Per Share GAAP measure $1,052 4.8% $240 $741 $3.03 Business optimization costs3 326 1.5% 77 249 1.02 Non-GAAP measure $1,378 6.3% $317 $990 $4.05
Slide 16: Q2 FY24 reconciliation
Q2 FY24 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin4 Taxes1 Income2 Per Share GAAP measure $1,276 5.8% $302 $900 $3.55 Business optimization costs3 145 0.7% 35 110 0.44 Non-GAAP measure $1,421 6.4% $337 $1,010 $3.
Slide 17: Q1 FY25 reconciliation
Q1 FY25 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1 Income2 Per Share GAAP measure $1,080 5.0% $262 $794 $3.21 Business optimization costs3 128 0.6% 30 98 0.39 Non-GAAP measure $1,208 5.6% $292 $892 $3.60 1
Slide 18: FY25 earnings per share forecast
FY25 earnings per share forecast Dollars in millions, except EPS Adjustments Diluted Earnings Per Share Earnings per diluted share before MTM retirement $16.45 to $17.45 plans accounting adjustments (non-GAAP)5 Business optimization costs $815 Income tax effect2 (195) Net of tax effect $620 2.55 Ear
Slide 19: FY24 reconciliation; footnotes
FY24 reconciliation for FedEx Corporation Dollars in millions Operating Income GAAP measure $5,559 MTM retirement plans — accounting adjustment6 Asset impairment charges7 157 Business optimization costs3 582 Remeasurement of state deferred income taxes — under one FedEx structure8 FedEx Ground legal