On May 13, 2026, the FedEx Board of Directors declared a pro rata dividend of 80.1% of the outstanding shares of common stock of FedEx Freight to FedEx’s stockholders of record as of the close of business on the Record Date to effect the Spin-Off. On June 1, 2026, FedEx stockholders received one share of FedEx Freight common stock for every two shares of FedEx common stock held as of the Record Date. As further discussed in Note 4, FedEx retained a 19.9% ownership interest in FedEx Freight common stock.

The Spin-Off was structured as a tax-free transaction for U.S. federal income tax purposes. In connection with the Spin-Off, we entered into various agreements with FedEx Freight to effect the separation and provide a framework for our post-separation relationship. These arrangements, together with our temporary retained ownership interest, do not constitute significant continuing involvement in FedEx Freight. We did not recognize a gain or loss upon completion of the Spin-Off because the transaction was achieved through a pro rata distribution to our shareholders and no consideration was received.

Following the Spin-Off, the results, assets and liabilities of FedEx Freight are reported as discontinued operations and excluded from both continuing operations and segment results for all reporting periods, including comparable historical periods. The statement of cash flows has not been recast to reflect discontinued operations for any periods presented. Supplemental disclosure of operating and investing cash flows from discontinued operations is included below.


	Three Months Ended		Four Months Ended
	September 30, 2025		September 30, 2025
REVENUE	$	2,220	$	2,954
OPERATING EXPENSES:
Salaries and employee benefits	1,022		1,349
Purchased transportation	198		263
Rentals and landing fees	75		99
Fuel	116		151
Depreciation and amortization	110		148
Maintenance and repairs	83		110


Other, net	243		307
	1,847		2,427
OPERATING INCOME	373		527
OTHER (EXPENSE) INCOME	1		3

INCOME BEFORE INCOME TAXES	374		530
PROVISION FOR INCOME TAXES	99		139
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES	$	275	$	391


	May 31,
	2026
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	251
Receivables, less allowances	1,154
Prepaid expenses and other	83
Current assets of discontinued operations	1,488


PROPERTY AND EQUIPMENT, NET	2,922
OTHER LONG-TERM ASSETS
Operating lease right-of-use assets, net	1,824
Goodwill and other assets	661
Total other long-term assets	2,485
Non-current assets of discontinued operations	$	5,407


LIABILITIES
CURRENT LIABILITIES
Accrued and other liabilities	$	504
Accrued salaries and employee benefits	388
Accounts and notes payable	106

Current liabilities of discontinued operations	998
LONG-TERM DEBT, LESS CURRENT PORTION	4,484
OTHER LONG-TERM LIABILITIES
Deferred income taxes	221
Self-insurance accruals	13
Operating lease liabilities	1,666
Other liabilities	4
Total other long-term liabilities	1,904
Non-current liabilities of discontinued operations	$	6,388

The operating, investing, and financing cash flows of FedEx Freight's discontinued operations are not separately presented on the face of the Condensed Consolidated Statements of Cash Flows. The following table presents the operating and investing cash flows attributable to discontinued operations (in millions):