Business Segments and Disaggregated Revenue

12 Months Ended

May 31, 2024

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Business Segments and Disaggregated Revenue

NOTE 14: BUSINESS SEGMENTS AND DISAGGREGATED REVENUE

FedEx Express, FedEx Ground, and FedEx Freight represented our major service lines and, along with FedEx Services, constituted our reportable segments for 2024, 2023 and 2022. Our reportable segments for these periods included the following businesses:

FedEx Express Segment	FedEx Express (express transportation, small-package ground delivery, and freight transportation)
	FedEx Custom Critical, Inc. (time-critical transportation)
FedEx Ground Segment	FedEx Ground (small-package ground delivery)
FedEx Freight Segment	FedEx Freight (LTL freight transportation)
FedEx Services Segment	FedEx Services (sales, marketing, information technology, communications, customer service, technical support, billing and collection services, and back-office functions)

In the fourth quarter of 2023, FedEx announced one FedEx, a consolidation plan to bring FedEx Ground and FedEx Services into Federal Express Corporation, becoming a single company operating a unified, fully integrated air-ground express network under the respected FedEx brand. The organizational redesign was implemented in phases with full legal implementation effective June 1, 2024. During the implementation process in 2024, each of our reportable segments continued to have discrete financial information that was regularly reviewed when evaluating performance and making resource allocation decisions, and aligned with our management reporting structure and our internal financial reporting. Beginning in the first quarter of fiscal 2025, our reportable segments will be Federal Express Corporation and FedEx Freight. Additionally, the results of FedEx Custom Critical, Inc. will be included in the FedEx Freight segment instead of the Federal Express segment. This change was made to reflect our new management reporting structure. Prior-year amounts will be revised to reflect this presentation.

References to our transportation segments include, collectively, the FedEx Express segment, the FedEx Ground segment, and the FedEx Freight segment.

FedEx Services Segment

During 2024, 2023, and 2022, the FedEx Services segment operated combined sales, marketing, administrative, and information-technology functions in shared services operations for U.S. customers of our major business units and certain back-office support to our operating segments which allowed us to obtain synergies from the combination of these functions. For the international regions of FedEx Express, some of these functions were performed on a regional basis and reported by FedEx Express in their natural expense line items.

The FedEx Services segment provided direct and indirect support to our operating segments, and we allocated all of the net operating costs of the FedEx Services segment to reflect the full cost of operating our businesses in the results of those segments. We reviewed and evaluated the performance of our transportation segments based on operating income (inclusive of FedEx Services segment allocations). For the FedEx Services segment, performance was evaluated based on the effect of its total allocated net operating costs on our operating segments.

Operating expenses for each of our transportation segments included the allocations from the FedEx Services segment to the respective transportation segments. These allocations included charges and credits for administrative services provided between operating companies. The allocations of net operating costs were based on metrics such as relative revenue or estimated services provided. We believe these allocations approximated the net cost of providing these functions. Our allocation methodologies were refined periodically, as necessary, to reflect changes in our businesses.

Other Intersegment Transactions

Corporate and other includes corporate headquarters costs for executive officers and certain legal and finance functions, including certain other costs and credits not attributed to our core business, as well as certain costs associated with developing integrated business solutions through our FedEx Dataworks operating segment. FedEx Dataworks is focused on creating solutions to transform the digital and physical experiences of our customers and team members. ShopRunner, Inc. was merged into FedEx Dataworks during 2023.

Also included in Corporate and other is the FedEx Office and Print Services, Inc. (“FedEx Office”) operating segment, which provides an array of document and business services and retail access to our customers for our package transportation businesses, and the FedEx Logistics operating segment, which provides integrated supply chain management solutions, specialty transportation, customs brokerage, and global ocean and air freight forwarding.

The results of Corporate, other, and eliminations are not allocated to the other business segments.

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment in order to optimize our resources. Billings for such services are based on negotiated rates, and are reflected as revenue of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenue and expenses are eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are not material.

The following table provides a reconciliation of reportable segment revenue, depreciation and amortization, operating income (loss), and segment assets to consolidated financial statement totals (in millions) for the years ended or as of May 31:

	FedEx Express Segment		FedEx Ground Segment		FedEx Freight Segment		FedEx Services Segment		Corporate, other, and eliminations			Consolidated Total
Revenue
2024	$	40,857	$	34,256	$	9,082	$	260	$	3,238		$	87,693
2023		42,743		33,507		9,632		301		3,972			90,155
2022		45,814		33,232		9,532		253		4,681			93,512
Depreciation and amortization
2024	$	2,172	$	1,119	$	402	$	465	$	129		$	4,287
2023		2,105		1,020		387		529		135			4,176
2022		2,007		919		406		513		125			3,970
Operating income (loss)
2024(1)	$	776	$	4,049	$	1,814	$	—	$	(1,080	)	$	5,559
2023(2)		1,064		3,140		1,925		—		(1,217	)		4,912
2022(3)		2,922		2,642		1,663		—		(982	)		6,245
Segment assets(4)
2024	$	48,699	$	17,884	$	11,389	$	7,078	$	1,957		$	87,007
2023		47,754		36,815		10,197		7,415		(15,038	)		87,143
2022		47,604		32,645		8,904		8,389		(11,548	)		85,994

(1)Includes business optimization costs of $331 million included in “Corporate, other, and eliminations” and $143 million and $108 million included in the FedEx Express and FedEx Ground segments, respectively. Includes noncash asset impairment charges of $157 million related to the decision to permanently retire certain aircraft and related engines at FedEx Express. Also includes a $57 million benefit included in “Corporate, other, and eliminations” for an insurance reimbursement related to pre- and post-judgment interest in connection with a FedEx Ground legal matter.

(2)Includes business optimization costs of $262 million included in “Corporate, other, and eliminations” and business optimization and realignment costs of $11 million and $36 million, respectively, included in the FedEx Express segment. Includes noncash other asset impairment charges of $70 million related to the decision to permanently retire certain aircraft and related engines at FedEx Express and goodwill and other asset impairment charges of $47 million at FedEx Dataworks related to the ShopRunner acquisition. Also includes $35 million in connection with a FedEx Ground legal matter included in “Corporate, other, and eliminations.”

(3)Includes business realignment costs of $278 million included in the FedEx Express segment, as well as a charge of $210 million related to the pre- and post-judgment interest in connection with a separate FedEx Ground legal matter included in “Corporate, other, and eliminations.” Also includes TNT Express integration expenses of $132 million included in “Corporate, other, and eliminations” and the FedEx Express segment.

(4)Segment assets include intercompany receivables. In the fourth quarter of 2024, FedEx Ground settled an intercompany balance of $19.5 billion with FedEx in preparation for the one FedEx consolidation.

The following table provides a reconciliation of reportable segment capital expenditures to consolidated totals for the years ended May 31 (in millions):

	FedEx Express Segment		FedEx Ground Segment		FedEx Freight Segment		FedEx Services Segment		Other		Consolidated Total
2024	$	3,291	$	1,018	$	461	$	282	$	124	$	5,176
2023		3,055		1,995		556		431		137		6,174
2022		3,637		2,139		319		565		103		6,763

The following table presents revenue by service type and geographic information for the years ended or as of May 31 (in millions):

	2024		2023		2022
REVENUE BY SERVICE TYPE
FedEx Express segment:
Package:
U.S. overnight box	$	8,689	$	8,916	$	9,084
U.S. overnight envelope		1,854		1,980		1,971
U.S. deferred		4,928		5,128		5,330
Total U.S. domestic package revenue		15,471		16,024		16,385
International priority		9,455		10,939		12,130
International economy		4,273		2,911		2,838
Total international export package revenue		13,728		13,850		14,968
International domestic(1)		4,178		4,043		4,340
Total package revenue		33,377		33,917		35,693
Freight:
U.S.		2,418		2,906		3,041
International priority		2,205		3,060		3,840
International economy		1,677		1,510		1,653
International airfreight		126		166		177
Total freight revenue		6,426		7,642		8,711
Other		1,054		1,184		1,410
Total FedEx Express segment		40,857		42,743		45,814
FedEx Ground segment		34,256		33,507		33,232
FedEx Freight segment		9,082		9,632		9,532
FedEx Services segment		260		301		253
Other and eliminations(2)		3,238		3,972		4,681
	$	87,693	$	90,155	$	93,512
GEOGRAPHICAL INFORMATION(3)
Revenue:
U.S.	$	63,531	$	64,890	$	64,941
International:
FedEx Express segment		22,291		23,090		25,564
FedEx Ground segment		844		860		857
FedEx Freight segment		266		264		235
FedEx Services segment		1		1		1
Other		760		1,050		1,914
Total international revenue		24,162		25,265		28,571
	$	87,693	$	90,155	$	93,512
Noncurrent assets:
U.S.	$	56,822	$	56,449	$	53,311
International		11,978		12,084		12,318
	$	68,800	$	68,533	$	65,629

(1)International domestic revenue relates to our intra-country operations.

(2)Includes the FedEx Office, FedEx Logistics, and FedEx Dataworks operating segments.

(3)International revenue includes shipments that either originate in or are destined to locations outside the United States, which could include U.S. payors. Noncurrent assets include property and equipment, operating lease right-of-use assets, goodwill, and other long-term assets. Our flight equipment is registered in the U.S. and is included as U.S. assets; however, many of our aircraft operate internationally.