v3.26.1
LEASES
 12 Months Ended
May 31, 2026
Leases [Abstract]  
LEASES LEASES
The following table is a summary of the components of net lease cost for the period ended May 31 (in millions)
2026
2025
Operating lease cost
$
3,518 
$
3,421 
Finance lease cost:
Amortization of right-of-use assets
68 
31 
Interest on lease liabilities
36 
17 
Total finance lease cost
104 
48 
Short-term lease cost
499 
484 
Variable lease cost
1,925 
1,840 
Net lease cost
$
6,046 
$
5,793 
Supplemental cash flow information related to leases for the period ended May 31 is as follows (in millions):
20262025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases$3,511 $3,422 
Operating cash flows paid for interest portion of finance leases34 17 
Financing cash flows paid for principal portion of finance leases254 101 
Right-of-use assets obtained in exchange for new operating lease liabilities3,273 1,945 
Right-of-use assets obtained in exchange for new finance lease liabilities1,086 352 
Supplemental balance sheet information related to leases as of May 31 is as follows (dollars in millions):
20262025
Operating leases:
Operating lease right-of-use assets, net$16,822$16,453
Current portion of operating lease liabilities$2,680$2,565
Operating lease liabilities14,54914,272
Total operating lease liabilities$17,229$16,837
Finance leases:
Net property and equipment$1,609$621
Current portion of long-term debt$170$59
Long-term debt, less current portion1,344621
Total finance lease liabilities$1,514$680
Weighted-average remaining lease term:
Operating leases9.29.7
Finance leases10.219.6
Weighted-average discount rate:
Operating leases4.22 %3.98 %
Finance leases4.06 %3.90 %
We utilize certain aircraft, land, facilities, retail locations, and equipment under finance and operating leases that expire at various dates through 2078. We leased less than 1% of our total aircraft fleet under operating leases as of May 31, 2026 and less than 1% as of May 31, 2025. A portion of our supplemental aircraft are leased by us under agreements that provide for cancellation upon 30 days’ notice. Our leased facilities include national, regional, and metropolitan sorting facilities; retail facilities; and administrative buildings.
A summary of future minimum lease payments under non-cancelable operating and finance leases with an initial or remaining term in excess of one year at May 31, 2026 is as follows (in millions):
Aircraft
and Related
Equipment		Facilities
and Other		Total
Operating
Leases		Finance LeasesTotal Leases
2027$130 $3,130 $3,260 $233 $3,493 
2028119 2,882 3,001 543 3,544 
2029112 2,469 2,581 218 2,799 
2030103 2,104 2,207 201 2,408 
2031103 1,733 1,836 110 1,946 
Thereafter296 7,845 8,141 609 8,750 
Total lease payments863 20,163 21,026 1,914 22,940 
Less imputed interest(138)(3,659)(3,797)(400)(4,197)
Present value of lease liability$725 $16,504 $17,229 $1,514 $18,743 
While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations.
As of May 31, 2026, FedEx has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases are generally for build-to-suit facilities and equipment and have undiscounted future payments of approximately $1.4 billion and will commence when FedEx gains beneficial access to the leased asset. Commencement dates are expected to be from calendar years 2026 to 2028.
Federal Express makes payments under certain leveraged operating leases that are sufficient to pay principal and interest on certain pass-through certificates. The pass-through certificates are not direct obligations of, or guaranteed by, FedEx or Federal Express.
We are the lessee under certain leases covering a portion of our leased aircraft in which the lessors are trusts established specifically to purchase, finance, and lease these aircraft to us. These leasing entities are variable interest entities. We are not the primary beneficiary of the leasing entities, as the lease terms are at market at the inception of the lease and do not include a residual value guarantee, fixed-price purchase option, or similar feature that obligates us to absorb decreases in value or entitles us to participate in increases in the value of the aircraft. Therefore, we are not required to consolidate any of these entities as the primary beneficiary. Our maximum exposure under these leases is included in the summary of future minimum lease payments.
LEASES LEASES
The following table is a summary of the components of net lease cost for the period ended May 31 (in millions)
2026
2025
Operating lease cost
$
3,518 
$
3,421 
Finance lease cost:
Amortization of right-of-use assets
68 
31 
Interest on lease liabilities
36 
17 
Total finance lease cost
104 
48 
Short-term lease cost
499 
484 
Variable lease cost
1,925 
1,840 
Net lease cost
$
6,046 
$
5,793 
Supplemental cash flow information related to leases for the period ended May 31 is as follows (in millions):
20262025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases$3,511 $3,422 
Operating cash flows paid for interest portion of finance leases34 17 
Financing cash flows paid for principal portion of finance leases254 101 
Right-of-use assets obtained in exchange for new operating lease liabilities3,273 1,945 
Right-of-use assets obtained in exchange for new finance lease liabilities1,086 352 
Supplemental balance sheet information related to leases as of May 31 is as follows (dollars in millions):
20262025
Operating leases:
Operating lease right-of-use assets, net$16,822$16,453
Current portion of operating lease liabilities$2,680$2,565
Operating lease liabilities14,54914,272
Total operating lease liabilities$17,229$16,837
Finance leases:
Net property and equipment$1,609$621
Current portion of long-term debt$170$59
Long-term debt, less current portion1,344621
Total finance lease liabilities$1,514$680
Weighted-average remaining lease term:
Operating leases9.29.7
Finance leases10.219.6
Weighted-average discount rate:
Operating leases4.22 %3.98 %
Finance leases4.06 %3.90 %
We utilize certain aircraft, land, facilities, retail locations, and equipment under finance and operating leases that expire at various dates through 2078. We leased less than 1% of our total aircraft fleet under operating leases as of May 31, 2026 and less than 1% as of May 31, 2025. A portion of our supplemental aircraft are leased by us under agreements that provide for cancellation upon 30 days’ notice. Our leased facilities include national, regional, and metropolitan sorting facilities; retail facilities; and administrative buildings.
A summary of future minimum lease payments under non-cancelable operating and finance leases with an initial or remaining term in excess of one year at May 31, 2026 is as follows (in millions):
Aircraft
and Related
Equipment		Facilities
and Other		Total
Operating
Leases		Finance LeasesTotal Leases
2027$130 $3,130 $3,260 $233 $3,493 
2028119 2,882 3,001 543 3,544 
2029112 2,469 2,581 218 2,799 
2030103 2,104 2,207 201 2,408 
2031103 1,733 1,836 110 1,946 
Thereafter296 7,845 8,141 609 8,750 
Total lease payments863 20,163 21,026 1,914 22,940 
Less imputed interest(138)(3,659)(3,797)(400)(4,197)
Present value of lease liability$725 $16,504 $17,229 $1,514 $18,743 
While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations.
As of May 31, 2026, FedEx has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases are generally for build-to-suit facilities and equipment and have undiscounted future payments of approximately $1.4 billion and will commence when FedEx gains beneficial access to the leased asset. Commencement dates are expected to be from calendar years 2026 to 2028.
Federal Express makes payments under certain leveraged operating leases that are sufficient to pay principal and interest on certain pass-through certificates. The pass-through certificates are not direct obligations of, or guaranteed by, FedEx or Federal Express.
We are the lessee under certain leases covering a portion of our leased aircraft in which the lessors are trusts established specifically to purchase, finance, and lease these aircraft to us. These leasing entities are variable interest entities. We are not the primary beneficiary of the leasing entities, as the lease terms are at market at the inception of the lease and do not include a residual value guarantee, fixed-price purchase option, or similar feature that obligates us to absorb decreases in value or entitles us to participate in increases in the value of the aircraft. Therefore, we are not required to consolidate any of these entities as the primary beneficiary. Our maximum exposure under these leases is included in the summary of future minimum lease payments.