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FINANCING ARRANGEMENTS
 4 Months Ended
Sep. 30, 2026
Debt Disclosure [Abstract]  
FINANCING ARRANGEMENTS FINANCING ARRANGEMENTS
Long-Term Debt
We have a shelf registration statement filed with the SEC that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock and allows pass-through trusts formed by Federal Express to sell, in one or more future offerings, pass-through certificates.
Long-term debt, including current maturities and exclusive of finance leases, had carrying values of $17.6 billion at September 30, 2026 and $19.2 billion at May 31, 2026, with estimated fair values of $16.0 billion at September 30, 2026 and $17.3 billion at May 31, 2026. The annualized weighted-average interest rate on long-term debt was 3.75% at September 30, 2026. The estimated fair values were determined based on quoted market prices and the
current rates offered for debt with similar terms and maturities. The fair value of our long-term debt is classified as Level 2 within the fair value hierarchy.
On September 14, 2026, we issued additional senior unsecured debt securities pursuant to our current shelf registration statement, comprised of $1.1 billion of 5.750% notes due 2036, €1.1 billion of 4.000% notes due 2030, and €900 million of 4.625% notes due 2034. The net proceeds from these offerings will be used for general corporate purposes, which may include the redemption or repayment of outstanding indebtedness. Pending such use, we may invest the net proceeds in short-term investments, including cash, cash equivalents and/or marketable securities.
On July 14, 2026, we completed cash tender offers for certain series of our outstanding debt securities, resulting in the repurchase of approximately $4.9 billion aggregate principal amount of such securities. The securities repurchased consisted of (in millions):
Title of Series of Notes Principal Amount Repurchased Original Principal Amount
4.500% notes due 2065
$123 $250 
3.250% notes due 2041
437 750 
4.050% notes due 2048
491 1,000 
3.875% notes due 2042
236 500 
4.100% notes due 2045
385 650 
4.100% notes due 2043
195 500 
4.400% notes due 2047
464 750 
4.550% notes due 2046
594 1,250 
4.750% notes due 2045
590 1,250 
2.400% notes due 2031
508 1,000 
4.950% notes due 2048
447 850 
3.900% notes due 2035
253 500 
5.100% notes due 2044
135 750 
$4,858 $10,000 
We utilized cash proceeds from the approximately $4.1 billion dividend received from FedEx Freight in connection with the Spin-Off, as well as cash on hand, to fund the cash tender offers. We recognized an approximately $627 million gain on partial extinguishment of debt during the three months ended September 30, 2026, which is included in “Other non-operating, net” in the accompanying unaudited condensed consolidated statements of income. In determining the value of the gain, we expensed the proportional amount of the related unamortized discount, premium and debt issuance costs attributable to the repurchased securities.
In connection with the Spin-Off, FedEx Freight issued $3.7 billion of senior unsecured debt and borrowed $600 million under a three-year delayed draw term loan facility. FedEx Freight used the net proceeds from these debt issuances to make a dividend of $4.1 billion to FedEx upon completion of the Spin-Off on June 1, 2026. As a result, these borrowings are reported in “Non-current liabilities of discontinued operations” within the condensed consolidated balance sheet for the period ended May 31, 2026 and were no longer an obligation of FedEx as of June 1, 2026.
Credit Agreements
We have a $1.75 billion three-year credit agreement (the “Three-Year Credit Agreement”) with an expiration of March 2028 and a $1.75 billion five-year credit agreement with an expiration of March 2030 (the “Five-Year Credit Agreement” and together with the Three-Year Credit Agreement, the “Credit Agreements”). Each of the Credit Agreements has a $125 million letter of credit sublimit. The Credit Agreements are available to finance our operations and other cash flow needs. As of September 30, 2026, no amounts were outstanding under the Credit Agreements, no commercial paper was outstanding under our commercial paper program, and approximately $3.5 billion of borrowing capacity remained available under the Credit Agreements. Our commercial paper program is supported by unused commitments under the Credit Agreements, and borrowings under the program reduce the amount available under the Credit Agreements.
The Credit Agreements contain a financial covenant that requires FedEx to maintain a ratio of debt to consolidated adjusted earnings before interest, tax, depreciation, and amortization (“adjusted EBITDA”) not exceeding 3.5 to 1.0, subject to specified adjustments and definitions contained in the agreements, as of the last day of each fiscal quarter on a rolling four quarters basis. FedEx was in compliance with all financial covenants and other restrictive provisions as of September 30, 2026. Management monitors available liquidity, debt maturities, covenant compliance, capital markets access, and refinancing opportunities as part of its ongoing treasury activities. The ratio of our debt to adjusted EBITDA was 1.9 at September 30, 2026. Additional information on the financial covenant can be found in our Annual Report.
The financial covenant discussed above is the only significant restrictive covenant in the Credit Agreements. The Credit Agreements contain other customary covenants that do not, individually or in the aggregate, materially restrict the conduct of our business. We are in compliance with the financial covenant and all other covenants in the Credit Agreements and do not expect the covenants to affect our operations, including our liquidity or expected funding needs. If we failed to comply with the financial covenant or any other covenants in the Credit Agreements, our access to financing could become limited.