FedEx Freight Holding Company, Inc.

Good day and welcome to the FedEx Freight fourth quarter fiscal 2026 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note, this event is being recorded. I would now like to turn the conference over to Mariana Rose, Head of Investor Relations. Please go ahead.

Good afternoon, and welcome to FedEx Freight's fourth quarter earnings conference call. The fourth quarter earnings release and investor presentation are on our website at ir.fedexfreight.com, and this call is also being streamed from our website. Joining us today are John Smith, President and Chief Executive Officer at FedEx Freight, and Marshall Witt, our Executive Vice President and Chief Financial Officer. Following prepared remarks, John and Marshall will both be available to answer questions. To allow time for as many participants as possible, we ask that you limit yourself to one question. Afterward, you are welcome to re-enter the queue if you have additional questions. During the call, certain statements may be considered forward-looking, as defined in the Private Securities Litigation Reform Act of 1995, and are subject to factors that could cause actual results to differ materially from those expressed or implied. For additional information, as well as reconciliations of the non-GAAP measures discussed today, to the most directly comparable GAAP measures Please visit our website and refer to our press releases and SEC filings. With that, I'd like to turn the call over to John for opening remarks.

Well, thanks, Mary, and good afternoon, everyone, and welcome to FedEx Freight's first-ever earnings conference call as a standalone company. This is an important and highly anticipated milestone for our entire organization. In April, we introduced the new FedEx Freight. And on June 1st, we proudly rang the opening bell at the New York Stock Exchange, officially marking our debut as a standalone publicly traded company under the ticker FDXF. I want to share my sincerest appreciation to our incredible team members who have worked so hard to bring us to this moment. It's their steadfast dedication, and commitment that make FedEx Freight the company it is today. I also want to thank the broader FedEx team who supported us throughout our journey to become independent. Our FedEx roots created a firm foundation, one built on operational excellence, a customer-focused mindset, and an unwavering focus on reliability, quality, and efficiency. As I look ahead, I have great confidence in our ability to build on this strong foundation through our go-forward strategy and a team with a proven track record of execution. Our future success is anchored in a clear, disciplined approach centered on key stakeholders, our people, our customers, and our shareholders. As we enter this next chapter, we are shaping a new legacy, sharpening our focus on LTL and positioning FedEx Freight for a more agile, resilient, and profitable future. As you've heard me say before, we are just getting started. Let's begin with a few highlights from the quarter. As I mentioned, we successfully launched as a standalone LTL carrier, marking a defining moment for FedEx Freight and positioning us to set a new standard in the LTL industry. And let me be clear, the successful launch did not happen by chance. It was the direct result of months of rigorous planning, deep collaboration, and detailed coordination across our organization. Our team's discipline and unwavering focus enabled a seamless transition and ensured we were ready to continue to deliver for our customers from day one. As we completed this successful launch, I am proud that safety remained our top priority without any type of compromise. Our employees continue to live our safety above all culture, delivering record-low DOT preventable accident performance in fiscal year 2026. This result is a direct reflection of the collective responsibility, professionalism, and dedication of our team across North America. Now, from a financial standpoint, we delivered a strong finish to the year, generating $2.4 billion in revenue, $363 million in adjusted operating income, and a 15% adjusted operating margin in the fourth quarter. Driving further into our operational performance, as expected, volume was softer year over year. However, trends have improved sequentially. We're encouraged by these early signs that demand may be stabilizing for our services, supported by improving manufacturing indicators, truckload trends, and higher year-over-year contractual increases. At FedEx Freight, Revenue per shipment increased 11.5% year over year in the fourth quarter, driven primarily by higher fuel prices and increased weight per shipment. This reflects improved backhaul efficiency enabled by tighter truckload capacity. Importantly, we are encouraged by the strong execution of our world-class team, operating with a renewed focus on high quality, efficient, and profitable service. Without incremental costs, our team delivered meaningful improvements in pickup reliability, on-time delivery performance, as well as trailer utilization. We also achieved a record claims ratio for the quarter and remain on track to deliver our best ever claims ratio for calendar year 2026. We look forward to sharing more details about our key operating metrics in October when we report our first full quarter of standalone operating and financial results. Alongside our operations team, our dedicated sales force is ramping quickly and integrating seamlessly across the organization. Our sales force is now fully staffed and the team is already making a meaningful and positive impact, working closely with both new and existing customers, as well as our frontline employees. For the first time in years, our sales teams are back in our service centers, working side by side with operations to support customers where they are located. This level of integration is driving more direct engagement in the field, with sales team members partnering closely with our drivers, even joining them on delivery routes and meeting customers face-to-face. The result is a stronger, more collaborative, customer-focused culture where accountability and accessibility are shared across the organization. Importantly, our separation has enabled us to build dedicated LTL expertise across our entire Commercial Organization. We're already seeing that investment take hold as our sales team deepened customer relationships, introduced fit-for-purpose LTL solutions, and accelerated adoption of our modernized LTL-focused technology platforms. Also during the fourth quarter, we successfully executed our technology separation plan, enabling a tax-free spend from FedEx Corp. I am pleased to say that we have now transitioned to a steady state operations with a more stable IT environment. And as a critical part of this transition, we launched new purpose-built capabilities designed specifically for the LTL market. The key milestone was the launch of FedExFreight.com in May. establishing our standalone digital presence, and we're already seeing strong customer adoption. Early engagement has exceeded expectations with nearly half a million unique site visits and approximately 250,000 of online shipments already scheduled since launch. Also in May, we launched our new freight pricing system, a purpose-built, LTL platform on a more modern, flexible, and scalable technology stack. This is an important step in addressing pricing complexity that previously required significant manual intervention and time while improving efficiency and positioning us to evolve our pricing capabilities more effectively over time. While still early, we are beginning to see tangible progress. For example, we successfully onboarded one of our largest and most complex customer contracts, something our system did not support previously, which we view as a meaningful proof point of this platform's capabilities. We see this as a foundational investment with additional enhancements and efficiency gains expected as we continue to build on the system in the upcoming months. From an infrastructure standpoint, we also completed a large-scale, high-quality transition. More than 1,000 applications were successfully separated, including the core systems required to run this business, with minimal disruption to customers, operations, and revenue. Approximately 17,000 devices have been migrated into the freight environments, and we have achieved further stabilization of the end-user experience. We have shifted our IT operations from a separation phase to a transformation phase with a strong focus on modernization, reliability, and continuous improvement. Looking ahead, our priorities are clear. First, we are working to exit transition service agreements quickly to reduce cost and risk. Second, we will leverage AI responsibly across the entire organization to drive efficiencies and enhance the customer experience. And finally, we will continue to modernize legacy systems to simplify and streamline our technology stack. As I reflect on the quarter, I am incredibly proud of the progress we've made, reinforcing our strong, scalable model that positions FedEx Freight for long-term growth as a standalone company. Now, at the core of this model is a single, integrated network hiring our dual-service offering, an important differentiator and a key driver to both efficiency, and profitability. Nearly half of our customers use both priority and economy, underscoring the value of the flexibility we provide, enabling them to choose how they manage speed and cost. Our priority service is approximately 40% faster than our nearest competitor based on published transit times. Priority shipments currently have shorter lengths of haul and more time-sensitive characteristics, supporting stronger yield and premium pricing. Complementing that, our economy offering provides a structurally lower-cost solution utilizing longer average lengths of haul and low-cost rail to deliver attractive economics for more flexible shipments. Importantly, Both services move through the same network using the same company assets with separation only where it creates a clear economic or service advantage. That flexibility allows us to optimize capacity, drive density, manage lane imbalances, and maintain service integrity. And in practice, we can extend operating windows and utilize off-peak capacity, avoiding the need for incremental infrastructure while improving asset utilization and capital efficiency. At the same time, flexible economy routing enhances network resiliency, particularly during weather disruptions. From a commercial standpoint, our sales force sells both, delivering integrated solutions that are tailored to customer needs. And financially, our dual service model is compelling. Today, both services generate healthy, comparable margins, driven by premium pricing and priority and structurally lower costs in economy. As we continue to simplify the customer experience, speed and efficiency become clear differentiators. unlocking additional value in both our priority and economy offerings. Bottom line, this is our advantage. One network, two services, and a structurally more efficient, resilient platform for growth and flexibility. Now, I'll turn it over to Marshall, who will outline how our operational strength is translating into solid financial performance. He will also provide additional detail on our outlook for the Reindeer of the Year. Marshall?