Transportation & Logistics: Related party transactions (ASC 850)

in preparation for the Spin-off. For additional information regarding our prior factoring agreement with FedEx, see Note 2, Summary of Significant Accounting Policies , and Note 10, Related Party Transactions , of the accompanying consolidated financial statements.

Cash Used in Investing Activities. Capital expenditures were 13% lower in 2026 primarily due to decreased spending on vehicles and trailers and ground support and dock equipment, partially offset by increased spending on facilities and other and information technology.

See “ — Capital Resources ” for a more detailed discussion of capital expenditures during 2026.

Cash Provided by (Used in) Financing Activities. Cash provided by financing activities primarily reflects debt proceeds and net transfers to FedEx. In 2026, cash provided by financing activities increased $1.5 billion, driven by $4.3 billion in proceeds from our debt issuance, partially offset by a $2.8 billion increase in net transfers to FedEx. For additional information related to FedEx’s centralized cash management program see Note 1, Description of Business and Basis of Presentation , and Note 10, Related Party Transactions , to the accompanying consolidated financial statements.

Capital Resources

Our operations are capital intensive, characterized by significant investments in vehicles and trailers, facilities, ground support and dock equipment, and technology. The amount and timing of capital investments depend on various factors, including pre-existing contractual commitments, anticipated volume growth, economic conditions, new or enhanced services, geographical expansion of services, availability of satisfactory financing, and actions of regulatory authorities.

The following table compares capital expenditures by asset category (in millions):