v3.26.1
RELATED PARTY TRANSACTIONS
 12 Months Ended
May 31, 2026
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
Related Party Revenue and Purchases. FedEx Freight often provides transportation services to and receives services from other FedEx businesses. The nature of the services provided is similar to the services that FedEx Freight provides to its third-party customers. Revenue for these services was $158 million in 2026, $171 million in 2025, and $136 million in 2024. The costs for these services are reflected in the “Purchased transportation” line item in the accompanying Consolidated Statements of Income and were $6 million in 2026, $10 million in 2025, and $13 million in 2024.
All significant intercompany transactions between FedEx Freight and FedEx, other than those pertaining to centralized cash management, have been included in these accompanying consolidated financial statements and are considered to have been effectively settled at the time the transactions were recorded or are expected to be settled for cash. These amounts are included in the accompanying Consolidated Balance Sheets in the captions “Due from Parent” and “Due to Parent, net.” The total net effect of the settlement of these intercompany transactions is reflected in the accompanying Consolidated Statements of Cash Flows as an operating activity.
Shared Services and Corporate Allocations. Prior to the Spin-Off, FedEx Freight operated as part of FedEx and not as a stand-alone company. Accordingly, FedEx has historically allocated certain shared services and general corporate costs to FedEx Freight that are reflected as expenses in these accompanying consolidated financial statements including, but not limited to, information technology, marketing, sales, financial services, support services, customer experience, and corporate executives’ salaries and employee benefits. It is not practicable to estimate actual costs that would have been incurred had FedEx Freight been an independent, stand-alone company during the periods presented. The allocation methods used include specific identification when available or a pro rata basis of total revenue, headcount, specific revenue by function, transaction volume, or other relevant measures. Management considers these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, FedEx Freight.
Allocations for shared services and general corporate costs provided to FedEx Freight are reflected in the accompanying Consolidated Statements of Income as follows (in millions):
Years ended May 31,
202620252024
Operating expenses:
Salaries and employee benefits $285 $292 $253 
Rentals 7 8 8 
Depreciation and amortization 63 55 51 
Maintenance and repairs 29 29 28 
Other 232 244 233 
Total operating expenses $616 $628 $573 
Transaction Costs. Costs of $252 million were recognized by FedEx in connection with the Spin-Off and $492 million of Spin-Off-related costs were recognized by FedEx Freight for the year ended May 31, 2026. These costs include legal, consulting, and advisory services and an employee incentive plan associated with the Spin-Off and were recorded in the "Separation and other costs" line item in
these accompanying Consolidated Statements of Income. Approximately $56 million of costs related to the Spin-Off were incurred by FedEx in the year ended May 31, 2025. None of these costs were allocated to FedEx Freight’s consolidated financial statements.
Employee Benefits. Refer to Note 2, Summary of Significant Accounting Policies, for discussion of FedEx Freight’s participation in defined benefit, defined contribution, and stock-based compensation plans managed by FedEx.
Cash Management. The Company participated in FedEx’s centralized cash management program. Interest income received from FedEx for the cumulative amount of cash swept from FedEx Freight to FedEx is included in “Related party interest income” in the accompanying Consolidated Statements of Income and was $351 million in 2026, $388 million in 2025, and $330 million in 2024. On May 29, 2026, the Company's cash pooling arrangement with FedEx was terminated in preparation for the Spin-Off. See Note 1, Description of Business and Basis of Presentation, for additional information related to FedEx’s centralized cash management program.
Receivables. The Company historically factored certain U.S. trade receivables through another subsidiary of FedEx on a non-recourse basis pursuant to a factoring agreement. On November 30, 2025, the Company's factoring agreement with FedEx was terminated in preparation for the Spin-Off. As a result, no customer receivables were sold during the second half of the year ended May 31, 2026. The Company sold customer receivables of $4.1 billion in 2026, $8.3 billion in 2025, and $8.8 billion in 2024. Prior to the termination of the factoring agreement, these receivables were not recognized on the Company's Consolidated Balance Sheets. We incurred finance charges of $70 million in 2026, $151 million in 2025, and $150 million in 2024, which are included in the “Other” line item in the accompanying Consolidated Statements of Income.
There is no guarantee that the Company, if it desires to enter into a similar financing arrangement, will be able to enter into such an arrangement with a third-party or be able to sell similar volumes of U.S. trade receivables compared to the amounts historically sold to FedEx.
On November 18, 2025, the Company entered into a True Sale and Assignment Agreement with FedEx, effective December 1, 2025, under which the Company reacquired all outstanding U.S. trade receivables previously sold to FedEx under the Company's factoring arrangement described above for approximately $1.0 billion. This transaction was structured as a true sale without recourse, resulting in the Company resuming ownership and collection of its outstanding receivable balances. Additionally, as a result of this transaction and the termination of the Company's factoring agreement, accounts receivable balances presented in the accompanying Consolidated Balance Sheets as of May 31, 2026 have materially increased compared to the accounts receivables balances as of May 31, 2025.
Leases. FedEx is a named guarantor for certain of FedEx Freight’s third-party lease agreements for the periods presented. In 2025, we began the process of releasing FedEx as a guarantor to our lessors in contemplation of the Spin-Off. We and FedEx are currently using commercially reasonable efforts to terminate all such guarantees; however, some guarantees will remain in place following the Spin-Off until terminated.
Net Transfers to Parent. As described in Note 1, Description of Business and Basis of Presentation, net transfers to Parent represents FedEx’s historical investment in FedEx Freight and includes the net effect of transactions with and allocations from FedEx, FedEx Freight's cash distribution to FedEx, and FedEx Freight's accumulated earnings. Net transfers to and from Parent are included within “Net Transfers to Parent” in the accompanying Consolidated Statements of Changes in Equity and Consolidated Statements of Cash Flows for the years ended May 31 as follows (in millions):
202620252024
Cash pooling and general financing activities / other $16 $(1,102)$(1,185)
Transfer of net assets from FedEx, net357 — — 
Cash distribution to FedEx(4,122)— — 
Corporate and other allocations 54 36 12 
Income taxes 146 (7)52 
Total net transfers to Parent per Consolidated Statements of Changes in Equity (3,549)(1,073)(1,121)
Stock-based compensation – equity-classified awards(4)(4)(4)
Transfer of net assets from FedEx, net$(357)— — 
Total net transfers to Parent per Consolidated Statements of Cash Flows $(3,910)$(1,077)$(1,125)