FedEx Freight Holding Company, Inc 10-K for FY2026

FedEx Freight Holding Company, Inc. (FDXF)

10-K 2026-08-05 For: 2026-05-31

Added on August 05, 2026

About this 10-K

FedEx Freight Holding Company, Inc filed this 10-K on August 5, 2026, covering the fiscal year ended May 31, 2026 (FY2026).

Headline figures

Fiscal year ended May 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.8B; down 1.1% from $8.89B a year earlier
Net income: $655M; down 51.3% from net income of $1.35B a year earlier
Diluted EPS: $4.38; down 51.3% from $9.00 a year earlier

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Delaware			39-3560171
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


8285 Tournament Drive			38125
Memphis, Tennessee			(ZIP code)
(Address of principal executive offices)


Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	FDXF	New York Stock Exchange


			Page

PART I

Item 1. Business			2
Item 1A. Risk Factors			7
Item 1B. Unresolved Staff Comments			19
Item 1C. Cybersecurity			19
Item 2. Properties			20
Item 3. Legal Proceedings			21
Item 4. Mine Safety Disclosures			21


PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities			22
Item 6. [Reserved]			22
Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition			23
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			32
Item 8. Financial Statements and Supplementary Data			33
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			59
Item 9A. Controls and Procedures			59
Item 9B. Other Information			59
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			59

PART III

Item 10. Directors, Executive Officers, and Corporate Governance			60
Item 11. Executive Compensation			65
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			92
Item 13. Certain Relationships and Related Transactions, and Director Independence			93
Item 14. Principal Accountant Fees and Services			99

PART IV

Item 15. Exhibits and Financial Statement Schedules			101
Item 16. Form 10-K Summary			103


	Years Ended May 31,
	2026			2025			Percent Change
Revenue	$	8,795		$	8,892		(1)
Operating income	$	540		$	1,404		(62)
Operating margin	6.1		%	15.8		%	(970)	bp
Net income	$	655		$	1,346		(51)
Diluted earnings per share(1)	$	4.38		$	9.00		(51)


☑			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


FedEx Freight Holding Company, Inc.
(Exact name of registrant as specified in its charter)


901-560-0784
(Registrant's telephone number, including area code)


(1)			Immediately prior to the Spin-Off, the Company effected a recapitalization whereby its 100 issued and outstanding shares of common stock were reclassified and converted into 149,505,248 shares of common stock. All historical share and per-share amounts presented herein have been retrospectively adjusted to reflect this recapitalization.


	Years Ended May 31,						Percent Change		Percent of Revenue
	2026			2025					2026		2025
Revenue	$	8,795		$	8,892		(1)		100.0	%	100.0	%
Operating expenses:
Salaries and employee benefits	4,276			4,157			3		48.6		46.7
Purchased transportation	807			807			—		9.2		9.1
Rentals	308			295			4		3.5		3.3
Depreciation and amortization	512			471			9		5.8		5.3
Fuel	486			457			6		5.6		5.1
Maintenance and repairs	343			362			(5)		3.9		4.1
Separation and other costs	492			—			NM		5.6		—
Other	1,031			939			10		11.7		10.6
Total operating expenses	8,255			7,488			10		93.9	%	84.2	%
Operating income	$	540		$	1,404		(62)
Operating margin	6.1		%	15.8		%	(970)	bp
Operating days	252			252			—
Average daily shipments (in thousands):
Priority	59.5			61.8			(4)
Economy	26.6			28.3			(6)
Total average daily shipments	86.1			90.1			(4)
Weight per shipment (pounds):
Priority	933			941			(1)
Economy	925			873			6
Composite weight per shipment	931			920			1
Revenue per shipment (dollars):
Priority	$	370.90		$	358.84		3
Economy	421.78			405.53			4
Composite revenue per shipment	$	386.63		$	373.52		4
Revenue per hundredweight (dollars):
Priority	$	39.74		$	38.13		4
Economy	45.60			46.46			(2)
Composite revenue per hundredweight	$	41.54		$	40.61		2


FedEx Freight Holding Company, Inc.
Index to Consolidated Financial Statements
			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)			34
Consolidated Balance Sheets			36
Consolidated Statements of Income			38
Consolidated Statements of Cash Flows			39
Consolidated Statements of Changes in Equity			40


						Valuation of Self-Insurance Reserves
Description of the Matter						As disclosed in Note 2 to the consolidated financial statements, a portion of FedEx Corporation’s self-insurance reserve associated with workers’ compensation claims, vehicle accidents, and property and general business liabilities is attributable to the Company. These reserves are based on actuarially estimated claim costs incurred by the Company as of the balance sheet date. As of May 31, 2026, $330 million of self-insurance reserves attributable to the Company were assumed by FedEx Corporation and included in net transfers from (to) Parent in the consolidated statement of changes in equity.
						Auditing the estimated self-insurance claims costs attributable to the Company and assumed by FedEx Corporation for workers’ compensation claims and vehicle accidents is complex due to the significant measurement uncertainty inherent to the estimate, the application of management judgment, and the use of various actuarial methods. In addition, these estimates are sensitive due to the volume of claims and the amount of time that can pass before the final cost is known.

How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design of controls and tested the operating effectiveness of controls over management’s process for estimating self-insurance reserves, including the review of actuarial estimates and underlying data for determining the appropriate amount to be assumed by FedEx Corporation.


						To evaluate the self-insurance claims costs attributable to the Company and assumed by FedEx Corporation, our audit procedures included, among others, testing the completeness and accuracy of the underlying claims data used in the actuarial analyses. We involved our actuarial specialists to assist in evaluating the actuarial methodologies and assumptions used by management and in independently developing a range of reasonable reserve estimates for comparison to management’s estimate. In addition, we compared the Company’s historical estimates of expected incurred losses to actual losses experienced during the current year. We also evaluated the Company’s disclosures in relation to these reserves.


	May 31,
	2026		2025
ASSETS
CURRENT ASSETS
Cash	$	251	$	109
Receivables, less allowances of $204 and $14	1,154		132
Due from Parent	18		—
Prepaid expenses and other	83		43
Total current assets	1,506		284
PROPERTY AND EQUIPMENT, AT COST
Vehicles and trailers	3,850		3,964
Facilities and other	1,672		1,512
Ground support and dock equipment	628		621
Information technology	520		397
Total property and equipment, at cost	6,670		6,494
Less accumulated depreciation and amortization	3,747		3,714
Net property and equipment	2,923		2,780
OTHER LONG-TERM ASSETS
Operating lease right-of-use assets, net	1,824		1,352
Goodwill	602		602
Other assets	29		4
Total other long-term assets	2,455		1,958
TOTAL ASSETS	$	6,884	$	5,022


FORM 10-K


	Years Ended May 31,
	2026		2025
Operating activities:
Net income	$	655	$	1,346
Separation and other costs, net of payments	135		—
Other noncash charges and credits	790		673
Changes in assets and liabilities	(1,413)		(488)
Cash provided by operating activities	167		1,531
Investing activities:
Capital expenditures	(379)		(437)
Proceeds from asset dispositions and other	16		52
Cash used in investing activities	(363)		(385)
Financing activities:
Principal payments on debt	(26)		(63)
Proceeds from debt issuances	4,271		—
Net transfers to Parent	(3,910)		(1,077)
Cash provided by (used in) financing activities	335		(1,140)
Effect of exchange rate changes on cash	3		(3)
Net increase in cash	142		3
Cash at end of period	$	251	$	109


	May 31,
	2026		2025
LIABILITIES AND (DEFICIT) EQUITY
CURRENT LIABILITIES
Current portion of long-term debt	$	43	$	7
Accrued salaries and employee benefits	389		227
Accounts payable	106		150
Due to Parent, net	—		5
Operating lease liabilities	172		172
Accrued expenses	283		212
Total current liabilities	993		773
LONG-TERM LIABILITIES
Long-term debt, less current portion	4,484		66
Deferred income taxes	220		235
Self-insurance accruals	13		315
Operating lease liabilities	1,666		1,188
Other liabilities	5		52
Total long-term liabilities	6,388		1,856
CONTINGENCIES
(DEFICIT) EQUITY
Common stock, $0.10 par value; 149,505,248 shares authorized, issued, and outstanding as of May 31, 2026	15		—
Additional paid-in capital	—		—
(Accumulated deficit) Retained earnings	(509)		2,400
Accumulated other comprehensive loss	(3)		(7)
Total (deficit) equity	(497)		2,393
TOTAL LIABILITIES AND (DEFICIT) EQUITY	$	6,884	$	5,022


	Years ended May 31,
	2026		2025		2024
OPERATING ACTIVITIES
Net income	$	655	$	1,346	$	1,574
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	449		416		404
Provision for uncollectible accounts	91		19		11
Other noncash items including leases and deferred income taxes	237		228		157
Stock-based compensation	13		10		12
Separation and other costs, net of payments	135		—		—
Changes in assets and liabilities:
Receivables	(1,153)		—		(9)
Other current assets	(39)		16		22
Accounts payable and other liabilities	(169)		(255)		(233)
Due to Parent, net	(32)		(255)		(397)
Other, net	(20)		6		—
Cash provided by operating activities	167		1,531		1,541

INVESTING ACTIVITIES
Capital expenditures	(379)		(437)		(461)
Proceeds from asset dispositions and other	16		52		58
Cash used in investing activities	(363)		(385)		(403)

FINANCING ACTIVITIES
Principal payments on debt	(26)		(63)		(1)
Proceeds from debt issuances	4,271		—		—
Net transfers to Parent	(3,910)		(1,077)		(1,125)
Cash provided by (used in) financing activities	335		(1,140)		(1,126)
Effect of exchange rate changes on cash	3		(3)		1
Net increase in cash	142		3		13
Cash at beginning of period	109		106		93
Cash at end of period	$	251	$	109	$	106


	Common Stock		Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Total
Balance at May 31, 2023	$	—	$	—	$	1,674	$	(3)	$	1,671
Net income	—		—		1,574		—		1,574
Net transfers to Parent(1)	—		—		(1,121)		—		(1,121)
Balance at May 31, 2024	—		—		2,127		(3)		2,124
Net income	—		—		1,346		—		1,346
Foreign currency translation adjustments	—		—		—		(4)		(4)
Net transfers to Parent(1)	—		—		(1,073)		—		(1,073)
Balance at May 31, 2025	—		—		2,400		(7)		2,393
Net income	—		—		655		—		655
Foreign currency translation adjustments	—		—		—		4		4
Recapitalization	15		—		(15)		—		—
Net transfers from (to) Parent(1)	—		—		(3,549)		—		(3,549)
Balance at May 31, 2026	$	15	$	—	$	(509)	$	(3)	$	(497)


		Net Book Value at May 31,
	Range	2026		2025
Vehicles and trailers	3 – 15 years	$	1,582	$	1,553
Facilities and other	10 – 33 years	956		890
Ground support and dock equipment	3 – 15 years	233		255
Information technology	3 – 7 years	152		82


	Interest Rate %		Fiscal Year of Maturity	May 31,
				2026		2025
Unsecured debt:
Term loan facility	4.91	%	2029	$	599	$	—
Senior unsecured note	4.30	%	2029	993		—
Senior unsecured note	4.65	%	2031	991		—
Senior unsecured note	4.95	%	2033	693		—
Senior unsecured note	5.25	%	2036	988		—
Total unsecured debt				4,264		—
Finance lease liabilities				263		73
				4,527		73
Less current portion(1)				43		7
				$	4,484	$	66


Year	Debt Principal
2027	$	—
2028	—
2029	1,600
2030	—
2031	1,000
Thereafter	1,700
Subtotal	4,300
Discount and debt issuance costs	(36)
Total	$	4,264


	2026		2025














Weighted-average remaining lease term:
Operating leases	9.2		8.3
Finance leases	6.1		9.1

Weighted-average discount rate:
Operating leases	4.42	%	3.96	%
Finance leases	4.89	%	5.50	%


	Operating Leases		Finance Leases		Total Leases
2027	$	261	$	55	$	316
2028	259		56		315
2029	238		56		294
2030	228		55		283
2031	216		32		248
Thereafter	1,162		55		1,217
Total lease payments	2,364		309		2,673
Less imputed interest	(526)		(46)		(572)
Present value of lease liability	$	1,838	$	263	$	2,101


	2026
Taxes computed at federal statutory rate	$	186	21.0	%
State and local income taxes, net of federal benefit (1)	42		4.8	%
Foreign tax effects	9		1.0	%
Tax credits	(6)		(0.7)	%
Changes in valuation allowance	4		0.5	%
Other, net	(6)		(0.7)	%
Income Tax Expense	$	229	25.9	%


	2026				2025
	Deferred tax asset		Deferred tax liabilities		Deferred tax asset		Deferred tax liabilities
Property, equipment, leases and intangibles	$	503	$	(825)	$	375	$	(758)
Employee benefits	84		—		52		—
Self-insurance accruals	16		—		111		—
Other	30		(22)		20		(33)
Net operating loss/credit carryforwards	12		—		8		—
Valuation allowances	(12)		—		(8)		—
	$	633	$	(847)	$	558	$	(791)


	2026		2025
Noncurrent deferred tax assets(1)	$	6	$	2
Noncurrent deferred tax liabilities	(220)		(235)
	$	(214)	$	(233)


	2026
U.S. federal	$	—
Pennsylvania	2
Other U.S. state & local	9
Canada	15
Mexico	2
Other foreign	1
Total income taxes paid, net of refunds	$	29


Annual Retainer:			$110,000
Additional Cash Retainer to Chair of a Committee:			$25,000 for each committee chaired
Annual Equity Grant (Excluding Chairman of the Board):			Restricted stock unit (“RSU”) grant with a grant date value of $175,000
Annual Equity Grant for Chairman of the Board:			RSU grant with a grant date value of $500,000


Name						Annual Base Salary ($)
J.A. Smith						939,385
M.W. Witt						585,000
C.E. Klank						468,370
C.D. McCoy						375,155
M. Rodgers						489,250


Name	Target Payout (As a Percentage of Base Salary)
J.A. Smith	120	%
M.W. Witt	50	%
C.E. Klank	50	%
C.D. McCoy	50	%
M. Rodgers	50	%


Performance Measure	Threshold			Target			Maximum			Actual
2026 FedEx Executive AIC Plan Performance Measures
Adjusted Consolidated Operating Income	$	5,193		$	5,823		$	6,390		$	6,611
Incremental Structural Cost Reduction Benefits	$	0.00		$	2.04		$	2.04		$	2.03
On-time Service Performance	95.25		%	96.25		%	96.25		%	95.50		%
2026 FedEx Freight AIC Plan Performance Measure
Adjusted FedEx Freight Segment Operating Income(1)	$	1,427		$	1,492		$	1,597		$	1,108


Name	Target AIC Payout ($)	Actual AIC Payout ($)
J.A. Smith	1,116,318	1,255,858
M.W. Witt(1)	195,000	48,750
C.E. Klank(2)	231,912	95,872
C.D. McCoy	185,757	46,439
M. Rodgers	242,250	60,563


Name	Threshold LTI Payout ($)	Target LTI Payout ($)	Maximum LTI Payout ($)	Actual LTI Payout ($)
J.A. Smith	125,000	2,000,000	4,000,000	2,584,000
M.W. Witt(1)	3,611	57,778	115,556	74,649
C.E. Klank	19,288	308,611	617,223	401,218
C.D. McCoy	16,250	260,000	520,000	335,920
M. Rodgers(1)	5,417	86,666	173,333	111,973


Name	Number of Stock Options(1)	Number of Shares of Restricted Stock(2)
J.A. Smith	16,105	6,325
M.W. Witt	1,838	1,722
C.E. Klank	3,220	1,155
C.D. McCoy	1,945	870
M. Rodgers	1,945	995


Name	Performance Period	Projected Payout %		Projected Payout ($)
J.A. Smith	FY25-FY27	75.5	%	$	1,510,000
	FY26-FY28	95.9	%	$	1,918,000
M.W. Witt(1)	FY25-FY27	75.5	%	$	136,319
	FY26-FY28	95.9	%	$	277,044
C.E. Klank	FY25-FY27	75.5	%	$	245,375
	FY26-FY28	95.9	%	$	311,675
C.D. McCoy	FY25-FY27	75.5	%	$	245,375
	FY26-FY28	95.9	%	$	311,675
M. Rodgers	FY25-FY27	75.5	%	$	163,583
	FY26-FY28	95.9	%	$	311,675


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Name	Target Payout (as a percentage of annual base salary rate prorated for TY26)
J.A. Smith	175	%
M.W. Witt	100	%
C.E. Klank	100	%
C.D. McCoy	100	%
M. Rodgers	100	%