v3.26.3
RELATED PARTY TRANSACTIONS
 4 Months Ended
Sep. 30, 2026
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
RELATIONSHIP WITH FEDEX. Prior to the Spin-Off, FedEx Freight was a wholly owned subsidiary of FedEx. On June 1, 2026, FedEx completed the Spin-Off, after which FedEx Freight began operating as an independent, publicly traded company. Following the Spin-Off, FedEx retained 19.9% of the outstanding shares of our common stock. We operate as an independent, publicly traded company; however, FedEx remains a significant stockholder of FedEx Freight and we continue to have certain commercial and other relationships with FedEx. Accordingly, FedEx and its affiliates are considered related parties of the Company.
RELATED PARTY REVENUE AND PURCHASES. FedEx Freight provides transportation services to and receives services from FedEx. The nature of the services provided is similar to the services that FedEx Freight provides to its other third-party customers. The following table presents related party revenue and purchases (in millions):
Three Months EndedFour Months Ended
September 30,
2026		September 30,
2025		September 30,
2026		September 30,
2025
Related party revenue$11 $39 $16 $51 
Related party purchased transportation— 2 — 3 
All significant transactions between FedEx Freight and FedEx, other than those pertaining to centralized cash management, have been included in these 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 Condensed Consolidated Balance Sheets in the captions “Receivables, less allowances” and “Due from Parent” as of September 30, 2026 and May 31, 2026, respectively. The total net effect of the settlement of these transactions is reflected in the accompanying Condensed Consolidated Statements of Cash Flows as an operating activity.
RELATED PARTY TRANSITION SERVICES. In connection with the Spin-Off, FedEx Freight entered into a Separation and Distribution Agreement and various other agreements with FedEx that govern certain aspects of FedEx Freight and FedEx’s relationship following the Spin-Off, including a Transition Services Agreement, Tax Matters Agreement, and Employee Matters Agreement. Under the Transition Services Agreement, FedEx provides us with specified services on a transitional basis. These services include certain information technology, financial, administrative, and other support services. We recognized expenses of $20 million and $30 million under the Transition Services Agreement during the three and four-month periods ended September 30, 2026, respectively. Such expenses are included in the “Operating supplies and expenses” caption in the accompanying Condensed Consolidated Statements of Income.
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 as
well as FedEx Freight’s accumulated earnings. Net transfers to and from Parent are included within “Net Transfers from (to) Parent” in the accompanying Condensed Consolidated Statements of Stockholders’ Equity and Condensed Consolidated Statements of Cash Flows. The components of the net transfers to Parent were as follows (in millions):
Four Months Ended
September 30,
2026		September 30,
2025
Cash pooling and general financing activities / other $— $(1,130)
Corporate and other allocations (13)21 
Income taxes 7 52 
Total net transfers to Parent per Condensed Consolidated Statements of Stockholders' Equity (6)(1,057)
Stock-based compensation – equity classified awards — (2)
Non-cash Spin-Off adjustments6 — 
Total net transfers to Parent per Condensed Consolidated Statements of Cash Flows $— $(1,059)
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 allocated certain shared services and general corporate costs to FedEx Freight that are reflected as expenses in these condensed consolidated financial statements. See Note 1, Description of Business and Basis of Presentation, and Note 10, Related Party Transactions, to the financial statements included in our Annual Report for additional information related to these allocations.
Allocations for shared services and general corporate costs provided to FedEx Freight are reflected in the accompanying Condensed Consolidated Statements of Income as follows (in millions):
Three Months Ended September 30, 2025Four Months Ended September 30, 2025
Operating expenses:
Salaries and employee benefits
$89 $120 
Operating supplies and expenses
72 96 
Depreciation and amortization
14 20 
Total operating expenses $175 $236 
CASH MANAGEMENT. The Company participated in FedEx’s centralized cash management program prior to the Spin-Off. 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 Condensed Consolidated Statements of Income and was $98 million and $128 million for the three- and four-month periods ended September 30, 2025. 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, to the financial statements included in our Annual Report 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. The Company sold customer receivables of $2.1 billion and $2.8 billion in the three- and four-month periods ended September 30, 2025, respectively. 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 $36 million and $48 million in the three- and four-month periods ended September 30, 2025, respectively, which are included in the “Operating supplies and expenses” line item in the accompanying Condensed Consolidated Statements of Income.
On November 30, 2025, the Company's factoring agreement with FedEx was terminated in preparation for the Spin-Off. On December 1, 2025, 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.
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 remain in place following the Spin-Off.