SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	4 Months Ended
Sep. 30, 2026
Accounting Policies [Abstract]
BACKGROUND AND DESCRIPTION OF BUSINESS	BACKGROUND. FedEx Freight Holding Company, Inc. (“FedEx Freight,” the “Company,” “we,” or “our”) was incorporated in Delaware on July 14, 2025, for the purpose of receiving, pursuant to a reorganization, all of the outstanding equity interests of FedEx Freight, Inc., an indirect wholly owned subsidiary of FedEx Corporation (the “Parent” or “FedEx”). On June 1, 2026 (the “Distribution Date”), FedEx completed the spin-off of FedEx Freight (the “Spin-Off” or the “Separation”), which was tax-free for U.S. federal income tax purposes. The Separation was completed through the distribution of approximately 80.1% of the Company’s outstanding common stock to holders of record of FedEx common stock as of the close of business on May 15, 2026 (the “Distribution”), which resulted in the issuance of approximately 150 million shares of common stock inclusive of FedEx’s retained stake. Prior to the Distribution, the Company issued 100 shares of common stock in exchange for a subscription receivable of $10, all of which were held by FedEx. On May 27, 2026, the Company effected a recapitalization whereby those shares were reclassified and converted into 149,505,248 shares of common stock. In connection with the Spin-Off, the Company became an independent, publicly traded company. Our common stock is listed under the symbol “FDXF” on the New York Stock Exchange. Unless the context otherwise requires, references to “FedEx Freight,” the “Company,” “we,” or “our” refer to (i) FedEx Freight Holding Company, Inc. and its direct and indirect subsidiaries after giving effect to the reorganization completed on May 29, 2026 in preparation for the Spin-Off and (ii) FedEx Freight, Inc. when referencing the time period prior to the reorganization. DESCRIPTION OF BUSINESS. FedEx Freight is a leading North American provider of less-than-truckload (“LTL”) freight transportation services. We offer a range of services designed to meet the diverse needs of LTL shippers including time-critical transportation needs leveraging our advanced tracking capabilities and a comprehensive network of service centers and hubs that facilitate efficient delivery and pickup. FedEx Freight service offerings include priority services when speed is critical and economy services when time can be traded for savings. FedEx Freight is our sole reportable segment based upon the information used by our chief operating decision maker (“CODM”) in evaluating the performance of our business and allocating resources and capital.
FISCAL YEARS	FISCAL YEARS. Effective June 1, 2026, the Company’s fiscal year-end changed from May 31 to December 31. The accompanying unaudited condensed consolidated financial statements present our financial position as of September 30, 2026 and May 31, 2026; our results of operations and changes in stockholders’ equity for the three- and four-month periods ended September 30, 2026 and 2025; and cash flows for the four-month periods ended September 30, 2026 and 2025.
BASIS OF PRESENTATION	BASIS OF PRESENTATION. These unaudited condensed consolidated financial statements of FedEx Freight have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and Securities and Exchange Commission (“SEC”) instructions for interim financial information and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 (“Annual Report”). Accordingly, certain disclosures required by GAAP and normally included in annual financial statements have been omitted.
CONSOLIDATION	The historical results of operations, financial position, and cash flows of FedEx Freight prior to the Spin-Off presented in these financial statements may not be indicative of what they would have been had FedEx Freight been an independent stand-alone entity. In the opinion of management, these financial statements reflect all adjustments, including normal recurring adjustments, that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown. The results for the current interim periods are not necessarily indicative of results for the full year. The financial statements include all revenue and costs directly attributable to FedEx Freight and, prior to the Spin-Off, an allocation of expenses related to certain FedEx corporate and shared functions. These expenses have been allocated to FedEx Freight based on direct usage or benefit where specifically identifiable, with the remainder allocated pro rata based on an applicable measure 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 or the benefit received. Where allocations of amounts were necessary, the allocations of these amounts were determined on a reasonable basis and the methods were applied consistently for the applicable periods presented prior to the Spin-Off and reflect all of the costs of FedEx Freight. These allocated amounts are not necessarily indicative of the actual amounts that might have been incurred or realized had FedEx Freight operated as an independent, stand-alone entity during the periods presented, nor are they indicative of FedEx Freight’s future operations. Consequently, the financial statements do not necessarily represent the results the Company would have achieved if the Company had operated as a separate, stand-alone entity during the periods presented. It is not practicable to estimate actual costs that would have been incurred had the Company been a separate, stand-alone company during the periods presented. Refer to Note 1 2 , Related Party Transactions, for additional information regarding these allocations. The financial statements include all of the assets and liabilities specifically attributable to FedEx Freight and its subsidiaries, all of which are wholly owned. All intercompany transactions and balances within FedEx Freight have been eliminated in these financial statements. As described in Note 1 2 , Related Party Transactions, certain transactions between FedEx Freight and FedEx prior to the Spin-Off have been included in these financial statements. Prior to the Spin-Off, FedEx used a centralized approach to cash management and financing of its domestic operations. The related balances were increased through daily cash deposits by the Company to FedEx and decreased by cash distributions and disbursements made by FedEx on behalf of FedEx Freight for operating expenses. This arrangement was not reflective of the manner in which we would have financed our domestic operations had we been a stand-alone business separate from FedEx during the periods presented prior to the Spin-Off. As a result of this arrangement, we were dependent on transfers of cash from FedEx to fund our operations in certain situations. The amounts associated with this arrangement are reported in the caption “Accumulated deficit” as a component of (deficit) equity in the accompanying Condensed Consolidated Balance Sheets and as a financing activity on the accompanying Condensed Consolidated Statements of Cash Flows. Refer to Note 1 2 , Related Party Transactions, for further discussion. On May 29, 2026, the Company’s cash pooling arrangement with FedEx was terminated in preparation for the Spin-Off. FedEx’s third-party debt and related interest expense were not attributed to FedEx Freight for the periods presented prior to the Spin-Off because FedEx’s borrowings were neither directly attributable to FedEx Freight nor was FedEx Freight the legal obligor of such borrowings. Refer to Note 13, Commitments and Contingencies, for further discussion of our guarantees of FedEx’s third-party debt during the periods presented. In connection with the Spin-Off, we entered into a series of financing arrangements for which both FedEx and FedEx Freight, Inc. were jointly and severally liable until completion of the Spin-Off. Upon completion of the Spin-Off, FedEx was automatically released from its guarantee of these financing arrangements, and FedEx Custom Critical joined FedEx Freight, Inc. as a guarantor. The borrowings under such financing arrangements are reflected in the “Long-term debt, less current portion” caption on the accompanying Condensed Consolidated Balance Sheets, with a corresponding amount reflected as a Net transfer to Parent. Refer to Note 7, Long-Term Debt, for further discussion on the composition of debt during the periods presented.
RECLASSIFICATION	Certain prior-year balances have been reclassified to conform to the current-year presentation. Costs previously reported within “Fuel,” “Rentals,” and “Maintenance and repairs,” and certain costs previously reported within “Other,” were aggregated and presented within “Operating supplies and expenses.” In addition, the remaining amounts previously included within “Other” were presented separately as “Insurance and claims” and “Operating taxes and licenses,” respectively. These changes had no impact on previously reported total revenue, total operating expenses, operating income, net income, or earnings per share.
CONTRACT ASSETS	CONTRACT ASSETS. Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only once all performance obligations have been completed (e.g., delivery has occurred). Contract assets are generally classified as current, and the full balance is converted each quarter based on the short-term nature of the transactions. The Company’s contract assets were historically included in the balances sold to FedEx pursuant to the Company’s historical factoring arrangement. On November 30, 2025, the Company’s factoring agreement with FedEx was terminated in preparation for the Spin-Off. Additionally, 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. Refer to Note 1 2 , Related Party Transactions, for additional information related to the Company’s participation in the historical factoring agreement with FedEx.
CREDIT RISK	CREDIT RISK. We routinely grant credit to many of our customers without collateral. We believe the risk of credit loss in our non-factored trade receivables is substantially mitigated by our credit evaluation process, short collection terms, and our broad and diverse customer base. We have elected the practical expedient under Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments - Credit Losses to assume that current conditions as of the balance sheet date do not change for the remaining life of our accounts receivable. Accordingly, allowances for potential credit losses are updated monthly and determined using historical experience and the impact of current economic conditions. Historically, credit losses have been within management’s expectations.
EMPLOYEE AND DEFINED BENEFIT/ CONTRIBUTION PLANS	EMPLOYEE BENEFIT PLANS. We sponsor defined benefit pension and defined contribution plans covering eligible employees. Defined Benefit Plans In connection with the Spin-Off, effective June 1, 2026 and as a result of the legal split of certain of FedEx’s benefit plans, all eligible FedEx Freight employees transitioned to a newly established, dedicated defined benefit plan. Prior to the Spin-Off, certain of our employees participated in defined benefit pension and post-retirement healthcare plans sponsored by FedEx, which were accounted for under the multi-employer approach. Accordingly, we did not record an asset or liability to recognize the funded status of the plans in the accompanying Condensed Consolidated Balance Sheets as of May 31, 2026. The accompanying Condensed Consolidated Statements of Income reflect a proportionate allocation of net periodic benefit costs associated with FedEx Freight employees’ participation in the multi-employer plans for the three- and four-month periods ended September 30, 2025. We recognize the funded status of each defined benefit plan in the accompanying Condensed Consolidated Balance Sheets. The funded status represents the difference between the fair value of plan assets and the projected benefit obligation. We use “mark-to-market” accounting and immediately recognize changes in the fair value of plan assets and actuarial gains or losses in our results annually in the fourth quarter of each year. The service cost component of net periodic benefit cost is included in “Salaries and employee benefits” and all other components are included in “Other, net” in the accompanying Condensed Consolidated Statements of Income. Defined Contribution Plans In connection with the Spin-Off, effective June 1, 2026 and as a result of the legal split of certain of FedEx’s contribution plans, all eligible FedEx Freight employees transitioned to newly established, dedicated defined contribution plans. Prior to the Spin-Off, certain of our employees in Canada participated in a defined contribution plan sponsored by FedEx Freight, while certain of our employees in the United States participated in defined contribution plans sponsored by FedEx. Contributions in the United States are subject to maximum compensation and contribution limits for a tax-qualified defined contribution plan as prescribed by the Internal Revenue Service. Contributions to defined contribution plans are expensed as incurred.
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATION. Certain of our employees and members of our Board of Directors participated in the stock-based compensation program sponsored by FedEx Freight for the three- and four-month periods ended September 30, 2026 and had participated in the stock-based compensation plans sponsored by FedEx prior to the Spin-Off for the three- and four-month periods ended September 30, 2025. The accounting guidance related to share-based payments requires recognition of compensation expense for stock-based awards using a fair value method. FedEx Freight uses the Black-Scholes option pricing model to calculate the fair value of stock options. The value of awards of restricted stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) is based on the stock price underlying the award on the grant date. In June 2026, we granted 120,421 RSUs and 118,286 PSUs to eligible employees and members of our Board of Directors both with weighted-average grant-date fair values of $149.69. Expenses associated with our stock-based compensation plans are reflected within “Salaries and employee benefits” in the accompanying Condensed Consolidated Statements of Income and were $9 million and $3 million for the three-month periods ended September 30, 2026 and 2025, respectively, and $16 million and $5 million for the four-month periods ended September 30, 2026 and 2025, respectively. Expenses prior to the Spin-Off also included an allocation of shared employee costs.
RECENT ACCOUNTING GUIDANCE	RECENT ACCOUNTING GUIDANCE New accounting rules and disclosure requirements can significantly affect our reported results and the comparability of our financial statements. We believe the following new accounting guidance is relevant to the readers of our financial statements. RECENTLY ADOPTED ACCOUNTING STANDARDS. In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the application of the current expected credit loss model for current accounts receivable and current contract assets under ASC 606 by providing a practical expedient that permits entities to assume that economic conditions existing as of the balance sheet date will remain unchanged when estimating expected credit losses on current trade receivables and contract assets. We adopted the standard and elected the practical expedient effective June 1, 2026 on a prospective basis. The practical expedient did not have a material impact on our financial statements. NEW ACCOUNTING STANDARDS AND ACCOUNTING STANDARDS NOT YET ADOPTED. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. GAAP. Per the FASB, the amendment does not intend to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provide clarity and improve navigability of the existing interim reporting requirements. The update will be effective for interim reporting periods beginning after December 15, 2027. We are assessing the effect of this update on our consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to Accounting for Internal-Use Software, which updates the accounting for internal-use software by eliminating the concept of development stages. Under the updated guidance, software costs are capitalized once management has authorized and committed to funding the project, and it is probable the project will be completed and the software will be used to perform the function intended. The update will be effective for annual reporting periods beginning after December 15, 2027, and subsequent interim reporting periods. We evaluated the amendments and do not expect adoption of the update to have a material impact on our consolidated financial statements or related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about specific expense categories. The update will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

4 Months Ended

Sep. 30, 2026

BACKGROUND. FedEx Freight Holding Company, Inc. (“FedEx Freight,” the “Company,” “we,” or “our”) was incorporated in Delaware on July 14, 2025, for the purpose of receiving, pursuant to a reorganization, all of the outstanding equity interests of FedEx Freight, Inc., an indirect wholly owned subsidiary of FedEx Corporation (the “Parent” or “FedEx”). On June 1, 2026 (the “Distribution Date”), FedEx completed the spin-off of FedEx Freight (the “Spin-Off” or the “Separation”), which was tax-free for U.S. federal income tax purposes. The Separation was completed through the distribution of approximately 80.1% of the Company’s outstanding common stock to holders of record of FedEx common stock as of the close of business on May 15, 2026 (the “Distribution”), which resulted in the issuance of approximately 150 million shares of common stock inclusive of FedEx’s retained stake. Prior to the Distribution, the Company issued 100 shares of common stock in exchange for a subscription receivable of $10, all of which were held by FedEx. On May 27, 2026, the Company effected a recapitalization whereby those shares were reclassified and converted into 149,505,248 shares of common stock. In connection with the Spin-Off, the Company became an independent, publicly traded company. Our common stock is listed under the symbol “FDXF” on the New York Stock Exchange.

Unless the context otherwise requires, references to “FedEx Freight,” the “Company,” “we,” or “our” refer to (i) FedEx Freight Holding Company, Inc. and its direct and indirect subsidiaries after giving effect to the reorganization completed on May 29, 2026 in preparation for the Spin-Off and (ii) FedEx Freight, Inc. when referencing the time period prior to the reorganization.

DESCRIPTION OF BUSINESS. FedEx Freight is a leading North American provider of less-than-truckload (“LTL”) freight transportation services. We offer a range of services designed to meet the diverse needs of LTL shippers including time-critical transportation needs leveraging our advanced tracking capabilities and a comprehensive network of service centers and hubs that facilitate efficient delivery and pickup. FedEx Freight service offerings include priority services when speed is critical and economy services when time can be traded for savings. FedEx Freight is our sole reportable segment based upon the information used by our chief operating decision maker (“CODM”) in evaluating the performance of our business and allocating resources and capital.

FISCAL YEARS

FISCAL YEARS. Effective June 1, 2026, the Company’s fiscal year-end changed from May 31 to December 31. The accompanying unaudited condensed consolidated financial statements present our financial position as of September 30, 2026 and May 31, 2026; our results of operations and changes in stockholders’ equity for the three- and four-month periods ended September 30, 2026 and 2025; and cash flows for the four-month periods ended September 30, 2026 and 2025.

BASIS OF PRESENTATION

BASIS OF PRESENTATION. These unaudited condensed consolidated financial statements of FedEx Freight have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and Securities and Exchange Commission (“SEC”) instructions for interim financial information and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 31, 2026 (“Annual Report”). Accordingly, certain disclosures required by GAAP and normally included in annual financial statements have been omitted.

CONSOLIDATION

The historical results of operations, financial position, and cash flows of FedEx Freight prior to the Spin-Off presented in these financial statements may not be indicative of what they would have been had FedEx Freight been an independent stand-alone entity. In the opinion of management, these financial statements reflect all adjustments, including normal recurring adjustments, that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown. The results for the current interim periods are not necessarily indicative of results for the full year.

The financial statements include all revenue and costs directly attributable to FedEx Freight and, prior to the Spin-Off, an allocation of expenses related to certain FedEx corporate and shared functions. These expenses have been allocated to FedEx Freight based on direct usage or benefit where specifically identifiable, with the remainder allocated pro rata based on an applicable measure 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 or the benefit received. Where allocations of amounts were necessary, the allocations of these amounts were determined on a reasonable basis and the methods were applied consistently for the applicable periods presented prior to the Spin-Off and reflect all of the costs of FedEx Freight. These allocated amounts are not necessarily indicative of the actual amounts that might have been incurred or realized had FedEx Freight operated as an independent, stand-alone entity during the periods presented, nor are they indicative of FedEx Freight’s future operations. Consequently, the financial

statements do not necessarily represent the results the Company would have achieved if the Company had operated as a separate, stand-alone entity during the periods presented. It is not practicable to estimate actual costs that would have been incurred had the Company been a separate, stand-alone company during the periods presented. Refer to Note 1 2 , Related Party Transactions, for additional information regarding these allocations.

The financial statements include all of the assets and liabilities specifically attributable to FedEx Freight and its subsidiaries, all of which are wholly owned. All intercompany transactions and balances within FedEx Freight have been eliminated in these financial statements. As described in Note 1 2 , Related Party Transactions, certain transactions between FedEx Freight and FedEx prior to the Spin-Off have been included in these financial statements.

Prior to the Spin-Off, FedEx used a centralized approach to cash management and financing of its domestic operations. The related balances were increased through daily cash deposits by the Company to FedEx and decreased by cash distributions and disbursements made by FedEx on behalf of FedEx Freight for operating expenses. This arrangement was not reflective of the manner in which we would have financed our domestic operations had we been a stand-alone business separate from FedEx during the periods presented prior to the Spin-Off. As a result of this arrangement, we were dependent on transfers of cash from FedEx to fund our operations in certain situations. The amounts associated with this arrangement are reported in the caption “Accumulated deficit” as a component of (deficit) equity in the accompanying Condensed Consolidated Balance Sheets and as a financing activity on the accompanying Condensed Consolidated Statements of Cash Flows. Refer to Note 1 2 , Related Party Transactions, for further discussion. On May 29, 2026, the Company’s cash pooling arrangement with FedEx was terminated in preparation for the Spin-Off.

FedEx’s third-party debt and related interest expense were not attributed to FedEx Freight for the periods presented prior to the Spin-Off because FedEx’s borrowings were neither directly attributable to FedEx Freight nor was FedEx Freight the legal obligor of such borrowings. Refer to Note 13, Commitments and Contingencies, for further discussion of our guarantees of FedEx’s third-party debt during the periods presented. In connection with the Spin-Off, we entered into a series of financing arrangements for which both FedEx and FedEx Freight, Inc. were jointly and severally liable until completion of the Spin-Off. Upon completion of the Spin-Off, FedEx was automatically released from its guarantee of these financing arrangements, and FedEx Custom Critical joined FedEx Freight, Inc. as a guarantor. The borrowings under such financing arrangements are reflected in the “Long-term debt, less current portion” caption on the accompanying Condensed Consolidated Balance Sheets, with a corresponding amount reflected as a Net transfer to Parent. Refer to Note 7, Long-Term Debt, for further discussion on the composition of debt during the periods presented.

RECLASSIFICATION

Certain prior-year balances have been reclassified to conform to the current-year presentation. Costs previously reported within “Fuel,” “Rentals,” and “Maintenance and repairs,” and certain costs previously reported within “Other,” were aggregated and presented within “Operating supplies and expenses.” In addition, the remaining amounts previously included within “Other” were presented separately as “Insurance and claims” and “Operating taxes and licenses,” respectively. These changes had no impact on previously reported total revenue, total operating expenses, operating income, net income, or earnings per share.

CONTRACT ASSETS

CONTRACT ASSETS. Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only once all performance obligations have been completed (e.g., delivery has occurred). Contract assets are generally classified as current, and the full balance is converted each quarter based on the short-term nature of the transactions.

The Company’s contract assets were historically included in the balances sold to FedEx pursuant to the Company’s historical factoring arrangement. On November 30, 2025, the Company’s factoring agreement with FedEx was terminated in preparation for the Spin-Off. Additionally, 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. Refer to Note 1 2 , Related Party Transactions, for additional information related to the Company’s participation in the historical factoring agreement with FedEx.

CREDIT RISK

CREDIT RISK. We routinely grant credit to many of our customers without collateral. We believe the risk of credit loss in our non-factored trade receivables is substantially mitigated by our credit evaluation process, short collection terms, and our broad and diverse customer base. We have elected the practical expedient under Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments - Credit Losses to assume that current conditions as of the balance sheet date do not change for the remaining life of our accounts receivable. Accordingly, allowances for potential credit losses are updated monthly and determined using historical experience and the impact of current economic conditions. Historically, credit losses have been within management’s expectations.

EMPLOYEE AND DEFINED BENEFIT/ CONTRIBUTION PLANS

EMPLOYEE BENEFIT PLANS. We sponsor defined benefit pension and defined contribution plans covering eligible employees.

Defined Benefit Plans

In connection with the Spin-Off, effective June 1, 2026 and as a result of the legal split of certain of FedEx’s benefit plans, all eligible FedEx Freight employees transitioned to a newly established, dedicated defined benefit plan. Prior to the Spin-Off, certain of our employees participated in defined benefit pension and post-retirement healthcare plans sponsored by FedEx, which were accounted for under the multi-employer approach. Accordingly, we did not record an asset or liability to recognize the funded status of the plans in the accompanying Condensed Consolidated Balance Sheets as of May 31, 2026. The accompanying Condensed Consolidated Statements of Income reflect a proportionate allocation of net periodic benefit costs associated with FedEx Freight employees’ participation in the multi-employer plans for the three- and four-month periods ended September 30, 2025. We recognize the funded status of each defined benefit plan in the accompanying Condensed Consolidated Balance Sheets. The funded status represents the difference between the fair value of plan assets and the projected benefit obligation. We use “mark-to-market” accounting and immediately recognize changes in the fair value of plan assets and actuarial gains or losses in our results annually in the fourth quarter of each year.

The service cost component of net periodic benefit cost is included in “Salaries and employee benefits” and all other components are included in “Other, net” in the accompanying Condensed Consolidated Statements of Income.

Defined Contribution Plans

In connection with the Spin-Off, effective June 1, 2026 and as a result of the legal split of certain of FedEx’s contribution plans, all eligible FedEx Freight employees transitioned to newly established, dedicated defined contribution plans. Prior to the Spin-Off, certain of our employees in Canada participated in a defined contribution plan sponsored by FedEx Freight, while certain of our employees in the United States participated in defined contribution plans sponsored by FedEx. Contributions in the United States are subject to maximum compensation and contribution limits for a tax-qualified defined contribution plan as prescribed by the Internal Revenue Service. Contributions to defined contribution plans are expensed as incurred.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION. Certain of our employees and members of our Board of Directors participated in the stock-based compensation program sponsored by FedEx Freight for the three- and four-month periods ended September 30, 2026 and had participated in the stock-based compensation plans sponsored by FedEx prior to the Spin-Off for the three- and four-month periods ended September 30, 2025. The accounting guidance related to share-based payments requires recognition of compensation expense for stock-based awards using a fair value method. FedEx Freight uses the Black-Scholes option pricing model to calculate the fair value of stock options. The value of awards of restricted stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) is based on the stock price underlying the award on the grant date.

In June 2026, we granted 120,421 RSUs and 118,286 PSUs to eligible employees and members of our Board of Directors both with weighted-average grant-date fair values of $149.69. Expenses associated with our stock-based compensation plans are reflected within “Salaries and employee benefits” in the accompanying Condensed Consolidated Statements of Income and were $9 million and $3 million for the three-month periods ended September 30, 2026 and 2025, respectively, and $16 million and $5 million for the four-month periods ended September 30, 2026 and 2025, respectively. Expenses prior to the Spin-Off also included an allocation of shared employee costs.

RECENT ACCOUNTING GUIDANCE

New accounting rules and disclosure requirements can significantly affect our reported results and the comparability of our financial statements. We believe the following new accounting guidance is relevant to the readers of our financial statements.

RECENTLY ADOPTED ACCOUNTING STANDARDS. In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the application of the current expected credit loss model for current accounts receivable and current contract assets under ASC 606 by providing a practical expedient that permits entities to assume that economic conditions existing as of the balance sheet date will remain unchanged when estimating expected credit losses on current trade receivables and contract assets. We adopted the standard and elected the practical expedient effective June 1, 2026 on a prospective basis. The practical expedient did not have a material impact on our financial statements.

NEW ACCOUNTING STANDARDS AND ACCOUNTING STANDARDS NOT YET ADOPTED. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the applicability of the interim reporting guidance, the types of interim reporting, and the form and content of interim financial statements in accordance with U.S. GAAP. Per the FASB, the amendment does not intend to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements but rather provide clarity and improve navigability of the existing interim reporting requirements. The update will be effective for interim reporting periods beginning after December 15, 2027. We are assessing the effect of this update on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to Accounting for Internal-Use Software, which updates the accounting for internal-use software by eliminating the concept of development stages. Under the updated guidance, software costs are capitalized once management has authorized and

committed to funding the project, and it is probable the project will be completed and the software will be used to perform the function intended. The update will be effective for annual reporting periods beginning after December 15, 2027, and subsequent interim reporting periods. We evaluated the amendments and do not expect adoption of the update to have a material impact on our consolidated financial statements or related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which expands disclosures about specific expense categories. The update will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. We are assessing the effect of this update on our consolidated financial statements and related disclosures.