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FDXF, FedEx Freight Holding Company Inc.
Revenue is Priority (63%), Economy (32%) and Other (5%).
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
What this business is and what moves its needle, from its own SEC filings.
- What it is
- An airline, a high-fixed-cost business selling a perishable seat.
- What moves the needle
- Operating margin has run about 16% through the cycle, a solid margin the cost base and competition set as much as the price does. Read this kind of business on load factor against unit cost, and fuel.
- Is it a good business?
- Return on capital has run high across the record (median 43%, above 15% in 2 of 3 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 11% of revenue reaches owners as cash, consistently. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →Priority is 63% of revenue, with Economy the other meaningful line at 32%.
- Priority63%$5.6B
- Economy32%$2.8B
- Other5%$408M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2024–2026
realized figures from each filing · older years to the left| 2024’24 | 2025’25 | 2026’26 | TTMTTMMay 2026 | |
|---|---|---|---|---|
| Income statement | ||||
| $9.4B | $8.9B | $8.8B | $8.8B | RevenueRevenue |
| $1.8B | $1.4B | $540M | $540M | Operating incomeOp. inc. |
| 18.6% | 15.8% | 6.1% | 6.1% | Operating marginOp. mgn |
| $2.1B | $1.8B | $884M | — | Pretax incomePretax |
| $1.6B | $1.3B | $655M | $655M | Net incomeNet inc. |
| 24% | 25% | 26% | 26% | Effective tax rateTax rate |
| Cash flow & returns | ||||
| $1.5B | $1.5B | $167M | $167M | Operating cash flowOp. cash |
| $455M | $471M | $512M | $512M | Depreciation & amortizationD&A |
| ($500M) | ($296M) | ($1.0B) | ($1.0B) | Working capital & otherWC & other |
| $461M | $437M | $379M | $379M | CapexCapex |
| 4.9% | 4.9% | 4.3% | 4.3% | Capex / revenueCapex/rev |
| $1.1B | $1.1B | ($212M) | ($212M) | Owner earningsOwner earn. |
| 11.5% | 12.3% | −2.4% | −2.4% | Owner earnings marginOE mgn |
| $1.1B | $1.1B | ($212M) | ($212M) | Free cash flowFCF |
| 11.5% | 12.3% | −2.4% | −2.4% | Free cash flow marginFCF mgn |
| $0 | $0 | $48M | $48M | Dividends paidDiv. paid |
| ($403M) | ($385M) | ($363M) | — | Investing cash flowInv. cash |
| ($1.1B) | ($1.1B) | $335M | — | Financing cash flowFin. cash |
| $1M | ($3M) | $3M | — | Exchange-rate effectFX |
| $13M | $3M | $142M | — | Change in cashΔ cash |
| 62% | 43% | 10% | 10% | ROICROIC |
| 74% | 56% | — | — | Return on equityROE |
| 74% | 56% | — | — | Retained to equityRetained/eq |
| Balance sheet | ||||
| — | $132M | $1.2B | $1.2B | ReceivablesReceiv. |
| — | $150M | $106M | $106M | Accounts payablePayables |
| — | ($18M) | $1.0B | $1.0B | Operating working capitalOper. WC |
| — | $284M | $1.5B | $1.5B | Current assetsCur. assets |
| — | $773M | $993M | $993M | Current liabilitiesCur. liab. |
| — | 0.4× | 1.5× | 1.5× | Current ratioCurr. ratio |
| — | $2.8B | $2.9B | — | Net PP&ENet PP&E |
| $602M | $602M | $602M | $602M | GoodwillGoodwill |
| — | $5.0B | $6.9B | $6.9B | Total assetsAssets |
| — | $73M | $4.5B | $4.5B | Total debtDebt |
| — | $73M | $4.5B | $4.5B | Net debt / (cash)Net debt |
| — | — | 9.5× | 9.5× | Interest coverageInt. cov. |
| $2.1B | $2.4B | ($497M) | ($497M) | Shareholders’ equityEquity |
| 0.1% | 0.1% | 0.1% | 0.1% | Stock comp / revenueSBC/rev |
| Per share | ||||
| 150M | 150M | 150M | 150M | Shares out (diluted)Shares |
| $63.03 | $59.48 | $58.83 | $58.83 | Revenue / shareRev/sh |
| $10.53 | $9.00 | $4.38 | $4.38 | EPS (diluted)EPS |
| $7.22 | $7.32 | $-1.42 | $-1.42 | Owner earnings / shareOE/sh |
| $7.22 | $7.32 | $-1.42 | $-1.42 | Free cash flow / shareFCF/sh |
| $0.00 | $0.00 | $0.32 | $0.32 | Dividends / shareDiv/sh |
| $3.08 | $2.92 | $2.54 | $2.54 | Cap. spending / shareCapex/sh |
| $14.21 | $16.01 | $-3.32 | $-3.32 | Book value / shareBVPS |
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2026 the business reported $655M of profit but ($212M) of owner earnings: $867M less than the profit line, taken out by capital spending and the timing of cash.
| FY2026 | FY2025 | FY2024 | |
|---|---|---|---|
| Reported net income | $655M | $1.3B | $1.6B |
| Depreciation & amortizationnon-cash charge added back | +$512M | +$471M | +$455M |
| Stock-based compensationreal costnon-cash, but a real cost | +$13M | +$10M | +$12M |
| Working capital & othertiming of cash in and out, other non-cash items | −$1.0B | −$296M | −$500M |
| Cash from operations | $167M | $1.5B | $1.5B |
| Capital expenditurecash put back in to keep running and to grow | −$379M | −$437M | −$461M |
| Owner earnings | ($212M) | $1.1B | $1.1B |
| Owner-earnings marginowner earnings ÷ revenue | -2% | 12% | 11% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $13M), owner earnings is nearer ($225M).
Much of fiscal 2026's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- ComfortableOperating income $540M ÷ interest expense $57M
What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- How heavy is the debt, net of cash? $4.5B · 8.4× operating profitHeavy net debtCash $0 − debt $4.5B
What this means
Netting $0 of cash and short-term investments against $4.5B of debt leaves $4.5B owed, about 8.4× a year's operating profit. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Very high (≥25%) through the cycle3-yr median, range 10%–62%; 10% latest = NOPAT $400M ÷ invested capital $4.0BIndustry peers: median 13%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 3 years (it ran 10% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Solid through the cycle3-yr median margin, range -2%–12%; latest ($212M) = operating cash $167M − maintenance capex $379MIndustry peers: median 7%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -2% of revenue this year, a 11% median across 3 years. Treating stock comp as the real expense it is (less $13M of SBC) leaves ($225M).
- Thinly cash-backedCash from ops $167M ÷ net income $655M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- No surplus to allocate
What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
- Investing or harvesting? 0.74×HarvestingCapex $379M ÷ depreciation & amortization as filed $512M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
The promise and the pay packet
- Is the buyback buying ownership, or mopping up? 0.1%The count is flatStock compensation $13M (fiscal 2026), 0.1% of revenue · no repurchases · diluted shares +0.0% since 2024
What this means
Stock handed to employees is a real cost paid in the owner's own currency: it is charged against profit, but the shares it creates are permanent. Many companies repurchase stock at the same time, which looks like a return of capital and often is not — if the count barely moves, the cash merely cancelled the pay packet and bought the owner nothing. The three states worth telling apart are a count genuinely shrinking, a count standing still despite large repurchases, and a count rising because the issuance was never offset at all.
Graham’s defensive tests · 1 of 3 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size PassRevenue ≥ $2B · $8.8B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity NearCurrent ratio ≥ 2× · 1.52×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $4.5B vs $513M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $7.97/share (latest year $4.38), the averaged base the calculator's gate runs on, and book value is $-3.32/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, May 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Receivables$1.2B
- Other current assets$352M
- Accounts payable$106M
- Other current liabilities$887M
From the company's latest filing.
Lease obligations
the lease note, SEC EDGAR →Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.
Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.
True leverage: debt plus leases
Counting the leases the way Buffett does, the fixed claims on this business come to $6.6B, of which the leases are 32%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.
Lease ladder read from the ASC 842 tags in the company’s May 31, 2026 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.
Management, ownership & pay
From the proxy: how much of the business the people running it own, and how they are paid.
- Stock-based compensation$13M
The slice of the business handed to employees in shares in fiscal 2026, 0.1% of revenue, equal to 2.4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Peers, Trucking & Logistics
The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record |
|---|---|---|---|---|---|
| JBHTJ.B. Hunt | $12.0B | — | 8.0% | 16% | 7% |
| 9064Yamato Holdings | $11.8B | — | 2.6% | 7% | 2% |
| EXPDExpeditors International of Washington, Inc. | $11.1B | — | 10.0% | 66% | 7% |
| FDXFFedEx Freight Holding Company Inc. | $8.8B | — | 15.8% | 43% | 11% |
| XPOXPO Inc. | $8.2B | 47%4y | 4.6% | 7% | 4% |
| TFIITFI International Inc. | $7.9B | — | 10.1% | 13% | 8% |
| KNXKnight-swift Transportation Holdings Inc. | $7.5B | — | 9.7% | 6% | 8% |
| ZTOZTO Express (Cayman) Inc. | $7.3B | 30% | 24.7% | 14% | 21% |
| Group median | — | — | 9.9% | 13% | 8% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what FedEx Freight Holding Company Inc. has delivered.
FedEx Freight Holding Company Inc.’s latest year shows negative owner earnings, below the record’s own through-cycle owner earnings. So the tool opens on the through-cycle base, the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.
—
9.0% = the 4.65% 10-year Treasury (Aug 19, 2026) + 4.35 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Prefilled with the 10-year Treasury (4.65%, as of Aug 19, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner earnings ($212M) on 150M shares outstanding, per the 10-K cover, as of 2026-08-03; net debt $4.5B. The base opens on the through-cycle figure (the latest year sits off the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Manual order: ← FDX its page in the Manual FE →
Industry order: ← FDX the Trucking & Logistics chapter FLX →