##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended May 31, 2011.
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 Commission file number 1-7806
 FEDERAL EXPRESS CORPORATION
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
    
    71-0427007(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)3610 Hacks Cross Road, Memphis, Tennessee
    
    38125(Address of Principal Executive Offices)
    
    (ZIP Code)
 901) 369-3600
  Title of each class
    
    Name of each exchange on which registeredNone
    
    None
  Yes o No þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  The Registrant meets the conditions set forth in General Instruction I(1)(a) and (b) of Form
10-K and is therefore filing this Form with the reduced disclosure format permitted by General
Instruction I(2).




---



##### 



TABLE OF CONTENTS
 PagePART IITEM 1. Business
    
    
    3ITEM 1A. Risk Factors
    
    
    11ITEM 1B. Unresolved Staff Comments
    
    
    11ITEM 2. Properties
    
    
    11ITEM 3. Legal Proceedings
    
    
    14ITEM 4. Reserved
    
    
    15PART IIITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    15ITEM 6. Selected Financial Data
    
    
    15ITEM 7. Managements Discussion and Analysis of Results of Operations and Financial Condition
    
    
    15ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15ITEM 8. Financial Statements and Supplementary Data
    
    
    15ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    
    
    15ITEM 9A. Controls and Procedures
    
    
    16ITEM 9B. Other Information
    
    
    16PART IIIITEM 10. Directors, Executive Officers and Corporate Governance
    
    
    16ITEM 11. Executive Compensation
    
    
    16ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    16ITEM 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    16ITEM 14. Principal Accountant Fees and Services
    
    
    17PART IVITEM 15. Exhibits, Financial Statement Schedules
    
    
    18FINANCIAL SECTIONTable of Contents
    
    
    21Managements Discussion and Analysis
    
    
    22Consolidated Financial Statements
    
    
    33Other Financial Information
    
    
    62EXHIBITSExhibit Index
    
    
    E-1Exhibit 23Exhibit 24Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




---



##### Table of Contents



PART I
 
 ITEM 1.
    
    BUSINESS
 Overview
      Services
    -3-




---



##### Table of Contents



fedex.com
 International Expansion
  
    
    We have agreed, subject to certain conditions, to purchase a total of 45 B777 Freighter
(B777F) aircraft, a new high-capacity, long-range airplane, 12 of which have already been
delivered. We also hold options to purchase an additional 13 B777F aircraft. The B777F
enables us to fly between major world markets with lower operating costs, more shipments and
in less time than before, allowing later cut-off times for customers in these markets to drop
off their shipments.
 
    
    In 2011, we added more daily scheduled transpacific and transatlantic flights, providing
needed capacity between Asia, Europe and the United States.
  
    
    In February 2011, we acquired the Indian logistics, distribution and express businesses of
AFL Pvt. Ltd. and its affiliate Unifreight India Pvt. Ltd.
 
    
    On December 15, 2010, we entered into an agreement to acquire
Servicios Nacionales Mupa, S.A. de C.V. (MultiPack), a Mexican
domestic express package delivery company, which we expect to complete in the first quarter of 2012.
    -4-




---



##### Table of Contents



Technology
   fedex.com fedex.com fedex.com fedex.com
    Marketing
  
    
    The National Football League (NFL), as its Official Delivery Service Sponsor
 
    
    FedExField, home of the NFLs Washington Redskins
  -5-




---



##### Table of Contents




    
    The #11 Joe Gibbs Racing Toyota Camry driven by Denny Hamlin in the NASCAR Sprint Cup
Series
 
    
    PGA TOUR and the Champions Tour golf organizations, as the Official Shipping Company, and
FedExCup, a season-long points competition for PGA TOUR players
 
    
    The FedEx St. Jude Classic, a PGA TOUR event that raises millions of dollars for St. Jude
Childrens Research Hospital
 
    
    FedExForum, home of the NBAs Memphis Grizzlies
 
    
    ATP World Tour mens professional tennis circuit and French Open tennis tournament
 U.S. Postal Service Agreement
  Pricing
  fedex.com
 Operations
    -6-




---



##### Table of Contents



Fuel Supplies and Costs
   Total Cost
    
    
    Percentage of TotalFiscal Year
    
    (in millions)
    
    
    Revenues2011
    
    $
    3,178
    
    
    
    13.2
    %2010
    
    
    2,342
    
    
    
    11.02009
    
    
    2,932
    
    
    
    13.22008
    
    
    3,396
    
    
    
    14.02007
    
    
    2,639
    
    
    
    11.7
  Competition
    -7-




---



##### Table of Contents



Employees
    Trademarks
  Regulation
 Air .
     -8-




---



##### Table of Contents



Ground .
  International .
  Communication .
  -9-




---



##### Table of Contents



Environmental .
   Labor.
    -10-




---



##### Table of Contents



ITEM 1A.
    
    RISK FACTORS
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 2.
    
    PROPERTIES
  Aircraft and Vehicles
  Maximum OperationalRevenue Payload(Pounds perDescription
    
    Owned
    
    
    Leased
    
    
    Total
    
    
    Aircraft)(1)Boeing B777F
    
    
    12
    
    
    
    0
    
    
    
    12
    
    
    
    178,000Boeing MD11
    
    
    38
    
    
    
    26
    
    
    
    64
    (2)
    
    
    164,200Boeing MD10-30
    
    
    10
    
    
    
    7
    
    
    
    17
    
    
    
    114,200Boeing MD10-10
    
    
    58
    
    
    
    0
    
    
    
    58
    
    
    
    108,700Airbus A300-600
    
    
    35
    
    
    
    36
    
    
    
    71
    
    
    
    85,600Airbus A310-200/300
    
    
    50
    
    
    
    3
    
    
    
    53
    
    
    
    61,900Boeing B757-200
    
    
    58
    
    
    
    0
    
    
    
    58
    (3)
    
    
    45,800Boeing B727-200
    
    
    65
    
    
    
    2
    
    
    
    67
    
    
    
    38,200ATR 72-202/212
    
    
    21
    
    
    
    0
    
    
    
    21
    (4)
    
    
    14,660ATR 42-300/320
    
    
    26
    
    
    
    0
    
    
    
    26
    
    
    
    10,880Cessna 208B
    
    
    241
    
    
    
    0
    
    
    
    241
    
    
    
    2,500Total
    
    
    614
    
    
    
    74
    
    
    
    688
 
 (1)
    
    Maximum operational revenue payload is the lesser of the net volume-limited payload and the
net maximum structural payload.(2)
    
    Includes 4 aircraft not currently in operation and awaiting completion of modification.(3)
    
    Includes 21 aircraft not currently in operation and awaiting completion of modification.(4)
    
    Includes 5 aircraft not currently in operation and awaiting completion of modification. 
    
    The B777Fs are two-engine, wide-bodied cargo aircraft that have a longer range and
larger capacity than any aircraft we operate.
 
    
    The MD11s are three-engine, wide-bodied aircraft that have a longer range and larger
capacity than MD10s.
  -11-




---



##### Table of Contents




    
    The MD10s are three-engine, wide-bodied aircraft that have received an Advanced Common
Flightdeck (ACF) modification, which includes a conversion to a two-pilot cockpit, as well as
upgrades of electrical and other systems.
 
    
    The A300s and A310s are two-engine, wide-bodied aircraft that have a longer range and more
capacity than B757s and B727s.
 
    
    The B757s are two-engine, narrow-bodied aircraft configured for cargo service.
 
    
    The B727s are three-engine, narrow-bodied aircraft configured for cargo service.
 
    
    The ATR and Cessna 208 turbo-prop aircraft are leased to independent operators to support
our operations in areas where demand does not justify use of a larger aircraft.
    Aircraft Purchase Commitments
  B757
    
    
    B777F(1)
    
    
    Total2012
    
    
    16
    
    
    
    7
    
    
    
    232013
    
    
    4
    
    
    
    6
    
    
    
    102014
    
    
    
    
    
    
    7
    
    
    
    72015
    
    
    
    
    
    
    3
    
    
    
    32016
    
    
    
    
    
    
    3
    
    
    
    3Thereafter
    
    
    
    
    
    
    7
    
    
    
    7Total
    
    
    20
    
    
    
    33
    
    
    
    53
 (1)
    
    Our obligation to purchase 15 of these aircraft is conditioned upon there being no event
that causes us or our employees to not be covered by the RLA.   -12-




---



##### Table of Contents



Sorting and Handling Facilities
  Sorting
    
    
    
    
    LeaseSquare
    
    
    Capacity
    
    
    
    
    ExpirationLocation
    
    Acres
    
    
    Feet
    
    
    (per hour)(1)
    
    
    Lessor
    
    YearNationalMemphis, Tennessee
    
    
    518
    
    
    
    3,450,000
    
    
    
    475,000
    
    
    Memphis-Shelby County Airport Authority
    
    2036Indianapolis, Indiana
    
    
    335
    
    
    
    2,509,000
    
    
    
    215,000
    
    
    Indianapolis Airport Authority
    
    2017/2028 (5)RegionalFort Worth, Texas
    
    
    168
    
    
    
    948,000
    
    
    
    76,000
    
    
    Fort Worth Alliance Airport Authority
    
    2021Newark, New Jersey
    
    
    70
    
    
    
    595,000
    
    
    
    156,000
    
    
    Port Authority of New York and New Jersey
    
    2030Oakland, California
    
    
    75
    
    
    
    320,000
    
    
    
    54,000
    
    
    City of Oakland
    
    2031Greensboro, N. Carolina
    
    
    165
    
    
    
    593,000
    
    
    
    29,000
    
    
    Piedmont Triad Airport Authority
    
    2031MetropolitanChicago, Illinois
    
    
    51
    
    
    
    419,000
    
    
    
    52,000
    
    
    City of Chicago
    
    2028Los Angeles, California
    
    
    34
    
    
    
    305,000
    
    
    
    57,000
    
    
    City of Los Angeles
    
    2021/2025 (6)InternationalAnchorage, Alaska (2)
    
    
    64
    
    
    
    332,000
    
    
    
    24,000
    
    
    Alaska Department of Transportation and Public Facilities
    
    2023Paris, France (3)
    
    
    87
    
    
    
    861,000
    
    
    
    63,000
    
    
    Aeroports de Paris
    
    2029Cologne, Germany (3)
    
    
    7
    
    
    
    325,000
    
    
    
    20,000
    
    
    Cologne Bonn Airport
    
    2040Guangzhou, China (4)
    
    
    155
    
    
    
    882,000
    
    
    
    61,000
    
    
    Guangdong Airport Management Corp.
    
    2029
 
 (1)
    
    Documents and packages.(2)
    
    Handles international express package and freight shipments to and from Asia, Europe and
North America.(3)
    
    Handles intra-Europe express package and freight shipments, as well as international express
package and freight shipments to and from Europe.(4)
    
    Handles intra-Asia express package and freight shipments, as well as international express
package and freight shipments to and from Asia.(5)
    
    Property is held under two separate leases  lease for original hub expires in 2017, and
lease for additional buildings expires in 2028.(6)
    
    Property is held under two separate leases  lease for sorting and handling facility expires
in 2021, and lease for ramp expansion expires in 2025.  -13-




---



##### Table of Contents



Administrative and Other Properties and Facilities
    
 ITEM 3.
    
    LEGAL PROCEEDINGS
     -14-




---



##### Table of Contents



ITEM 4.
    
    RESERVED
 
 PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  
 ITEM 6.
    
    SELECTED FINANCIAL DATA
  
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
  
 ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
   -15-




---



##### Table of Contents



ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Managements Evaluation of Disclosure Controls and Procedures
  Assessment of Internal Control Over Financial Reporting
  Changes in Internal Control Over Financial Reporting
  
 ITEM 9B.
    
    OTHER INFORMATION
  
 PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
   -16-




---



##### Table of Contents



ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  2011
    
    
    2010Audit fees
    
    $
    8,102
    
    
    $
    7,924Audit-related fees
    
    
    524
    
    
    
    666Tax fees
    
    
    354
    
    
    
    322All other fees
    
    
    3
    
    
    
    56Total
    
    $
    8,983
    
    
    $
    8,968
 
    
    Audit Fees.Represents fees for professional services provided for the audit of FedEx
Expresss annual financial statements and review of FedEx Expresss quarterly financial
statements, for the audit of FedEx Expresss internal control over financial reporting and
for audit services provided in connection with other statutory or regulatory filings.
 
    
    Audit-Related Fees.Represents fees for assurance and other services related to the
audit of FedEx Expresss financial statements. The fees for 2011 and 2010 include fees
primarily for benefit plan audits.
 
    
    Tax Fees.Represents fees for professional services provided primarily for domestic and
international tax compliance and advice. Tax compliance and preparation fees totaled
$137,000 in 2011 and $169,000 in 2010.
 
    
    All Other Fees.Represents fees for products and services not otherwise included in the
categories above. The amounts shown for 2011 and 2010 include fees for information
technology risk advisory and online technical resources.
 http://ir.fedex.com/documentdisplay.cfm?DocumentID=122
    -17-




---



##### Table of Contents



PART IV
 
 ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a)(1) and (2) Financial Statements; Financial Statement Schedules
  (a)(3) Exhibits
   -18-




---



##### Table of Contents



SIGNATURES
  FEDERAL EXPRESS CORPORATIONDated:  July 12, 2011
    By:
    /s/ DAVID J. BRONCZEKDavid J. BronczekPresident and Chief Executive Officer  Signature
    
    Capacity
    
    Date/s/ DAVID J. BRONCZEK

David J. Bronczek
    
    President, Chief Executive Officer
and Director(Principal Executive Officer)
    
    July 12, 2011/s/ CATHY D. ROSS

Cathy D. Ross
    
    Executive Vice President, Chief
Financial Officer and Director(Principal Financial Officer)
    
    July 12, 2011/s/ J. RICK BATEMAN

J. Rick Bateman
    
    Vice President and Worldwide
Controller(Principal Accounting Officer)
    
    July 12, 2011/s/ FREDERICK W. SMITH*

Frederick W. Smith
    
    Chairman of the Board of Directors
    
    July 12, 2011/s/ ROBERT B. CARTER*

Robert B. Carter
    
    Director
    
    July 12, 2011/s/ MICHAEL L. DUCKER*

Michael L. Ducker
    
    Executive Vice President and
Chief Operating Officer and
Director
    
    July 12, 2011/s/ T. MICHAEL GLENN*

T. Michael Glenn
    
    Director
    
    July 12, 2011
  -19-




---



##### Table of Contents



Signature
    
    Capacity
    
    Date/s/ ALAN B. GRAF, JR.*

Alan B. Graf, Jr.
    
    Director
    
    July 12, 2011/s/ JAMES R. PARKER*

James R. Parker
    
    Executive Vice President of Air
Operations and Director
    
    July 12, 2011/s/ CHRISTINE P. RICHARDS*

Christine P. Richards
    
    Director
    
    July 12, 2011
 *By:
    
    /s/ J. RICK BATEMANJ. Rick Bateman
    
    July 12, 2011Attorney-in-Fact
  -20-




---



##### Table of Contents



FINANCIAL SECTION TABLE OF CONTENTS
 PAGEManagements Discussion and Analysis of Results of Operations
and Financial ConditionOverview of Financial Section
    
    
    22Results of Operations
    
    
    24New Accounting Guidance
    
    
    28Risk Factors
    
    
    29Forward-Looking Statements
    
    
    32Consolidated Financial StatementsManagements Report on Internal Control over Financial Reporting
    
    
    33Reports of Independent Registered Public Accounting Firm
    
    
    34Consolidated Balance SheetsMay 31, 2011 and 2010
    
    
    36Consolidated Statements of IncomeYears Ended May 31, 2011, 2010 and 2009
    
    
    38Consolidated Statements of Cash FlowsYears Ended May 31, 2011, 2010 and 2009
    
    
    39Consolidated
Statements of Changes in Owners Equity and Comprehensive IncomeYears Ended May 31, 2011, 2010 and 2009
    
    
    40Notes to Consolidated Financial Statements
    
    
    41Other Financial InformationQuantitative and Qualitative Disclosures about Market Risk
    
    
    62Report of Independent Registered Public Accounting Firm
    
    
    63Schedule II  Valuation and Qualifying Accounts
    
    
    64Computation of Ratio of Earnings to Fixed Charges
    
    
    65
  -21-




---



##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
 OVERVIEW OF FINANCIAL SECTION
  DESCRIPTION OF BUSINESS
     -22-




---



##### Table of Contents




    
    the overall customer demand for our various services;
 
    
    the volume of shipments transported through our network, as measured by our average daily
volume and shipment weight;
 
    
    the mix of services purchased by our customers;
 
    
    the prices we obtain for our services, as measured by average revenue per package (yield);
 
    
    our ability to manage our cost structure (capital expenditures and operating expenses) to
match shifting volume levels; and
 
    
    the timing and amount of fluctuations in fuel prices and our ability to recover incremental
fuel costs through our fuel surcharges.
    -23-




---



##### Table of Contents



RESULTS OF OPERATIONS
  Percent Change2011
    
    
    2010
    
    
    2009
    
    
    2011/2010
    
    
    2010/2009Revenues:Package:U.S. overnight box
    
    $
    6,128
    
    
    $
    5,602
    
    
    $
    6,074
    
    
    
    9
    
    
    
    (8
    )U.S. overnight envelope
    
    
    1,736
    
    
    
    1,640
    
    
    
    1,855
    
    
    
    6
    
    
    
    (12
    )U.S. deferred
    
    
    2,805
    
    
    
    2,589
    
    
    
    2,789
    
    
    
    8
    
    
    
    (7
    )Total U.S. domestic package revenue
    
    
    10,669
    
    
    
    9,831
    
    
    
    10,718
    
    
    
    9
    
    
    
    (8
    )International priority
    
    
    8,228
    
    
    
    7,087
    
    
    
    6,978
    
    
    
    16
    
    
    
    2International domestic(1)
    
    
    653
    
    
    
    578
    
    
    
    565
    
    
    
    13
    
    
    
    2Total package revenue
    
    
    19,550
    
    
    
    17,496
    
    
    
    18,261
    
    
    
    12
    
    
    
    (4
    )Freight:U.S.
    
    
    2,188
    
    
    
    1,980
    
    
    
    2,165
    
    
    
    11
    
    
    
    (9
    )International priority
    
    
    1,722
    
    
    
    1,303
    
    
    
    1,104
    
    
    
    32
    
    
    
    18International airfreight
    
    
    283
    
    
    
    251
    
    
    
    369
    
    
    
    13
    
    
    
    (32
    )Total freight revenue
    
    
    4,193
    
    
    
    3,534
    
    
    
    3,638
    
    
    
    19
    
    
    
    (3
    )Other
    
    
    247
    
    
    
    213
    
    
    
    268
    
    
    
    16
    
    
    
    (21
    )Total revenues
    
    
    23,990
    
    
    
    21,243
    
    
    
    22,167
    
    
    
    13
    
    
    
    (4
    )Operating expenses:Salaries and employee benefits
    
    
    8,919
    
    
    
    8,177
    
    
    
    8,031
    
    
    
    9
    
    
    
    2Purchased transportation
    
    
    1,243
    
    
    
    1,058
    
    
    
    1,063
    
    
    
    17
    
    
    
    Rentals and landing fees
    
    
    1,650
    
    
    
    1,557
    
    
    
    1,598
    
    
    
    6
    
    
    
    (3
    )Depreciation and amortization
    
    
    1,048
    
    
    
    1,005
    
    
    
    952
    
    
    
    4
    
    
    
    6Fuel
    
    
    3,553
    
    
    
    2,652
    
    
    
    3,281
    
    
    
    34
    
    
    
    (19
    )Maintenance and repairs
    
    
    1,348
    
    
    
    1,127
    
    
    
    1,348
    
    
    
    20
    
    
    
    (16
    )Impairment and other charges(2)
    
    
    
    
    
    
    
    
    
    
    258
    
    
    
    
    
    NMIntercompany charges
    
    
    2,015
    
    
    
    1,918
    
    
    
    2,093
    
    
    
    5
    
    
    
    (8
    )Other
    
    
    3,008
    (3)
    
    
    2,623
    
    
    
    2,778
    
    
    
    15
    
    
    
    (6
    )Total operating expenses
    
    
    22,784
    
    
    
    20,117
    
    
    
    21,402
    
    
    
    13
    
    
    
    (6
    )Operating income
    
    $
    1,206
    
    
    $
    1,126
    
    
    $
    765
    
    
    
    7
    
    
    
    47Operating margin
    
    
    5.0
    %
    
    
    5.3
    %
    
    
    3.5
    %
    
    (30
    ) bp
    
    180
    bpOther income (expense):Interest, net
    
    
    10
    
    
    
    15
    
    
    
    4
    
    
    
    (33
    )
    
    
    275Other, net
    
    
    (76
    )
    
    
    (82
    )
    
    
    (37
    )
    
    
    (7
    )
    
    
    122(66
    )
    
    
    (67
    )
    
    
    (33
    )
    
    
    (1
    )
    
    
    103Income before income taxes
    
    
    1,140
    
    
    
    1,059
    
    
    
    732
    
    
    
    8
    
    
    
    45Provision for income taxes
    
    
    409
    
    
    
    408
    
    
    
    301
    
    
    
    
    
    
    
    36Net income
    
    $
    731
    
    
    $
    651
    
    
    $
    431
    
    
    
    12
    
    
    
    51
 (1)
    
    International domestic revenues include our international intra-country domestic operations.(2)
    
    Represents charges for aircraft-related asset impairments and other charges primarily associated with aircraft-related lease and contract termination costs and employee severance.(3)
    
    Includes a $66 million legal reserve associated with the ATA Airlines lawsuit.  -24-




---



##### Table of Contents



Percent of Revenue2011
    
    
    2010
    
    
    2009Operating expenses:Salaries and employee benefits
    
    
    37.2
    %
    
    
    38.5
    %
    
    
    36.2
    %Purchased transportation
    
    
    5.2
    
    
    
    5.0
    
    
    
    4.8Rentals and landing fees
    
    
    6.9
    
    
    
    7.3
    
    
    
    7.2Depreciation and amortization
    
    
    4.4
    
    
    
    4.7
    
    
    
    4.3Fuel
    
    
    14.8
    
    
    
    12.5
    
    
    
    14.8Maintenance and repairs
    
    
    5.6
    
    
    
    5.3
    
    
    
    6.1Impairment and other charges
    
    
    
    
    
    
    
    
    
    
    1.2
    (1)Intercompany charges
    
    
    8.4
    
    
    
    9.0
    
    
    
    9.4Other
    
    
    12.5
    (2)
    
    
    12.4
    
    
    
    12.5Total operating expenses
    
    
    95.0
    
    
    
    94.7
    
    
    
    96.5Operating margin
    
    
    5.0
    %
    
    
    5.3
    %
    
    
    3.5
    %
 (1)
    
    Includes a charge of $258 million for  aircraft-related asset impairments and other charges primarily associated with aircraft-related lease and contract
termination costs and employee severance.(2)
    
    Includes a $66 million legal reserve associated with the ATA Airlines lawsuit.  Percent Change2011
    
    
    2010
    
    
    2009
    
    
    2011/2010
    
    
    2010/2009Package StatisticsAverage daily package volume (ADV):U.S. overnight box
    
    
    1,184
    
    
    
    1,157
    
    
    
    1,127
    
    
    
    2
    
    
    
    3U.S. overnight envelope
    
    
    627
    
    
    
    614
    
    
    
    627
    
    
    
    2
    
    
    
    (2
    )U.S. deferred
    
    
    873
    
    
    
    867
    
    
    
    849
    
    
    
    1
    
    
    
    2Total U.S. domestic ADV
    
    
    2,684
    
    
    
    2,638
    
    
    
    2,603
    
    
    
    2
    
    
    
    1International priority
    
    
    575
    
    
    
    523
    
    
    
    475
    
    
    
    10
    
    
    
    10International domestic(1)
    
    
    348
    
    
    
    318
    
    
    
    298
    
    
    
    9
    
    
    
    7Total ADV
    
    
    3,607
    
    
    
    3,479
    
    
    
    3,376
    
    
    
    4
    
    
    
    3Revenue per package (yield):U.S. overnight box
    
    $
    20.29
    
    
    $
    19.00
    
    
    $
    21.21
    
    
    
    7
    
    
    
    (10
    )U.S. overnight envelope
    
    
    10.86
    
    
    
    10.47
    
    
    
    11.65
    
    
    
    4
    
    
    
    (10
    )U.S. deferred
    
    
    12.60
    
    
    
    11.70
    
    
    
    12.94
    
    
    
    8
    
    
    
    (10
    )U.S. domestic composite
    
    
    15.59
    
    
    
    14.61
    
    
    
    16.21
    
    
    
    7
    
    
    
    (10
    )International priority
    
    
    56.08
    
    
    
    53.10
    
    
    
    57.81
    
    
    
    6
    
    
    
    (8
    )International domestic(1)
    
    
    7.38
    
    
    
    7.14
    
    
    
    7.50
    
    
    
    3
    
    
    
    (5
    )Composite package yield
    
    
    21.25
    
    
    
    19.72
    
    
    
    21.30
    
    
    
    8
    
    
    
    (7
    )Freight StatisticsAverage daily freight pounds:U.S.
    
    
    7,340
    
    
    
    7,141
    
    
    
    7,287
    
    
    
    3
    
    
    
    (2
    )International priority
    
    
    3,184
    
    
    
    2,544
    
    
    
    1,959
    
    
    
    25
    
    
    
    30International airfreight
    
    
    1,235
    
    
    
    1,222
    
    
    
    1,475
    
    
    
    1
    
    
    
    (17
    )Total average daily freight pounds
    
    
    11,759
    
    
    
    10,907
    
    
    
    10,721
    
    
    
    8
    
    
    
    2Revenue per pound (yield):U.S.
    
    $
    1.17
    
    
    $
    1.09
    
    
    $
    1.17
    
    
    
    7
    
    
    
    (7
    )International priority
    
    
    2.12
    
    
    
    2.01
    
    
    
    2.22
    
    
    
    5
    
    
    
    (9
    )International airfreight
    
    
    0.90
    
    
    
    0.81
    
    
    
    0.99
    
    
    
    11
    
    
    
    (18
    )Composite freight yield
    
    
    1.40
    
    
    
    1.27
    
    
    
    1.34
    
    
    
    10
    
    
    
    (5
    )
 (1)
    
    International domestic statistics include our international intra-country domestic express operations.  -25-




---



##### Table of Contents



Revenues
    2011
    
    
    2010
    
    
    2009U.S. Domestic and
Outbound Fuel
Surcharge:Low
    
    
    7.00
    %
    
    
    1.00
    %
    
    
    
    %High
    
    
    15.50
    
    
    
    8.50
    
    
    
    34.50Weighted-average
    
    
    9.77
    
    
    
    6.20
    
    
    
    17.45International Fuel
Surcharges:Low
    
    
    7.00
    
    
    
    1.00
    
    
    
    High
    
    
    21.00
    
    
    
    13.50
    
    
    
    34.50Weighted-average
    
    
    12.36
    
    
    
    9.47
    
    
    
    16.75
  Operating Income
    -26-




---



##### Table of Contents



Other Income and Expense and Income Taxes
     2011
    
    
    2010
    
    
    2009Current
    
    $
    (227
    )
    
    $
    (160
    )
    
    $
    (150
    )Deferred
    
    
    447
    
    
    
    348
    
    
    
    241Total Federal Provision
    
    $
    220
    
    
    $
    188
    
    
    $
    91
  -27-




---



##### Table of Contents



Business Acquisitions
   Outlook
     Seasonality of Business
  Contractual Cash Obligations
   
 NEW ACCOUNTING GUIDANCE
    -28-




---



##### Table of Contents



RISK FACTORS
  We are directly affected by the state of the economy.
 Our business depends on our strong reputation and the value of the FedEx brand.
 We rely heavily on information and technology to operate our transportation and business networks,
and any disruption to FedExs technology infrastructure or the Internet could harm our operations
and our reputation among customers.
 Our transportation business may be impacted by the price and availability of fuel.
  -29-




---



##### Table of Contents



Our business is capital intensive, and we must make capital expenditures based upon projected
volume levels.
 We face intense competition.
 Labor organizations attempt to organize groups of our employees from time to time, and potential
changes in labor laws could make it easier for them to do so.
 If we do not effectively operate, integrate, leverage and grow acquired businesses, our financial
results and reputation may suffer.
 Increased security or pilot safety requirements could impose substantial costs on us.
  -30-




---



##### Table of Contents



The regulatory environment for global aviation or other transportation rights may impact our
operations.
 We may be affected by global climate change or by legal, regulatory or market responses to such
change.
 A localized disaster in a key geography could adversely impact our business.
  -31-




---



##### Table of Contents



We are also subject to other risks and uncertainties that affect many other businesses, including:
 
    
    increasing costs, the volatility of costs and funding requirements and other legal mandates
for employee benefits, especially pension and healthcare benefits;
 
    
    the increasing costs of compliance with federal and state governmental agency mandates and
defending against inappropriate or unjustified enforcement or other actions by such agencies;
 
    
    the impact of any international conflicts or terrorist activities on the United States and
global economies in general, the transportation industry or us in particular, and what effects
these events will have on our costs or the demand for our services;
 
    
    any impacts on our business resulting from new domestic or international government laws
and regulation;
 
    
    changes in foreign currency exchange rates, especially in the euro, Chinese yuan, Canadian
dollar, British pound and Japanese yen, which can affect our sales levels and foreign currency
sales prices;
 
    
    market acceptance of our new service and growth initiatives;
 
    
    any liability resulting from and the costs of defending against class-action litigation,
such as wage-and-hour, discrimination and retaliation claims, and any other legal
proceedings;
 
    
    the outcome of future negotiations to reach new collective
bargaining agreements  including with the union that represents our pilots (the current pilot contract is scheduled to
become amendable in March 2013 unless the union exercises its option to shorten the contract,
in which case the agreement would be amendable in March 2012);
 
    
    the impact of technology developments on our operations and on demand for our services, and
FedExs ability to continue to identify and eliminate unnecessary information technology
redundancy and complexity throughout the FedEx organization;
 
    
    widespread outbreak of an illness or any other communicable disease, or any other public
health crisis; and
 
    
    availability of financing on terms acceptable to FedEx and FedExs ability to maintain its
current credit ratings, especially given the capital intensity of our operations.
 
 FORWARD-LOOKING STATEMENTS
    -32-




---



##### Table of Contents



-33-




---



##### Table of Contents



-34-




---



##### Table of Contents



-35-




---



##### Table of Contents



May 31,2011
    
    
    2010ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    626
    
    
    $
    512Receivables, less allowances of $83 and $71
    
    
    1,645
    
    
    
    1,455Spare parts, supplies and fuel, less
allowances of $169 and $170
    
    
    367
    
    
    
    317Deferred income taxes
    
    
    398
    
    
    
    360Due from parent company and other FedEx subsidiaries
    
    
    607
    
    
    
    839Prepaid expenses and other
    
    
    90
    
    
    
    80Total current assets
    
    
    3,733
    
    
    
    3,563PROPERTY AND EQUIPMENT, AT COSTAircraft and related equipment
    
    
    13,146
    
    
    
    11,640Package handling and ground support equipment
    
    
    2,451
    
    
    
    2,291Vehicles
    
    
    1,730
    
    
    
    1,681Computer and electronic equipment
    
    
    706
    
    
    
    754Facilities and other
    
    
    3,589
    
    
    
    3,44621,622
    
    
    
    19,812Less accumulated depreciation and amortization
    
    
    11,110
    
    
    
    10,511Net property and equipment
    
    
    10,512
    
    
    
    9,301OTHER LONG-TERM ASSETSGoodwill
    
    
    1,085
    
    
    
    958Other assets
    
    
    1,016
    
    
    
    776Total other long-term assets
    
    
    2,101
    
    
    
    1,734$
    16,346
    
    
    $
    14,598
   -36-




---



##### Table of Contents



May 31,2011
    
    
    2010LIABILITIES AND OWNERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    17
    
    
    $
    12Accrued salaries and employee benefits
    
    
    836
    
    
    
    779Accounts payable
    
    
    1,092
    
    
    
    952Accrued expenses
    
    
    1,084
    
    
    
    1,080Due to other FedEx subsidiaries
    
    
    283
    
    
    
    146Total current liabilities
    
    
    3,312
    
    
    
    2,969LONG-TERM DEBT, LESS CURRENT PORTION
    
    
    655
    
    
    
    655OTHER LONG-TERM LIABILITIESDeferred income taxes
    
    
    1,994
    
    
    
    1,500Pension, postretirement healthcare and
other benefit obligations
    
    
    867
    
    
    
    786Self-insurance accruals
    
    
    631
    
    
    
    609Deferred lease obligations
    
    
    695
    
    
    
    723Deferred gains, principally related to
aircraft transactions
    
    
    244
    
    
    
    265Other liabilities
    
    
    115
    
    
    
    102Total other long-term liabilities
    
    
    4,546
    
    
    
    3,985COMMITMENTS AND CONTINGENCIESOWNERS EQUITYCommon stock, $0.10 par value; 1,000 shares
authorized, issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    608
    
    
    
    608Retained earnings
    
    
    7,107
    
    
    
    6,376Accumulated other comprehensive income
    
    
    118
    
    
    
    5Total owners equity
    
    
    7,833
    
    
    
    6,989$
    16,346
    
    
    $
    14,598
   -37-




---



##### Table of Contents



Years ended May 31,2011
    
    
    2010
    
    
    2009REVENUES
    
    $
    23,990
    
    
    $
    21,243
    
    
    $
    22,167OPERATING EXPENSES:Salaries and employee benefits
    
    
    8,919
    
    
    
    8,177
    
    
    
    8,031Purchased transportation
    
    
    1,243
    
    
    
    1,058
    
    
    
    1,063Rentals and landing fees
    
    
    1,650
    
    
    
    1,557
    
    
    
    1,598Depreciation and amortization
    
    
    1,048
    
    
    
    1,005
    
    
    
    952Fuel
    
    
    3,553
    
    
    
    2,652
    
    
    
    3,281Maintenance and repairs
    
    
    1,348
    
    
    
    1,127
    
    
    
    1,348Impairment and other charges
    
    
    
    
    
    
    
    
    
    
    258Intercompany charges
    
    
    2,015
    
    
    
    1,918
    
    
    
    2,093Other
    
    
    3,008
    
    
    
    2,623
    
    
    
    2,77822,784
    
    
    
    20,117
    
    
    
    21,402OPERATING INCOME
    
    
    1,206
    
    
    
    1,126
    
    
    
    765OTHER INCOME (EXPENSE):Interest expense
    
    
    
    
    
    
    
    
    
    
    (4
    )Interest income
    
    
    10
    
    
    
    15
    
    
    
    8Other, net
    
    
    (76
    )
    
    
    (82
    )
    
    
    (37
    )(66
    )
    
    
    (67
    )
    
    
    (33
    )INCOME BEFORE INCOME TAXES
    
    
    1,140
    
    
    
    1,059
    
    
    
    732PROVISION FOR INCOME TAXES
    
    
    409
    
    
    
    408
    
    
    
    301NET INCOME
    
    $
    731
    
    
    $
    651
    
    
    $
    431
   -38-




---



##### Table of Contents



Years ended May 31,2011
    
    
    2010
    
    
    2009Operating Activities:Net income
    
    $
    731
    
    
    $
    651
    
    
    $
    431Adjustments to reconcile net income to cash
provided by operating activities:Depreciation and amortization
    
    
    1,048
    
    
    
    1,005
    
    
    
    952Provision for uncollectible accounts
    
    
    117
    
    
    
    75
    
    
    
    116Deferred income taxes and other noncash items
    
    
    425
    
    
    
    274
    
    
    
    259Noncash impairment charges
    
    
    
    
    
    
    
    
    
    
    199Changes in assets and liabilities:Receivables
    
    
    (138
    )
    
    
    (369
    )
    
    
    316Other current assets
    
    
    174
    
    
    
    32
    
    
    
    (248
    )Accounts payable and other liabilities
    
    
    270
    
    
    
    444
    
    
    
    (603
    )Other, net
    
    
    (6
    )
    
    
    23
    
    
    
    (34
    )Cash provided by operating activities
    
    
    2,621
    
    
    
    2,135
    
    
    
    1,388Investing Activities:Capital expenditures
    
    
    (2,453
    )
    
    
    (1,851
    )
    
    
    (1,345
    )Proceeds from asset dispositions and other
    
    
    16
    
    
    
    26
    
    
    
    50Business acquisition, net of cash acquired
    
    
    (96
    )
    
    
    
    
    
    
    Cash used in investing activities
    
    
    (2,533
    )
    
    
    (1,825
    )
    
    
    (1,295
    )Financing Activities:Principal payments on debt
    
    
    (12
    )
    
    
    (152
    )
    
    
    (1
    )Payment on loan from parent company
    
    
    
    
    
    
    
    
    
    
    (17
    )Cash used in financing activities
    
    
    (12
    )
    
    
    (152
    )
    
    
    (18
    )Effect of exchange rate changes on cash
    
    
    38
    
    
    
    (6
    )
    
    
    (13
    )Net increase in cash and cash equivalents
    
    
    114
    
    
    
    152
    
    
    
    62Cash and cash equivalents at beginning of period
    
    
    512
    
    
    
    360
    
    
    
    298Cash and cash equivalents at end of period
    
    $
    626
    
    
    $
    512
    
    
    $
    360
   -39-




---



##### Table of Contents



AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    OwnersStock
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalance at May 31, 2008
    
    $
    
    
    
    $
    476
    
    
    $
    5,273
    
    
    $
    165
    
    
    $
    5,914Adjustment to opening balances for
retirement plans measurement date
transition, net of tax benefit of $8 and
expense of $7, respectively
    
    
    
    
    
    
    
    
    
    
    (15
    )
    
    
    11
    
    
    
    (4
    )Balance at June 1, 2008
    
    
    
    
    
    
    476
    
    
    
    5,258
    
    
    
    176
    
    
    
    5,910Net income
    
    
    
    
    
    
    
    
    
    
    431
    
    
    
    
    
    
    
    431Foreign currency translation adjustment,
net of tax of $25
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (106
    )
    
    
    (106
    )Retirement plans adjustments,
net of tax of $39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68
    
    
    
    68Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393Contribution by parent company
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    16Balance at May 31, 2009
    
    
    
    
    
    
    492
    
    
    
    5,689
    
    
    
    138
    
    
    
    6,319Net income
    
    
    
    
    
    
    
    
    
    
    651
    
    
    
    
    
    
    
    651Foreign currency translation adjustment,
net of tax of $3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )
    
    
    (27
    )Retirement plans adjustments,
net of tax of $61
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (106
    )
    
    
    (106
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    518Transfer from other FedEx subsidiaries
    
    
    
    
    
    
    116
    
    
    
    36
    
    
    
    
    
    
    
    152Balance at May 31, 2010
    
    
    
    
    
    
    608
    
    
    
    6,376
    
    
    
    5
    
    
    
    6,989Net income
    
    
    
    
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    731Foreign currency translation adjustment,
net of tax of $24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120
    
    
    
    120Retirement plans adjustments,
net of tax of $6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    (7
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    844Balance at May 31, 2011
    
    $
    
    
    
    $
    608
    
    
    $
    7,107
    
    
    $
    118
    
    
    $
    7,833
   -40-




---



##### Table of Contents



DESCRIPTION OF BUSINESS.
 FISCAL YEARS
 PRINCIPLES OF CONSOLIDATION
 REVENUE RECOGNITION
  ACCOUNTS RECEIVABLE ARRANGEMENT
 CREDIT RISK
 ADVERTISING
 CASH EQUIVALENTS
 SPARE
PARTS, SUPPLIES AND FUEL
  -41-




---



##### Table of Contents



PROPERTY AND EQUIPMENT
  Net Book Value at May 31,Range
    
    2011
    
    
    2010Wide-body aircraft and related equipment
    
    15 to 30 years
    
    $
    6,536
    
    
    $
    5,897Narrow-body and feeder aircraft and related equipment
    
    5 to 18 years
    
    
    1,517
    
    
    
    1,049Package handling and ground support equipment
    
    5 to 30 years
    
    
    577
    
    
    
    516Vehicles
    
    3 to 10 years
    
    
    317
    
    
    
    299Computer and electronic equipment
    
    3 to 10 years
    
    
    161
    
    
    
    130Facilities and other
    
    2 to 30 years
    
    
    1,404
    
    
    
    1,410
  CAPITALIZED INTEREST
 IMPAIRMENT OF LONG-LIVED ASSETS.
   -42-




---



##### Table of Contents



PENSION AND POSTRETIREMENT HEALTHCARE PLANS.
  GOODWILL.
 INTANGIBLE ASSETS.
 INCOME TAXES
    -43-




---



##### Table of Contents



SELF-INSURANCE ACCRUALS
 LEASES
 DEFERRED GAINS
 FOREIGN CURRENCY TRANSLATION
 EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS.
 STOCK-BASED COMPENSATION.
  USE OF ESTIMATES
  -44-




---



##### Table of Contents



-45-




---



##### Table of Contents



GOODWILL
 Goodwill acquired prior to
May 31, 2009
    
    $
    903Balance as of May 31, 2009
    
    
    903Purchase adjustments and other(1)
    
    
    (11
    )Transfer between segments(2)
    
    
    66Balance as of May 31, 2010
    
    
    958Goodwill acquired(3)
    
    
    89Purchase adjustments and other(1)
    
    
    38Balance as of May 31, 2011(4)
    
    $
    1,085
 (1)
    
    Primarily currency translation adjustments.(2)
    
    Transfer of goodwill for the merger of Caribbean Transportation Services into
us effective June 1, 2009.(3)
    
    Goodwill acquired in 2011 relates to the acquisition of the Indian logistics,
distribution and express businesses of AFL Pvt. Ltd. and its affiliate Unifreight India Pvt. Ltd.
See Note 3 for related disclosures.(4)
    
    We do not have any accumulated impairment losses associated with our goodwill. OTHER INTANGIBLE ASSETS
  -46-




---



##### Table of Contents



May 31,2011
    
    
    2010Accrued Salaries and Employee BenefitsSalaries
    
    $
    172
    
    
    $
    149Employee benefits, including
variable compensation
    
    
    228
    
    
    
    209Compensated absences
    
    
    436
    
    
    
    421$
    836
    
    
    $
    779Accrued ExpensesSelf-insurance accruals
    
    $
    293
    
    
    $
    385Taxes other than income taxes
    
    
    275
    
    
    
    263Other
    
    
    516
    
    
    
    432$
    1,084
    
    
    $
    1,080
   May 31,2011
    
    
    2010Senior unsecured debtInterest rate of 9.65%, due in 2013
    
    $
    300
    
    
    $
    300Interest rate of 7.60%, due in 2098
    
    
    239
    
    
    
    239539
    
    
    
    539Capital lease obligations
    
    
    133
    
    
    
    128672
    
    
    
    667Less current portion
    
    
    17
    
    
    
    12$
    655
    
    
    $
    655
     -47-




---



##### Table of Contents



May 31,2011
    
    
    2010Aircraft
    
    $
    8
    
    
    $
    15Package handling and ground support equipment
    
    
    165
    
    
    
    165Vehicles
    
    
    17
    
    
    
    17Other, principally facilities
    
    
    129
    
    
    
    129319
    
    
    
    326Less accumulated amortization
    
    
    299
    
    
    
    304$
    20
    
    
    $
    22
  2011
    
    
    2010
    
    
    2009Minimum rentals
    
    $
    1,273
    
    
    $
    1,229
    
    
    $
    1,252Contingent rentals(1)
    
    
    145
    
    
    
    122
    
    
    
    143$
    1,418
    
    
    $
    1,351
    
    
    $
    1,395
 (1)
    
    Contingent rentals are based on equipment usage.  Operating LeasesAircraft
    
    
    
    
    
    
    TotalCapital
    
    
    and Related
    
    
    Facilities
    
    
    OperatingLeases
    
    
    Equipment
    
    
    and Other
    
    
    Leases2012
    
    $
    24
    
    
    $
    494
    
    
    $
    662
    
    
    $
    1,1562013
    
    
    117
    
    
    
    499
    
    
    
    585
    
    
    
    1,0842014
    
    
    
    
    
    
    473
    
    
    
    511
    
    
    
    9842015
    
    
    
    
    
    
    455
    
    
    
    485
    
    
    
    9402016
    
    
    
    
    
    
    458
    
    
    
    377
    
    
    
    835Thereafter
    
    
    
    
    
    
    1,545
    
    
    
    3,544
    
    
    
    5,089Total
    
    
    141
    
    
    $
    3,924
    
    
    $
    6,164
    
    
    $
    10,088Less amount representing interest
    
    
    8Present value of net minimum lease
payments
    
    $
    133
  -48-




---



##### Table of Contents



2011
    
    
    2010
    
    
    2009Current provision (benefit)Domestic:Federal
    
    $
    (227
    )
    
    $
    (160
    )
    
    $
    (150
    )State and local
    
    
    (1
    )
    
    
    7
    
    
    
    (17
    )Foreign
    
    
    193
    
    
    
    205
    
    
    
    208(35
    )
    
    
    52
    
    
    
    41Deferred provision (benefit)Domestic:Federal
    
    
    447
    
    
    
    348
    
    
    
    241State and local
    
    
    6
    
    
    
    18
    
    
    
    14Foreign
    
    
    (9
    )
    
    
    (10
    )
    
    
    5444
    
    
    
    356
    
    
    
    260$
    409
    
    
    $
    408
    
    
    $
    301
    -49-




---



##### Table of Contents



2011
    
    
    2010
    
    
    2009Statutory U.S. income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Increase resulting from:Allocation
of FedEx Office and Print Services, Inc. operating costs
    
    
    2.0
    
    
    
    1.9
    
    
    
    5.3State and local income taxes, net of
federal benefit
    
    
    0.3
    
    
    
    1.5
    
    
    
    (0.3
    )Foreign operations
    
    
    (3.4
    )
    
    
    (1.7
    )
    
    
    (0.9
    )Other, net
    
    
    2.0
    
    
    
    1.8
    
    
    
    2.0Effective tax rate
    
    
    35.9
    %
    
    
    38.5
    %
    
    
    41.1
    %
   2011
    
    
    2010Deferred Tax
    
    
    Deferred Tax
    
    
    Deferred Tax
    
    
    Deferred TaxAssets
    
    
    Liabilities
    
    
    Assets
    
    
    LiabilitiesProperty, equipment,
leases and intangibles
    
    $
    205
    
    
    $
    1,970
    
    
    $
    306
    
    
    $
    1,577Employee benefits
    
    
    450
    
    
    
    33
    
    
    
    413
    
    
    
    35Self-insurance accruals
    
    
    300
    
    
    
    
    
    
    
    309
    
    
    
    Other
    
    
    305
    
    
    
    877
    
    
    
    311
    
    
    
    877Net operating loss/credit
carryforwards
    
    
    115
    
    
    
    
    
    
    
    94
    
    
    
    Valuation allowances
    
    
    (91
    )
    
    
    
    
    
    
    (84
    )
    
    
    $
    1,284
    
    
    $
    2,880
    
    
    $
    1,349
    
    
    $
    2,489
  2011
    
    
    2010Current deferred tax asset
    
    $
    398
    
    
    $
    360Noncurrent deferred tax liability
    
    
    (1,994
    )
    
    
    (1,500
    )$
    (1,596
    )
    
    $
    (1,140
    )
    -50-




---



##### Table of Contents



2011
    
    
    2010
    
    
    2009Balance at beginning of year
    
    $
    59
    
    
    $
    52
    
    
    $
    73Increases for tax positions taken in the current year
    
    
    1
    
    
    
    3
    
    
    
    1Increases for tax positions taken in prior years
    
    
    6
    
    
    
    8
    
    
    
    5Decreases for tax positions taken in prior years
    
    
    (3
    )
    
    
    (3
    )
    
    
    (24
    )Settlements
    
    
    (7
    )
    
    
    (1
    )
    
    
    (3
    )Balance at end of year
    
    $
    56
    
    
    $
    59
    
    
    $
    52
    RETIREMENT PLANS SPONSORED BY FEDEX
   -51-




---



##### Table of Contents



2011
    
    
    2010
    
    
    2009Pension plans sponsored by FedEx
    
    $
    322
    
    
    $
    158
    
    
    $
    48Other U.S. domestic and international pension plans
    
    
    45
    
    
    
    41
    
    
    
    36U.S. domestic and international defined
contribution plans
    
    
    178
    
    
    
    110
    
    
    
    161Postretirement healthcare plans
    
    
    49
    
    
    
    35
    
    
    
    47$
    594
    
    
    $
    344
    
    
    $
    292
 PENSION PLANS.
 PENSION PLAN ASSUMPTIONS.
  Pension Plans2011
    
    
    2010
    
    
    2009Discount rate used to determine benefit obligation
    
    
    5.76
    %
    
    
    6.37
    %
    
    
    7.68
    %Discount rate used to determine net periodic benefit cost
    
    
    6.37
    
    
    
    7.68
    
    
    
    7.15Rate of increase in future compensation levels
used to determine benefit obligation
    
    
    4.58
    
    
    
    4.63
    
    
    
    4.42Rate of increase in future compensation levels
used to determine net periodic benefit cost
    
    
    4.63
    
    
    
    4.42
    
    
    
    4.49Expected long-term rate of return on assets
    
    
    8.00
    
    
    
    8.00
    
    
    
    8.50
   -52-




---



##### Table of Contents



May 31,2011
    
    
    2010Projected benefit obligation (PBO)
    
    $
    16,032
    
    
    $
    13,331Fair value of plan assets
    
    
    15,152
    
    
    
    12,790Funded status
    
    $
    (880
    )
    
    $
    (541
    )
  DEFINED CONTRIBUTION PLANS
 FEDEX EXPRESS SPONSORED RETIREMENT PLANS
 PENSION PLANS.
 POSTRETIREMENT HEALTHCARE PLANS
 RECENT ACCOUNTING GUIDANCE.
  -53-




---



##### Table of Contents



Pension Plans
    
    
    Postretirement Healthcare Plans2011
    
    
    2010
    
    
    2011
    
    
    2010Accumulated Benefit Obligation (ABO)
    
    $
    460
    
    
    $
    397Changes in Projected Benefit Obligation (PBO) and
Accumulated Postretirement Benefit Obligation (APBO)PBO/APBO at the beginning of year
    
    $
    513
    
    
    $
    416
    
    
    $
    469
    
    
    $
    365Service cost
    
    
    29
    
    
    
    22
    
    
    
    25
    
    
    
    19Interest cost
    
    
    26
    
    
    
    23
    
    
    
    28
    
    
    
    26Actuarial
(gain) loss
    
    
    (12
    )
    
    
    88
    
    
    
    37
    
    
    
    82Benefits paid
    
    
    (14
    )
    
    
    (14
    )
    
    
    (47
    )
    
    
    (44
    )Amendments
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    Participant contributions
    
    
    3
    
    
    
    3
    
    
    
    21
    
    
    
    21Other
    
    
    57
    
    
    
    (26
    )
    
    
    
    
    
    
    PBO/APBO at the end of year
    
    $
    602
    
    
    $
    513
    
    
    $
    533
    
    
    $
    469Change in Plan AssetsFair value of plan assets at the beginning of year
    
    $
    237
    
    
    $
    204
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    31
    
    
    
    37
    
    
    
    
    
    
    
    Company contributions
    
    
    35
    
    
    
    30
    
    
    
    26
    
    
    
    23Benefits paid
    
    
    (14
    )
    
    
    (14
    )
    
    
    (47
    )
    
    
    (44
    )Other
    
    
    31
    
    
    
    (20
    )
    
    
    21
    
    
    
    21Fair value of plan assets at the end of year
    
    $
    320
    
    
    $
    237
    
    
    $
    
    
    
    $
    Funded Status of the Plans
    
    $
    (282
    )
    
    $
    (276
    )
    
    $
    (533
    )
    
    $
    (469
    )Amount Recognized in the Balance Sheet at May 31:Current pension, postretirement healthcare and other
benefit obligations
    
    $
    (8
    )
    
    $
    (7
    )
    
    $
    (27
    )
    
    $
    (25
    )Noncurrent pension, postretirement healthcare and other
benefit obligations
    
    
    (274
    )
    
    
    (269
    )
    
    
    (506
    )
    
    
    (444
    )Net amount recognized
    
    $
    (282
    )
    
    $
    (276
    )
    
    $
    (533
    )
    
    $
    (469
    )Amounts Recognized in AOCI and not yet reflected in
Net Periodic Benefit Cost:Net actuarial loss (gain)
    
    $
    101
    
    
    $
    119
    
    
    $
    (76
    )
    
    $
    (117
    )Prior service cost and other
    
    
    2
    
    
    
    3
    
    
    
    2
    
    
    
    2Total
    
    $
    103
    
    
    $
    122
    
    
    $
    (74
    )
    
    $
    (115
    )Amounts Recognized in AOCI and not yet reflected in
Net Periodic Benefit Cost expected to be amortized in
next years Net Periodic Benefit Cost:Net actuarial loss (gain)
    
    $
    4
    
    
    $
    6
    
    
    $
    (1
    )
    
    $
    (4
    )Prior service cost and other
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    Total
    
    $
    5
    
    
    $
    7
    
    
    $
    (1
    )
    
    $
    (4
    )
  -54-




---



##### Table of Contents



PBO Exceeds the Fair Value ofPlan Assets2011
    
    
    2010Pension BenefitsFair value of plan assets
    
    $
    297
    
    
    $
    237PBO
    
    
    (579
    )
    
    
    (513
    )Net funded status
    
    $
    (282
    )
    
    $
    (276
    )
 ABO Exceeds the FairValue ofPlan Assets2011
    
    
    2010Pension BenefitsABO(1)
    
    $
    188
    
    
    $
    372Fair value of plan assets
    
    
    20
    
    
    
    208PBO
    
    
    (248
    )
    
    
    (474
    )Net funded status
    
    $
    (228
    )
    
    $
    (266
    )
 (1)
    
    ABO not used in determination of funded status.  Pension Plans
    
    
    Postretirement Healthcare Plans2011
    
    
    2010
    
    
    2009
    
    
    2011
    
    
    2010
    
    
    2009Service cost
    
    $
    29
    
    
    $
    22
    
    
    $
    22
    
    
    $
    25
    
    
    $
    19
    
    
    $
    25Interest cost
    
    
    26
    
    
    
    24
    
    
    
    21
    
    
    
    28
    
    
    
    26
    
    
    
    28Expected return on plan assets
    
    
    (17
    )
    
    
    (14
    )
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial losses (gains) and other
    
    
    7
    
    
    
    9
    
    
    
    7
    
    
    
    (4
    )
    
    
    (10
    )
    
    
    (6
    )Net periodic benefit cost
    
    $
    45
    
    
    $
    41
    
    
    $
    36
    
    
    $
    49
    
    
    $
    35
    
    
    $
    47
  2011
    
    
    2010Postretirement
    
    
    
    
    
    
    
    
    
    
    PostretirementPension Plans
    
    
    Healthcare Plans
    
    
    Pension Plans
    
    
    Healthcare PlansGross
    
    
    Net of Tax
    
    
    Gross
    
    
    Net of Tax
    
    
    Gross
    
    
    Net of Tax
    
    
    Gross
    
    
    Net of TaxAmount
    
    
    Amount
    
    
    Amount
    
    
    Amount
    
    
    Amount
    
    
    Amount
    
    
    Amount
    
    
    AmountNet (gain) loss and other
arising during period
    
    $
    (26
    )
    
    $
    (17
    )
    
    $
    42
    
    
    $
    25
    
    
    $
    59
    
    
    $
    39
    
    
    $
    101
    
    
    $
    59Amortizations:Actuarial (losses) gains
and other
    
    
    (7
    )
    
    
    (5
    )
    
    
    4
    
    
    
    4
    
    
    
    (4
    )
    
    
    (3
    )
    
    
    11
    
    
    
    11Total recognized in OCI
    
    $
    (33
    )
    
    $
    (22
    )
    
    $
    46
    
    
    $
    29
    
    
    $
    55
    
    
    $
    36
    
    
    $
    112
    
    
    $
    70
  -55-




---



##### Table of Contents



Pension Plans
    
    
    Postretirement Healthcare Plans2011
    
    
    2010
    
    
    2009
    
    
    2011
    
    
    2010
    
    
    2009Discount rate used to determine benefit obligation
    
    
    4.79
    %
    
    
    4.76
    %
    
    
    5.70
    %
    
    
    5.67
    %
    
    
    6.11
    %
    
    
    7.27
    %Discount rate used to determine net periodic benefit cost
    
    
    4.76
    
    
    
    5.70
    
    
    
    5.16
    
    
    
    6.11
    
    
    
    7.27
    
    
    
    7.13Rate of increase in future compensation levels
used to determine benefit obligation
    
    
    4.02
    
    
    
    4.08
    
    
    
    3.86
    
    
    
    
    
    
    
    
    
    
    
    Rate of increase in future compensation levels
used to determine net periodic benefit cost
    
    
    4.08
    
    
    
    3.86
    
    
    
    4.59
    
    
    
    
    
    
    
    
    
    
    
    Expected long-term rate of return on assets
    
    
    6.45
    
    
    
    6.64
    
    
    
    7.16
    
    
    
    
    
    
    
    
    
    
    
    
  PostretirementPension Plans
    
    
    Healthcare Plans2012
    
    $
    16
    
    
    $
    272013
    
    
    18
    
    
    
    272014
    
    
    18
    
    
    
    282015
    
    
    19
    
    
    
    292016
    
    
    20
    
    
    
    3120172021
    
    
    130
    
    
    
    187
      -56-




---



##### Table of Contents



2011
    
    
    2010
    
    
    2009REVENUE BY SERVICE TYPEPackage:U.S. overnight box
    
    $
    6,128
    
    
    $
    5,602
    
    
    $
    6,074U.S. overnight envelope
    
    
    1,736
    
    
    
    1,640
    
    
    
    1,855U.S. deferred
    
    
    2,805
    
    
    
    2,589
    
    
    
    2,789Total domestic package revenue
    
    
    10,669
    
    
    
    9,831
    
    
    
    10,718International Priority (IP)
    
    
    8,228
    
    
    
    7,087
    
    
    
    6,978International domestic(1)
    
    
    653
    
    
    
    578
    
    
    
    565Total package revenue
    
    
    19,550
    
    
    
    17,496
    
    
    
    18,261Freight:U.S.
    
    
    2,188
    
    
    
    1,980
    
    
    
    2,165International priority
    
    
    1,722
    
    
    
    1,303
    
    
    
    1,104International airfreight
    
    
    283
    
    
    
    251
    
    
    
    369Total freight revenue
    
    
    4,193
    
    
    
    3,534
    
    
    
    3,638Other
    
    
    247
    
    
    
    213
    
    
    
    268$
    23,990
    
    
    $
    21,243
    
    
    $
    22,167GEOGRAPHICAL INFORMATION(2)Revenues:U.S.
    
    $
    12,890
    
    
    $
    11,830
    
    
    $
    12,903International
    
    
    11,100
    
    
    
    9,413
    
    
    
    9,264$
    23,990
    
    
    $
    21,243
    
    
    $
    22,167Noncurrent assets:U.S.
    
    $
    10,807
    
    
    $
    9,564
    
    
    $
    8,756International
    
    
    1,806
    
    
    
    1,471
    
    
    
    1,456$
    12,613
    
    
    $
    11,035
    
    
    $
    10,212
 (1)
    
    International domestic revenues include our international intra-country domestic
operations.(2)
    
    International revenue includes shipments that either originate in or are destined to
locations outside the United
States. Noncurrent assets include property and equipment, goodwill
and other long-term assets. Our flight equipment registered in the
U.S. is included as U.S. assets; however, many of our aircraft operate
internationally.  -57-




---



##### Table of Contents



2011
    
    
    2010
    
    
    2009Cash payments for:Interest (net of capitalized interest)
    
    $
    
    
    
    $
    
    
    
    $
    5Income taxes
    
    $
    351
    
    
    $
    250
    
    
    $
    421Income tax refunds received
    
    
    (352
    )
    
    
    (207
    )
    
    
    (313
    )Cash tax payments, net
    
    $
    (1
    )
    
    $
    43
    
    
    $
    108
      -58-




---



##### Table of Contents



Aircraft andAircraft-Related
    
    
    Other(1)
    
    
    Total2012
    
    $
    1,480
    
    
    $
    17
    
    
    $
    1,4972013
    
    
    1,086
    
    
    
    12
    
    
    
    1,0982014
    
    
    781
    
    
    
    16
    
    
    
    7972015
    
    
    569
    
    
    
    8
    
    
    
    5772016
    
    
    584
    
    
    
    8
    
    
    
    592Thereafter
    
    
    1,470
    
    
    
    106
    
    
    
    1,576
 (1)
    
    Primarily advertising and promotions contracts.   B757
    
    
    B777F
    
    
    Total2012
    
    
    16
    
    
    
    7
    
    
    
    232013
    
    
    4
    
    
    
    6
    
    
    
    102014
    
    
    
    
    
    
    7
    
    
    
    72015
    
    
    
    
    
    
    3
    
    
    
    32016
    
    
    
    
    
    
    3
    
    
    
    3Thereafter
    
    
    
    
    
    
    7
    
    
    
    7Total
    
    
    20
    
    
    
    33
    
    
    
    53
  Wage-and-Hour.
  -59-




---



##### Table of Contents



Bibo v. FedEx Express Foster Foster
 ATA Airlines.
 California Paystub Class Action.
 Other.
     -60-




---



##### Table of Contents



First
    
    
    Second
    
    
    Third
    
    
    Fourth(in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter2011Revenues
    
    $
    5,769
    
    
    
    5,841
    
    
    $
    5,914
    
    
    $
    6,466Operating income
    
    
    351
    
    
    
    255
    
    
    
    176
    
    
    
    424Net income
    
    
    212
    
    
    
    152
    
    
    
    100
    
    
    
    2672010Revenues
    
    $
    4,882
    
    
    
    5,235
    
    
    $
    5,365
    
    
    $
    5,761Operating income
    
    
    100
    
    
    
    344
    
    
    
    270
    
    
    
    412Net income
    
    
    50
    
    
    
    201
    
    
    
    153
    
    
    
    247
  -61-




---



##### Table of Contents



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 INTEREST RATES.
  FOREIGN CURRENCY.
 COMMODITY.
  OTHER.
  -62-




---



##### Table of Contents



/s/ Ernst & Young LLP
 
  -63-




---



##### Table of Contents



ADDITIONSBALANCE
    
    
    
    
    
    
    CHARGED
    
    
    
    
    
    
    BALANCEAT
    
    
    CHARGED
    
    
    TO
    
    
    
    
    
    
    ATBEGINNING
    
    
    TO
    
    
    OTHER
    
    
    
    
    
    
    END OFDESCRIPTION
    
    OF YEAR
    
    
    EXPENSES
    
    
    ACCOUNTS
    
    
    DEDUCTIONS
    
    
    YEARAccounts Receivable Reserves:Allowance for Doubtful Accounts2011
    
    $
    34
    
    
    $
    117
    
    
    $
    
    
    
    $
    114
    (a)
    
    $
    372010
    
    
    43
    
    
    
    75
    
    
    
    
    
    
    
    84
    (a)
    
    
    342009
    
    
    27
    
    
    
    116
    
    
    
    
    
    
    
    100
    (a)
    
    
    43Allowance for Revenue
Adjustments2011
    
    $
    37
    
    
    $
    
    
    
    $
    367
    (b)
    
    $
    358
    (c)
    
    $
    462010
    
    
    37
    
    
    
    
    
    
    
    291
    (b)
    
    
    291
    (c)
    
    
    372009
    
    
    42
    
    
    
    
    
    
    
    311
    (b)
    
    
    316
    (c)
    
    
    37Inventory Valuation
Allowance:2011
    
    $
    170
    
    
    $
    12
    
    
    $
    
    
    
    $
    13
    
    
    $
    1692010
    
    
    175
    
    
    
    12
    
    
    
    
    
    
    
    17
    
    
    
    1702009
    
    
    163
    
    
    
    15
    
    
    
    
    
    
    
    3
    
    
    
    175
 (a)
    
    Uncollectible accounts written off, net of recoveries.(b)
    
    Principally charged against revenue.(c)
    
    Service failures, rebills and other.  -64-




---



##### Table of Contents



Year Ended May 31,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Earnings:Income before income taxes
    
    $
    1,140
    
    
    $
    1,059
    
    
    $
    732
    
    
    $
    1,846
    
    
    $
    1,984Add back:Interest expense, net of capitalized interest
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    19
    
    
    
    40Portion of rent expense representative of
interest factor
    
    
    611
    
    
    
    572
    
    
    
    576
    
    
    
    587
    
    
    
    580Earnings as adjusted
    
    $
    1,751
    
    
    $
    1,631
    
    
    $
    1,312
    
    
    $
    2,452
    
    
    $
    2,604Fixed Charges:Interest expense, net of capitalized interest
    
    $
    
    
    
    $
    
    
    
    $
    4
    
    
    $
    19
    
    
    $
    40Capitalized interest
    
    
    61
    
    
    
    65
    
    
    
    58
    
    
    
    46
    
    
    
    32Portion of rent expense representative of
interest factor
    
    
    611
    
    
    
    572
    
    
    
    576
    
    
    
    587
    
    
    
    580$
    672
    
    
    $
    637
    
    
    $
    638
    
    
    $
    652
    
    
    $
    652Ratio of Earnings to Fixed Charges
    
    
    2.6
    
    
    
    2.6
    
    
    
    2.1
    
    
    
    3.8
    
    
    
    4.0
  -65-




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of ExhibitCertificate of Incorporation and Bylaws3.1
    
    
    Restated Certificate of Incorporation of FedEx Express, as amended. (Filed as
Exhibit 3.1 to FedEx Expresss FY98 Third Quarter Report on Form 10-Q, and
incorporated herein by reference.)3.2
    
    
    By-laws of FedEx Express. (Filed as Exhibit 3.2 to FedEx Expresss FY93 Annual
Report on Form 10-K, and incorporated herein by reference.)Facility Lease Agreements10.1
    
    
    Composite Lease Agreement dated May 21, 2007 (but effective as of January 1, 2007)
between the Memphis-Shelby County Airport Authority (the Authority) and FedEx
Express. (Filed as Exhibit 10.1 to FedExs FY07 Annual Report on Form 10-K, and
incorporated herein by reference.)10.2
    
    
    First Amendment dated December 29, 2009 (but effective as of September 1, 2008) to
the Composite Lease Agreement dated May 21, 2007 (but effective as of January 1,
2007) between the Authority and FedEx Express. (Filed as Exhibit 10.1 to FedExs
FY10 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)10.3
    
    
    Second Amendment dated March 30, 2010 (but effective as of June 1, 2009) and Third
Amendment dated April 27, 2010 (but effective as of July 1, 2009), each amending
the Composite Lease Agreement dated May 21, 2007 (but effective as of January 1,
2007) between the Authority and FedEx Express. (Filed as Exhibit 10.3 to FedExs
FY10 Annual Report on Form 10-K, and incorporated herein by reference.)10.4
    
    
    Special Facility Lease Agreement dated as of August 1, 1979 between the Authority
and FedEx Express. (Filed as Exhibit 10.15 to FedEx Expresss FY90 Annual Report
on Form 10-K, and incorporated herein by reference.)10.5
    
    
    First Special Facility Supplemental Lease Agreement dated as of May 1, 1982 between
the Authority and FedEx Express. (Filed as Exhibit 10.25 to FedEx Expresss FY93
Annual Report on Form 10-K, and incorporated herein by reference.)10.6
    
    
    Second Special Facility Supplemental Lease Agreement dated as of November 1, 1982
between the Authority and FedEx Express. (Filed as Exhibit 10.26 to FedEx
Expresss FY93 Annual Report on Form 10-K, and incorporated herein by reference.)10.7
    
    
    Third Special Facility Supplemental Lease Agreement dated as of December 1, 1984
between the Authority and FedEx Express. (Filed as Exhibit 10.25 to FedEx
Expresss FY95 Annual Report on Form 10-K, and incorporated herein by reference.)10.8
    
    
    Fourth Special Facility Supplemental Lease Agreement dated as of July 1, 1992
between the Authority and FedEx Express. (Filed as Exhibit 10.20 to FedEx
Expresss FY92 Annual Report on Form 10-K, and incorporated herein by reference.)
  E-1




---



##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.9
    
    
    Fifth Special Facility Supplemental Lease Agreement dated as of July 1, 1997
between the Authority and FedEx Express. (Filed as Exhibit 10.35 to FedEx
Expresss FY97 Annual Report on Form 10-K, and incorporated herein by reference.)10.10
    
    
    Sixth Special Facility Supplemental Lease Agreement dated as of December 1, 2001
between the Authority and FedEx Express. (Filed as Exhibit 10.28 to FedExs FY02
Annual Report on Form 10-K, and incorporated herein by reference.)10.11
    
    
    Seventh Special Facility Supplemental Lease Agreement dated as of June 1, 2002
between the Authority and FedEx Express. (Filed as Exhibit 10.3 to FedExs FY03
First Quarter Report on Form 10-Q, and incorporated herein by reference.)10.12
    
    
    Special Facility Lease Agreement dated as of July 1, 1993 between the Authority and
FedEx Express. (Filed as Exhibit 10.29 to FedEx Expresss FY93 Annual Report on
Form 10-K, and incorporated herein by reference.)10.13
    
    
    Special Facility Ground Lease Agreement dated as of July 1, 1993 between the
Authority and FedEx Express. (Filed as Exhibit 10.30 to FedEx Expresss FY93
Annual Report on Form 10-K, and incorporated herein by reference.)10.14
    
    
    First Amendment dated December 29, 2009 (but effective as of September 1, 2008) to
the Special Facility Ground Lease Agreement dated as of July 1, 1993 between the
Authority and FedEx Express. (Filed as Exhibit 10.2 to FedExs FY10 Third Quarter
Report on Form 10-Q, and incorporated herein by reference.)Aircraft-Related Agreement10.15
    
    
    Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006 between The
Boeing Company and FedEx Express. Confidential treatment has been granted for
confidential commercial and financial information, pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to FedExs
FY07 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)10.16
    
    
    Supplemental Agreement No. 1 dated as of June 16, 2008 to the Boeing 777 Freighter
Purchase Agreement dated as of November 7, 2006 between The Boeing Company and
FedEx Express. (Filed as Exhibit 10.13 to FedExs FY08 Annual Report on Form 10-K,
and incorporated herein by reference.)10.17
    
    
    Supplemental Agreement No. 2 dated as of July 14, 2008 to the Boeing 777 Freighter
Purchase Agreement dated as of November 7, 2006 between The Boeing Company and
FedEx Express. (Filed as Exhibit 10.3 to FedExs FY09 Second Quarter Report on
Form 10-Q, and incorporated herein by reference.)10.18
    
    
    Supplemental Agreement No. 3 dated as of December 15, 2008 (and related side
letters) to the Boeing 777 Freighter Purchase Agreement dated as of November 7,
2006 between The Boeing Company and FedEx Express. Confidential treatment has been
granted for confidential commercial and financial information, pursuant to Rule
24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit
10.4 to FedExs FY09 Second Quarter Report on Form 10-Q, and incorporated herein by
reference.)
  E-2




---



##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.19
    
    
    Supplemental Agreement No. 4 dated as of January 9, 2009 (and related side letters)
to the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006 between
The Boeing Company and FedEx Express. Confidential treatment has been granted for
confidential commercial and financial information, pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to FedExs
FY09 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)10.20
    
    
    Side letters dated May 29, 2009 and May 19, 2009, amending the Boeing 777 Freighter
Purchase Agreement dated as of November 7, 2006 between The Boeing Company and
FedEx Express. Confidential treatment has been requested for confidential
commercial and financial information, pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. (Filed as Exhibit 10.17 to FedExs FY09 Annual
Report on Form 10-K, and incorporated herein by reference.)10.21
    
    
    Supplemental Agreement No. 5 dated as of January 11, 2010 to the Boeing 777
Freighter Purchase Agreement dated as of November 7, 2006 between The Boeing
Company and FedEx Express. Confidential treatment has been granted for
confidential commercial and financial information, pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.3 to FedExs
FY10 Third Quarter Report on Form 10-Q, and incorporated herein by reference.)10.22
    
    
    Supplemental Agreement No. 6 dated as of March 17, 2010, Supplemental Agreement No.
7 dated as of March 17, 2010, and Supplemental Agreement No. 8 (and related side
letters) dated as of April 30, 2010, each amending the Boeing Company 777 Freighter
Purchase Agreement dated as November 7, 2006 between The Boeing Company and FedEx
Express. Confidential treatment has been requested for confidential commercial and
financial information, pursuant to Rule 24b-2 under the Securities Exchange Act of
1934, as amended. (Filed as Exhibit 10.22 to FedExs FY10 Annual Report on Form
10-K, and incorporated herein by reference.)10.23
    
    
    Supplemental Agreement No. 9 dated as of June 18, 2010, Supplemental Agreement No.
10 dated as of June 18, 2010, Supplemental Agreement No. 11 (and related side
letter) dated as of August 19, 2010, and Supplemental Agreement No. 13 (and related
side letter) dated as of August 27, 2010, each amending the Boeing 777 Freighter
Purchase Agreement dated as of November 7, 2006 between The Boeing Company and
FedEx Express. Confidential treatment has been granted for confidential commercial
and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended. (Filed as Exhibit 10.1 to FedExs FY11 First Quarter Report
on Form 10-Q, and incorporated herein by reference.)10.24
    
    
    Supplemental Agreement No. 12 (and related side letter) dated as of September 3,
2010, Supplemental Agreement No. 14 (and related side letter) dated as of October
25, 2010, and Supplemental Agreement No. 15 (and related side letter) dated as of
October 29, 2010, each amending the Boeing 777 Freighter Purchase Agreement dated
as of November 7, 2006 between The Boeing Company and FedEx Express. Confidential
treatment has been granted for confidential commercial and financial information,
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
(Filed as Exhibit 10.2 to FedExs FY11 Second Quarter Report on Form 10-Q, and
incorporated herein by reference.)
  E-3




---



##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.25
    
    
    Supplemental Agreement No. 16 (and related side letters) dated as of January 31,
2011, and Supplemental Agreement No. 17 dated as of February 14, 2011, each
amending the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006
between The Boeing Company and FedEx Express. Confidential treatment has been
granted for confidential commercial and financial information, pursuant to Rule
24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit
10.1 to FedExs FY11 Third Quarter Report on Form 10-Q, and incorporated herein by
reference.)10.26
    
    
    Supplemental Agreement No. 18 (and related side letter) dated as of March 30, 2011
to the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006 between
The Boeing Company and FedEx Express. Confidential treatment has been requested
for confidential commercial and financial information, pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.26 to
FedExs FY11 Annual Report on Form 10-K, and incorporated herein by reference.)U.S. Postal Service Agreement10.27
    
    
    Transportation Agreement dated July 31, 2006 between the United States Postal
Service and FedEx Express. Confidential treatment has been granted for
confidential commercial and financial information, pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.2 to FedExs
FY07 First Quarter Report on Form 10-Q, and incorporated herein by reference.)10.28
    
    
    Amendment dated November 30, 2006 to the Transportation Agreement dated July 31,
2006 between the United States Postal Service and FedEx Express. Confidential
treatment has been granted for confidential commercial and financial information,
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
(Filed as Exhibit 10.2 to FedExs FY07 Second Quarter Report on Form 10-Q, and
incorporated herein by reference.)10.29
    
    
    Letter Agreement dated March 8, 2007 and Letter Agreement dated May 14, 2007, each
amending the Transportation Agreement dated July 31, 2006 between the
United States Postal Service and FedEx Express. Confidential treatment has been
granted for confidential commercial and financial information, pursuant to Rule
24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as Exhibit
10.15 to FedExs FY07 Annual Report on Form 10-K, and incorporated herein by
reference.)10.30
    
    
    Amendment dated June 20, 2007 and Amendment dated July 31, 2007, each amending the
Transportation Agreement dated July 31, 2006 between the United States
Postal Service and FedEx Express. Confidential treatment has been granted for
confidential commercial and financial information, pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to FedExs
FY08 First Quarter Report on Form 10-Q, and incorporated herein by reference.)10.31
    
    
    Amendment dated December 4, 2007 to the Transportation Agreement dated July 31,
2006 between the United States Postal Service and FedEx Express.
Confidential treatment has been granted for confidential commercial and financial
information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended. (Filed as Exhibit 10.1 to FedExs FY08 Third Quarter Report on Form 10-Q,
and incorporated herein by reference.)
  E-4




---



##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.32
    
    
    Letter Agreement dated October 23, 2008 and Amendment dated October 23, 2008, each
amending the Transportation Agreement dated July 31, 2006 between the United States
Postal Service and FedEx Express. Confidential treatment has been granted for
confidential commercial and financial information, pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to FedExs
FY09 Second Quarter Report on Form 10-Q, and incorporated herein by reference.)10.33
    
    
    Letter Agreement dated March 4, 2009, amending the Transportation Agreement dated
July 31, 2006 between the United States Postal Service and FedEx Express. (Filed
as Exhibit 10.24 to FedExs FY09 Annual Report on Form 10-K, and incorporated
herein by reference.)10.34
    
    
    Letter Agreement dated September 29, 2009, amending the Transportation Agreement
dated July 31, 2006 between the United States Postal Service and FedEx Express.
Confidential treatment has been granted for confidential commercial and financial
information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended. (Filed as Exhibit 10.1 to FedExs FY10 Second Quarter Report on Form
10-Q, and incorporated herein by reference.)10.35
    
    
    Amendment dated December 8, 2009 to the Transportation Agreement dated July 31, 2006
between the United States Postal Services and FedEx Express. Confidential
treatment has been granted for confidential commercial and financial information,
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
(Filed as Exhibit 10.4 to FedExs FY10 Third Quarter Report on Form 10-Q, and
incorporated herein by reference.)10.36
    
    
    Letter Agreement dated August 30, 2010, amending the Transportation Agreement dated
July 31, 2006 between the United States Postal Service and FedEx Express.
Confidential treatment has been granted for confidential commercial and financial
information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended. (Filed as Exhibit 10.2 to FedExs FY11 First Quarter Report on Form 10-Q,
and incorporated herein by reference.)10.37
    
    
    Amendment dated November 22, 2010 to the Transportation Agreement dated July 31,
2006 between the United States Postal Service and FedEx Express. Confidential
treatment has been granted for confidential commercial and financial information,
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
(Filed as Exhibit 10.3 to FedExs FY11 Second Quarter Report on Form 10-Q, and
incorporated herein by reference.)
  E-5




---



##### Table of Contents



ExhibitNumber
    
    Description of ExhibitFinancing Agreement10.38
    
    
    Five-Year Credit Agreement dated as of April 26, 2011 among FedEx,
JPMorgan Chase Bank, N.A., individually and as administrative agent,
and certain lenders. (Filed as Exhibit 99.1 to FedExs Current
Report on Form 8-K dated April 26, 2011, and incorporated herein by
reference.)FedEx Express is not filing any other instruments evidencing any
indebtedness because the total amount of securities authorized under
any single such instrument does not exceed 10% of the total assets
of FedEx Express and its subsidiaries on a consolidated basis.
Copies of such instruments will be furnished to the Securities and
Exchange Commission upon request.Other Exhibits*12
    
    
    Statement re Computation of Ratio of Earnings to Fixed Charges (presented
on page 65 of this Annual Report on Form 10-K).*23
    
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.*24
    
    
    Powers of Attorney.*31.1
    
    
    Certification of Principal Executive Officer Pursuant to Rules 13a-14(a)
and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    
    Certification of Principal Financial Officer Pursuant to Rules 13a-14(a)
and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    
    Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    
    Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith  E-6