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LEASES | 12 Months Ended
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May 31, 2025
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)
| 2025 |  | 2024
Operating lease cost | $ | 3,421 |  |  | $ | 3,326 |
Finance lease cost: |  |  |
Amortization of right-of-use assets | 31 |  |  | 30 |
Interest on lease liabilities | 17 |  |  | 24 |
Total finance lease cost | 48 |  |  | 54 |
Short-term lease cost | 484 |  |  | 494 |
Variable lease cost | 1,840 |  |  | 1,714 |
Net lease cost | $ | 5,793 |  |  | $ | 5,588 |
Supplemental cash flow information related to leases for the period ended May 31 is as follows (in millions):
| 2025 |  | 2024
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows paid for operating leases | $ | 3,422 |  |  | $ | 3,319 |
Operating cash flows paid for interest portion of finance leases | 17 |  |  | 15 |
Financing cash flows paid for principal portion of finance leases | 101 |  |  | 80 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,945 |  |  | 2,083 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 352 |  |  | 10 |
Supplemental balance sheet information related to leases as of May 31 is as follows (dollars in millions):
| 2025 |  | 2024
Operating leases: |  |  |
Operating lease right-of-use assets, net | $ | 16,453 |  | $ | 17,115
Current portion of operating lease liabilities | $ | 2,565 |  | $ | 2,463
Operating lease liabilities | 14,272 |  | 15,053
Total operating lease liabilities | $ | 16,837 |  | $ | 17,516
Finance leases: |  |  |
Net property and equipment | $ | 621 |  | $ | 373
Current portion of long-term debt | $ | 59 |  | $ | 18
Long-term debt, less current portion | 621 |  | 413
Total finance lease liabilities | $ | 680 |  | $ | 431
Weighted-average remaining lease term: |  |  |
Operating leases | 9.7 |  | 9.5
Finance leases | 19.6 |  | 29.8
Weighted-average discount rate: |  |  |
Operating leases | 3.98 | % |  | 3.79 | %
Finance leases | 3.90 | % |  | 3.63 | %
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, 2025 and less than 1% as of May 31, 2024. 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, 2025 is as follows (in millions):
| Aircraft and Related Equipment |  | Facilities and Other |  | Total Operating Leases |  | Finance Leases |  | Total Leases
2026 | $ | 126 |  |  | $ | 2,881 |  |  | $ | 3,007 |  |  | $ | 84 |  |  | $ | 3,091 |
2027 | 124 |  |  | 2,811 |  |  | 2,935 |  |  | 85 |  |  | 3,020 |
2028 | 124 |  |  | 2,450 |  |  | 2,574 |  |  | 84 |  |  | 2,658 |
2029 | 117 |  |  | 2,071 |  |  | 2,188 |  |  | 82 |  |  | 2,270 |
2030 | 47 |  |  | 1,731 |  |  | 1,778 |  |  | 74 |  |  | 1,852 |
Thereafter | 90 |  |  | 7,817 |  |  | 7,907 |  |  | 610 |  |  | 8,517 |
Total lease payments | 628 |  |  | 19,761 |  |  | 20,389 |  |  | 1,019 |  |  | 21,408 |
Less imputed interest | (67) |  |  | (3,485) |  |  | (3,552) |  |  | (339) |  |  | (3,891) |
Present value of lease liability | $ | 561 |  |  | $ | 16,276 |  |  | $ | 16,837 |  |  | $ | 680 |  |  | $ | 17,517 |
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, 2025, 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 $1.1 billion and will commence when FedEx gains beneficial access to the leased asset. Commencement dates are expected to be from calendar years 2025 to 2026. 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)
| 2025 |  | 2024
Operating lease cost | $ | 3,421 |  |  | $ | 3,326 |
Finance lease cost: |  |  |
Amortization of right-of-use assets | 31 |  |  | 30 |
Interest on lease liabilities | 17 |  |  | 24 |
Total finance lease cost | 48 |  |  | 54 |
Short-term lease cost | 484 |  |  | 494 |
Variable lease cost | 1,840 |  |  | 1,714 |
Net lease cost | $ | 5,793 |  |  | $ | 5,588 |
Supplemental cash flow information related to leases for the period ended May 31 is as follows (in millions):
| 2025 |  | 2024
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows paid for operating leases | $ | 3,422 |  |  | $ | 3,319 |
Operating cash flows paid for interest portion of finance leases | 17 |  |  | 15 |
Financing cash flows paid for principal portion of finance leases | 101 |  |  | 80 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,945 |  |  | 2,083 |
Right-of-use assets obtained in exchange for new finance lease liabilities | 352 |  |  | 10 |
Supplemental balance sheet information related to leases as of May 31 is as follows (dollars in millions):
| 2025 |  | 2024
Operating leases: |  |  |
Operating lease right-of-use assets, net | $ | 16,453 |  | $ | 17,115
Current portion of operating lease liabilities | $ | 2,565 |  | $ | 2,463
Operating lease liabilities | 14,272 |  | 15,053
Total operating lease liabilities | $ | 16,837 |  | $ | 17,516
Finance leases: |  |  |
Net property and equipment | $ | 621 |  | $ | 373
Current portion of long-term debt | $ | 59 |  | $ | 18
Long-term debt, less current portion | 621 |  | 413
Total finance lease liabilities | $ | 680 |  | $ | 431
Weighted-average remaining lease term: |  |  |
Operating leases | 9.7 |  | 9.5
Finance leases | 19.6 |  | 29.8
Weighted-average discount rate: |  |  |
Operating leases | 3.98 | % |  | 3.79 | %
Finance leases | 3.90 | % |  | 3.63 | %
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, 2025 and less than 1% as of May 31, 2024. 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, 2025 is as follows (in millions):
| Aircraft and Related Equipment |  | Facilities and Other |  | Total Operating Leases |  | Finance Leases |  | Total Leases
2026 | $ | 126 |  |  | $ | 2,881 |  |  | $ | 3,007 |  |  | $ | 84 |  |  | $ | 3,091 |
2027 | 124 |  |  | 2,811 |  |  | 2,935 |  |  | 85 |  |  | 3,020 |
2028 | 124 |  |  | 2,450 |  |  | 2,574 |  |  | 84 |  |  | 2,658 |
2029 | 117 |  |  | 2,071 |  |  | 2,188 |  |  | 82 |  |  | 2,270 |
2030 | 47 |  |  | 1,731 |  |  | 1,778 |  |  | 74 |  |  | 1,852 |
Thereafter | 90 |  |  | 7,817 |  |  | 7,907 |  |  | 610 |  |  | 8,517 |
Total lease payments | 628 |  |  | 19,761 |  |  | 20,389 |  |  | 1,019 |  |  | 21,408 |
Less imputed interest | (67) |  |  | (3,485) |  |  | (3,552) |  |  | (339) |  |  | (3,891) |
Present value of lease liability | $ | 561 |  |  | $ | 16,276 |  |  | $ | 16,837 |  |  | $ | 680 |  |  | $ | 17,517 |
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, 2025, 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 $1.1 billion and will commence when FedEx gains beneficial access to the leased asset. Commencement dates are expected to be from calendar years 2025 to 2026. 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.

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