##### 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, 2009.
 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 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)3610 Hacks Cross Road, Memphis, Tennessee(Address of Principal Executive Offices)
    
    38125(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
 Yes o No 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)
 Yes
o No
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
    
    
    12ITEM 3. Legal Proceedings
    
    
    15ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    16PART IIITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    16ITEM 6. Selected Financial Data
    
    
    16ITEM 7. Managements Discussion and Analysis
of Results of Operations and Financial Condition
    
    
    16ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    16ITEM 8. Financial Statements and Supplementary Data
    
    
    16ITEM 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure
    
    
    17ITEM 9A. Controls and Procedures
    
    
    17ITEM 9B. Other Information
    
    
    17PART IIIITEM 10. Directors, Executive Officers and Corporate Governance
    
    
    17ITEM 11. Executive Compensation
    
    
    17ITEM 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    17ITEM 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    18ITEM 14. Principal Accounting Fees and Services
    
    
    18PART IVITEM 15. Exhibits, Financial Statement Schedules
    
    
    19FINANCIAL SECTIONTable of Contents
    
    
    22Managements Discussion and Analysis
    
    
    23Consolidated Financial Statements
    
    
    37Other Financial Information
    
    
    68EXHIBITSExhibit 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
  
    
    In 2009, we began operations at our new Asia-Pacific hub at the Guangzhou Baiyun
International Airport in Southern China. The new hub assumed and expanded the activities of
our previous hub in Subic Bay, Philippines. We believe the new hub will better serve our
global customers doing business in and with the China and Asia-Pacific markets.
 
    
    In 2007, we initiated time-certain domestic delivery service in China. Our China domestic
service is supported by a money-back guarantee and real-time package status tracking. Our
China domestic network relies on a hub-and-spoke system centered at the Hangzhou Xiaoshan
International Airport, located in East Chinas Zhejiang Province.
 
    
    In 2007, we acquired Tianjin Datian W. Group Co., Ltd.s (DTW Group) fifty percent share
of the FedEx-DTW International Priority express joint venture and assets relating to DTW
Groups domestic network in China. The acquisition converted our joint venture with DTW
Group, formed in 1999, into a wholly owned subsidiary. The acquisition increased our presence
in China in the international market and established our presence in the domestic market.
  
    
    Launched FedEx Express Nacional, a domestic next-business-day service in Mexico, in light
of projections of significant growth in Mexicos express shipping market in the next ten
years. The new service provides highly reliable and convenient express shipping solutions
across Mexico with the support of two new centers of operations that we opened in Toluca and
San Luis Potosi.
 
    
    Upgraded our international next-business-day delivery service, FedEx International
Priority, from Europe to major U.S. East Coast cities. The service enhancements provide our
European customers with overnight access to more ZIP codes in key markets along the U.S. East Coast, as well as
later pick-up times.
  4




---



##### Table of Contents



Technology
   fedex.com fedex.com fedex.com fedex.com
     5




---



##### Table of Contents



Marketing
  
    
    The National Football League (NFL), as its Official Delivery Service Sponsor
 
    
    FedExField, home of the NFLs Washington Redskins
 
    
    FedEx Orange Bowl, host of one of college footballs Bowl Championship Series games
 
    
    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
 
    
    FedExCup, a season-long points competition for PGA TOUR players
 
    
    Pebble Beach Golf Resorts, as the official shipping company
 
    
    National Basketball Association (NBA), as its official delivery service sponsor
 
    
    FedExForum, home of the NBAs Memphis Grizzlies
 
    
    Vodafone McLaren Mercedes Formula One team
 
    
    French Open tennis tournament
 U.S. Postal Service Agreement
  Pricing
   6




---



##### Table of Contents



fedex.com
 Operations
     Fuel Supplies and Costs
   Total Cost
    
    
    Percentage of TotalFiscal Year
    
    (in millions)
    
    
    Revenues2009
    
    $
    2,932
    
    
    
    13.2
    %2008
    
    
    3,396
    
    
    
    14.02007
    
    
    2,639
    
    
    
    11.72006
    
    
    2,497
    
    
    
    11.72005
    
    
    1,780
    
    
    
    9.2
  7




---



##### Table of Contents



Competition
   Employees
   Integration of CTS
  Trademarks
   8




---



##### Table of Contents



Regulation
 Air .
     Ground .
  International .
  9




---



##### Table of Contents



Communication .
 Environmental .
   Labor.
  10




---



##### Table of Contents



Form 10-K (Risk Factors).
 
 ITEM 1A. RISK FACTORS
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
   11




---



##### Table of Contents



ITEM 2. PROPERTIES
  Aircraft and Vehicles
  Maximum OperationalRevenue PayloadDescription
    
    Owned
    
    
    Leased
    
    
    Total
    
    

(Pounds per Aircraft) (1)Boeing MD11
    
    
    31
    
    
    
    26
    
    
    
    57
    
    
    
    164,200Boeing MD10-30 (2)
    
    
    10
    
    
    
    2
    
    
    
    12
    
    
    
    114,200Boeing DC10-30
    
    
    1
    
    
    
    5
    
    
    
    6
    (3)
    
    
    114,200Boeing MD10-10 (2)
    
    
    57
    
    
    
    
    
    
    
    57
    
    
    
    108,700Boeing DC10-10
    
    
    1
    
    
    
    
    
    
    
    1
    (4)
    
    
    108,700Airbus A300-600
    
    
    35
    
    
    
    36
    
    
    
    71
    (5)
    
    
    85,600Airbus A310-200/300
    
    
    40
    
    
    
    16
    
    
    
    56
    
    
    
    61,900Boeing B757-200
    
    
    24
    
    
    
    
    
    
    
    24
    (6)
    
    
    45,800Boeing B727-200
    
    
    77
    
    
    
    2
    
    
    
    79
    
    
    
    38,200ATR 72-202/212
    
    
    13
    
    
    
    
    
    
    
    13
    
    
    
    14,660ATR 42-300/320
    
    
    26
    
    
    
    
    
    
    
    26
    
    
    
    10,880Cessna 208B
    
    
    242
    
    
    
    
    
    
    
    242
    
    
    
    2,500Cessna 208A
    
    
    10
    
    
    
    
    
    
    
    10
    
    
    
    1,900Total
    
    
    567
    
    
    
    87
    
    
    
    654
 
 (1)
    
    Maximum operational revenue payload is the lesser of the net volume-limited payload and the
net maximum structural payload.(2)
    
    The MD10-30s and MD10-10s are DC10-30s and DC10-10s, respectively, that have been converted
to an MD10 configuration.(3)
    
    Includes three aircraft not currently in operation and awaiting conversion to MD10
configuration.(4)
    
    Not currently in operation and awaiting conversion to MD10 configuration.(5)
    
    Includes two aircraft not currently in operation and awaiting completion of
passenger-to-freighter modification.(6)
    
    Includes 14 aircraft not currently in operation and awaiting completion of
passenger-to-freighter modification. 
    
    The MD11s are three-engine, wide-bodied aircraft that have a longer range and larger
capacity than DC10s.
 
    
    The DC10s are three-engine, wide-bodied aircraft that have been specially modified to meet
our cargo requirements. We operate two models, the DC10-10 and the DC10-30. The DC10-30 has
a longer range and higher weight capacity than the DC10-10.
 
    
    The MD10s are three-engine, wide-bodied DC10 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 aircraft configured for cargo service.
 
    
    The B727s are three-engine 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.
  12




---



##### Table of Contents



Aircraft Purchase Commitments
  B757
    
    
    B777F*
    
    
    MD11
    
    
    Total2010
    
    
    12
    
    
    
    4
    
    
    
    2
    
    
    
    182011
    
    
    16
    
    
    
    4
    
    
    
    
    
    
    
    202012
    
    
    8
    
    
    
    3
    
    
    
    
    
    
    
    112013
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    32014
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Thereafter
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    13Total
    
    
    36
    
    
    
    30
    
    
    
    2
    
    
    
    68
 *
    
    Our obligation to purchase 15 of these aircraft is conditioned upon there being no event that
causes us or our employees not to be covered by the RLA.
   13




---



##### Table of Contents



Sorting and Handling Facilities
  Sorting
    
    
    
    
    LeaseSquare
    
    
    Capacity
    
    
    
    
    ExpirationLocation
    
    Acres
    
    
    Feet
    
    

(per hour) (1)
    
    
    Lessor
    
    YearNationalMemphis, Tennessee
    
    
    518
    
    
    
    3,450,000
    
    
    
    465,000
    
    
    Memphis-Shelby County Airport Authority
    
    
    2036Indianapolis, Indiana
    
    
    335
    
    
    
    2,509,000
    
    
    
    210,000
    
    
    Indianapolis Airport Authority
    
    
    2028RegionalFort Worth, Texas
    
    
    168
    
    
    
    948,000
    
    
    
    76,000
    
    
    Fort Worth Alliance Airport Authority
    
    
    2021Newark, New Jersey
    
    
    70
    
    
    
    595,000
    
    
    
    154,000
    
    
    Port Authority of New York and New Jersey
    
    
    2010Oakland, California
    
    
    75
    
    
    
    320,000
    
    
    
    65,000
    
    
    City of Oakland
    
    
    2031MetropolitanChicago, Illinois
    
    
    51
    
    
    
    419,000
    
    
    
    52,000
    
    
    City of Chicago
    
    
    2018Los Angeles, California
    
    
    34
    
    
    
    305,000
    
    
    
    57,000
    
    
    City of Los Angeles
    
    
    2010/2025
    (5)InternationalAnchorage, Alaska (2)
    
    
    64
    
    
    
    332,000
    
    
    
    24,000
    
    
    Alaska Department of Transportation and Public Facilities
    
    
    2023Paris, France (3)
    
    
    87
    
    
    
    861,000
    
    
    
    54,000
    
    
    Aeroports de Paris
    
    
    2029Guangzhou, China (4)
    
    
    155
    
    
    
    882,000
    
    
    
    24,000
    
    
    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 sorting and handling facility (23
acres) expires in 2010, and lease for ramp expansion (11 acres) expires in 2025. 
  14




---



##### Table of Contents



Administrative and Other Properties and Facilities
    
 ITEM 3. LEGAL PROCEEDINGS
    15




---



##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 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
   16




---



##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Managements Evaluation of Disclosure Controls and Procedures
  Assessment of Internal Control Over Financial Reporting
 Form 10-K.
 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
   17




---



##### Table of Contents



ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  2009
    
    
    2008Audit fees
    
    $
    7,927
    
    
    $
    7,848Audit-related fees
    
    
    586
    
    
    
    327Tax fees
    
    
    186
    
    
    
    172All other fees
    
    
    10
    
    
    
    9Total
    
    $
    8,709
    
    
    $
    8,356
 
    
    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 2009 and 2008 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
$111,000 in 2009 and $21,000 in 2008.
    
    All Other Fees.Represents fees for products and services not otherwise included in the
categories above. The amounts shown for 2009 and 2008 include fees for online technical
resources.
 http://ir.fedex.com/documentdisplay.cfm?DocumentID=122
    18




---



##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a)(1) and (2) Financial Statements; Financial Statement Schedules
  (a)(3) Exhibits
   19




---



##### Table of Contents



SIGNATURES
  FEDERAL EXPRESS CORPORATIONDated:  July 15, 2009
    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 15, 2009/s/ CATHY D. ROSS

Cathy D. Ross
    
    Senior Vice President and Chief
Financial Officer(Principal Financial Officer)
    
    July 15, 2009/s/ J. RICK BATEMAN

J. Rick Bateman
    
    Vice President and Worldwide
Controller(Principal Accounting Officer)
    
    July 15, 2009/s/ FREDERICK W. SMITH*

Frederick W. Smith
    
    Chairman of the Board of Directors
    
    July 15, 2009/s/ ROBERT B. CARTER*

Robert B. Carter
    
    Director
    
    July 15, 2009/s/ MICHAEL L. DUCKER*

Michael L. Ducker
    
    Executive Vice President and
President  International and
Director
    
    July 15, 2009/s/ T. MICHAEL GLENN*

T. Michael Glenn
    
    Director
    
    July 15, 2009/s/ ALAN B. GRAF, JR.*

Alan B. Graf, Jr.
    
    Director
    
    July 15, 2009
  20




---



##### Table of Contents



Signature
    
    Capacity
    
    Date/s/ WILLIAM J. LOGUE*
    
    Executive Vice President  U.S. Operations and
    
    July 15, 2009William J. Logue
    
    Systems Support and Director/s/ CHRISTINE P. RICHARDS*
    
    Director
    
    July 15, 2009Christine P. Richards*By:
    
    /s/ J. RICK BATEMAN

J. Rick Bateman
    
    
    
    July 15, 2009Attorney-in-Fact
  21




---



##### Table of Contents



FINANCIAL SECTION TABLE OF CONTENTS
 PAGEManagements Discussion and AnalysisOverview of Financial Section
    
    
    23Results of Operations
    
    
    25New Accounting Pronouncements
    
    
    31Risk Factors
    
    
    32Forward-Looking Statements
    
    
    36Consolidated Financial StatementsManagements Report on Internal Control over Financial Reporting
    
    
    37Reports of Independent Registered Public Accounting Firm
    
    
    38Consolidated
Balance Sheets 
May 31, 2009 and 2008
    
    
    40Consolidated Statements of Income 
Years Ended May 31, 2009, 2008 and 2007
    
    
    42Consolidated Statements of Cash Flows 
Years Ended May 31, 2009, 2008 and 2007
    
    
    43Consolidated Statements of Changes in Owners Equity and Comprehensive Income 
Years Ended May 31, 2009, 2008 and 2007
    
    
    44Notes to Consolidated Financial Statements
    
    
    45Other Financial InformationQuantitative and Qualitative Disclosures about Market Risk
    
    
    68Report of Independent Registered Public Accounting Firm
    
    
    69Schedule II  Valuation and Qualifying Accounts
    
    
    70Computation of Ratio of Earnings to Fixed Charges
    
    
    71
  22




---



##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
 OVERVIEW OF FINANCIAL SECTION
  DESCRIPTION OF BUSINESS
     
    
    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;
  23




---



##### Table of Contents




    
    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.
    24




---



##### Table of Contents



RESULTS OF OPERATIONS
  Percent Change2009
    
    
    2008
    
    
    2007
    
    
    2009/2008
    
    
    2008/2007Revenues:Package:U.S. overnight box
    
    $
    6,074
    
    
    $
    6,578
    
    
    $
    6,485
    
    
    
    (8
    )
    
    
    1U.S. overnight envelope
    
    
    1,855
    
    
    
    2,012
    
    
    
    1,990
    
    
    
    (8
    )
    
    
    1U.S. deferred
    
    
    2,789
    
    
    
    2,995
    
    
    
    2,883
    
    
    
    (7
    )
    
    
    4Total U.S. domestic package
revenue
    
    
    10,718
    
    
    
    11,585
    
    
    
    11,358
    
    
    
    (7
    )
    
    
    2International Priority (IP)
    
    
    6,978
    
    
    
    7,666
    
    
    
    6,722
    
    
    
    (9
    )
    
    
    14International domestic (1)
    
    
    565
    
    
    
    663
    
    
    
    370
    
    
    
    (15
    )
    
    
    79Total package revenue
    
    
    18,261
    
    
    
    19,914
    
    
    
    18,450
    
    
    
    (8
    )
    
    
    8Freight:U.S.
    
    
    2,165
    
    
    
    2,398
    
    
    
    2,412
    
    
    
    (10
    )
    
    
    (1
    )International Priority freight
    
    
    1,104
    
    
    
    1,243
    
    
    
    1,045
    
    
    
    (11
    )
    
    
    19International airfreight
    
    
    369
    
    
    
    406
    
    
    
    394
    
    
    
    (9
    )
    
    
    3Total freight revenue
    
    
    3,638
    
    
    
    4,047
    
    
    
    3,851
    
    
    
    (10
    )
    
    
    5Other
    
    
    268
    
    
    
    285
    
    
    
    226
    
    
    
    (6
    )
    
    
    26Total revenues
    
    
    22,167
    
    
    
    24,246
    
    
    
    22,527
    
    
    
    (9
    )
    
    
    8Operating expenses:Salaries and employee benefits
    
    
    8,031
    
    
    
    8,262
    
    
    
    8,051
    (3)
    
    
    (3
    )
    
    
    3Purchased transportation
    
    
    1,063
    
    
    
    1,194
    
    
    
    1,097
    
    
    
    (11
    )
    
    
    9Rentals and landing fees
    
    
    1,598
    
    
    
    1,658
    
    
    
    1,598
    
    
    
    (4
    )
    
    
    4Depreciation and amortization
    
    
    952
    
    
    
    933
    
    
    
    845
    
    
    
    2
    
    
    
    10Fuel
    
    
    3,281
    
    
    
    3,785
    
    
    
    2,946
    
    
    
    (13
    )
    
    
    28Maintenance and repairs
    
    
    1,348
    
    
    
    1,508
    
    
    
    1,440
    
    
    
    (11
    )
    
    
    5Impairment and other charges
    
    
    258
    (2)
    
    
    
    
    
    
    
    
    
    NM
    
    
    
    Intercompany charges
    
    
    2,093
    
    
    
    2,129
    
    
    
    2,076
    
    
    
    (2
    )
    
    
    3Other
    
    
    2,778
    
    
    
    2,920
    
    
    
    2,561
    
    
    
    (5
    )
    
    
    14Total operating expenses
    
    
    21,402
    
    
    
    22,389
    
    
    
    20,614
    
    
    
    (4
    )
    
    
    9Operating income
    
    $
    765
    
    
    $
    1,857
    
    
    $
    1,913
    
    
    
    (59
    )
    
    
    (3
    )Operating margin
    
    
    3.5
    %
    
    
    7.7
    %
    
    
    8.5
    %
    
    (420
    )bp
    
    (80
    )bpOther income (expense):Interest, net
    
    
    4
    
    
    
    152
    
    
    
    173
    
    
    
    (97
    )
    
    
    (12
    )Other, net
    
    
    (37
    )
    
    
    (163
    )
    
    
    (102
    )
    
    
    (77
    )
    
    
    60(33
    )
    
    
    (11
    )
    
    
    71
    
    
    
    200
    
    
    
    (115
    )Income before income taxes
    
    
    732
    
    
    
    1,846
    
    
    
    1,984
    
    
    
    (60
    )
    
    
    (7
    )Provision for income taxes
    
    
    301
    
    
    
    721
    
    
    
    733
    
    
    
    (58
    )
    
    
    (2
    )Net income
    
    $
    431
    
    
    $
    1,125
    
    
    $
    1,251
    
    
    
    (62
    )
    
    
    (10
    )
 (1)
    
    International domestic revenues include our international domestic operations,
primarily in the United Kingdom, Canada, China and India. We reclassified the prior period
international domestic revenues previously included within other revenues to conform to the
current period presentation.(2)
    
    Represents charges associated with aircraft-related asset impairments and other
charges primarily associated with aircraft-related lease and contract termination costs and
employee severance.(3)
    
    Includes a charge of $143 million for signing bonuses and other upfront
compensation associated with a four-year labor contract with our pilots.  25




---



##### Table of Contents



Percent Change2009
    
    
    2008
    
    
    2007
    
    
    2009/2008
    
    
    2008/2007Package StatisticsAverage daily package volume (ADV):U.S. overnight box
    
    
    1,127
    
    
    
    1,151
    
    
    
    1,174
    
    
    
    (2
    )
    
    
    (2
    )U.S. overnight envelope
    
    
    627
    
    
    
    677
    
    
    
    706
    
    
    
    (7
    )
    
    
    (4
    )U.S. deferred
    
    
    849
    
    
    
    895
    
    
    
    898
    
    
    
    (5
    )
    
    
    Total U.S. domestic ADV
    
    
    2,603
    
    
    
    2,723
    
    
    
    2,778
    
    
    
    (4
    )
    
    
    (2
    )IP
    
    
    475
    
    
    
    517
    
    
    
    487
    
    
    
    (8
    )
    
    
    6International domestic (1)
    
    
    298
    
    
    
    296
    
    
    
    134
    
    
    
    1
    
    
    
    121Total ADV
    
    
    3,376
    
    
    
    3,536
    
    
    
    3,399
    
    
    
    (5
    )
    
    
    4Revenue per package (yield):U.S. overnight box
    
    $
    21.21
    
    
    $
    22.40
    
    
    $
    21.66
    
    
    
    (5
    )
    
    
    3U.S. overnight envelope
    
    
    11.65
    
    
    
    11.66
    
    
    
    11.06
    
    
    
    
    
    
    
    5U.S. deferred
    
    
    12.94
    
    
    
    13.12
    
    
    
    12.59
    
    
    
    (1
    )
    
    
    4U.S. domestic composite
    
    
    16.21
    
    
    
    16.68
    
    
    
    16.04
    
    
    
    (3
    )
    
    
    4IP
    
    
    57.81
    
    
    
    58.11
    
    
    
    54.13
    
    
    
    (1
    )
    
    
    7International domestic (1)
    
    
    7.50
    
    
    
    8.80
    
    
    
    10.77
    
    
    
    (15
    )
    
    
    (18
    )Composite package yield
    
    
    21.30
    
    
    
    22.08
    
    
    
    21.28
    
    
    
    (4
    )
    
    
    4Freight StatisticsAverage daily freight pounds:U.S.
    
    
    7,287
    
    
    
    8,648
    
    
    
    9,569
    
    
    
    (16
    )
    
    
    (10
    )International Priority freight
    
    
    1,959
    
    
    
    2,220
    
    
    
    1,878
    
    
    
    (12
    )
    
    
    18International airfreight
    
    
    1,475
    
    
    
    1,817
    
    
    
    1,831
    
    
    
    (19
    )
    
    
    (1
    )Total average daily freight pounds
    
    
    10,721
    
    
    
    12,685
    
    
    
    13,278
    
    
    
    (15
    )
    
    
    (4
    )Revenue per pound (yield):U.S.
    
    $
    1.17
    
    
    $
    1.09
    
    
    $
    0.99
    
    
    
    7
    
    
    
    10International Priority freight
    
    
    2.22
    
    
    
    2.20
    
    
    
    2.18
    
    
    
    1
    
    
    
    1International airfreight
    
    
    0.99
    
    
    
    0.88
    
    
    
    0.84
    
    
    
    13
    
    
    
    5Composite freight yield
    
    
    1.34
    
    
    
    1.25
    
    
    
    1.14
    
    
    
    7
    
    
    
    10
 (1)
    
    International domestic statistics include our international domestic operations,
primarily in the United Kingdom, Canada, China and India. Revenues
    26




---



##### Table of Contents



2009
    
    
    2008
    
    
    2007U.S. Domestic and Outbound Fuel Surcharge:Low
    
    
    
    %
    
    
    13.50
    %
    
    
    8.50
    %High
    
    
    34.50
    
    
    
    25.00
    
    
    
    17.00Weighted-Average
    
    
    17.45
    
    
    
    17.06
    
    
    
    12.91International Fuel Surcharges:Low
    
    
    
    
    
    
    12.00
    
    
    
    8.50High
    
    
    34.50
    
    
    
    25.00
    
    
    
    17.00Weighted-Average
    
    
    16.75
    
    
    
    16.11
    
    
    
    12.98
  27




---



##### Table of Contents



Operating Income
  Percent of Revenue2009
    
    
    2008
    
    
    2007Operating expenses:Salaries and employee benefits
    
    
    36.2
    %
    
    
    34.1
    %
    
    
    35.7
    % (2)Purchased transportation
    
    
    4.8
    
    
    
    4.9
    
    
    
    4.9Rentals and landing fees
    
    
    7.2
    
    
    
    6.8
    
    
    
    7.1Depreciation and amortization
    
    
    4.3
    
    
    
    3.9
    
    
    
    3.7Fuel
    
    
    14.8
    
    
    
    15.6
    
    
    
    13.1Maintenance and repairs
    
    
    6.1
    
    
    
    6.2
    
    
    
    6.4Impairment and other charges
    
    
    1.2
    (1)
    
    
    
    
    
    
    Intercompany charges
    
    
    9.4
    
    
    
    8.8
    
    
    
    9.2Other
    
    
    12.5
    
    
    
    12.0
    
    
    
    11.4Total operating expenses
    
    
    96.5
    
    
    
    92.3
    
    
    
    91.5Operating margin
    
    
    3.5
    %
    
    
    7.7
    %
    
    
    8.5
    %
 (1)
    
    Includes a charge of $258 million related to impairment charges associated
with aircraft-related assets and other charges primarily associated
with aircraft-related lease and contract termination costs and employee
severance.(2)
    
    Includes a charge of $143 million for signing bonuses and other upfront
compensation
associated with a four-year labor contract with our pilots.      28




---



##### Table of Contents



Employees Under Collective Bargaining Arrangements
  Other Income and Expense and Income Taxes
    29




---



##### Table of Contents



Business Acquisitions
  Purchase PriceBusiness Acquired
    
    Rebranded
    

Date Acquired
    
    (in millions)ANC Holdings Ltd.
    
    FedEx U.K.
    
    December 16, 2006
    
    $
    241Tianjin Datian W.
Group Co.,
Ltd.
    
    N/A
    
    March 1, 2007
    
    
    427(DTW
Group)
  Outlook
     Seasonality of Business
   30




---



##### Table of Contents



Contractual Cash Obligations
  
 NEW ACCOUNTING PRONOUNCEMENTS
       31




---



##### Table of Contents



RISK FACTORS
  Our business depends on our strong reputation and the value of the FedEx brand.
 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.
  32




---



##### Table of Contents



We rely heavily on technology to operate our network, and any disruption to FedExs technology
infrastructure or the Internet could harm our operations and our reputation among customers.
 Our business may be impacted by the price and availability of fuel.
 Our business is capital intensive, and we must make capital expenditures based upon projected
volume levels.
 We face intense competition, especially during the current global recession.
  33




---



##### Table of Contents



If we do not effectively operate, integrate, leverage and grow acquired businesses, our financial
results and reputation may suffer.
 Increased security requirements could impose substantial costs on us.
 The regulatory environment for global aviation rights may impact our air operations.
 We may be affected by global climate change or by legal, regulatory or market responses to such
change.
   34




---



##### Table of Contents



We are also subject to risks and uncertainties that affect many other businesses, including:
 
    
    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, including tax, accounting, trade (such as protectionist measures enacted in
response to the current weak economic conditions), labor, environmental (such as climate
change legislation) or postal rules;
 
    
    our ability to manage our cost structure for capital expenditures and operating expenses,
and match it to shifting and future customer volume levels;
 
    
    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;
 
    
    increasing costs, the volatility of costs and legal mandates for employee benefits,
especially pension and healthcare benefits;
 
    
    significant changes in the volumes of shipments transported through our network, customer
demand for our various services or the prices we obtain for our services;
 
    
    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 and discrimination and retaliation claims, and any other legal
proceedings;
 
    
    the impact of technology developments on our operations and on demand for our services;
 
    
    adverse weather conditions or natural disasters, such as earthquakes and hurricanes, which
can disrupt electrical service, damage our property, disrupt our operations, increase fuel
costs and adversely affect shipment levels;
 
    
    widespread outbreak of an illness or any other communicable disease, or any other public
health crisis;
 
    
    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 and the
current volatility of credit markets; and
 
    
    credit losses from our customers inability or unwillingness to pay for previously provided
services as a result of, among other things, weak economic conditions and tight credit
markets.
 We are directly affected by the state of the economy.
  35




---



##### Table of Contents



FORWARD-LOOKING STATEMENTS
    36




---



##### Table of Contents



37




---



##### Table of Contents



38




---



##### Table of Contents



/s/ Ernst & Young LLP
 
  39




---



##### Table of Contents



May 31,2009
    
    
    2008ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    360
    
    
    $
    298Receivables, less allowances of $80 and $69
    
    
    1,162
    
    
    
    1,619Spare parts, supplies and fuel, less
allowances of $175 and $163
    
    
    294
    
    
    
    352Deferred income taxes
    
    
    355
    
    
    
    392Due from
parent company and other FedEx subsidiaries
    
    
    841
    
    
    
    532Prepaid expenses and other
    
    
    82
    
    
    
    112Total current assets
    
    
    3,094
    
    
    
    3,305PROPERTY AND EQUIPMENT, AT COSTAircraft and related equipment
    
    
    10,118
    
    
    
    10,165Package handling and ground support
equipment
    
    
    2,214
    
    
    
    2,106Vehicles
    
    
    1,729
    
    
    
    1,777Computer and electronic equipment
    
    
    751
    
    
    
    731Facilities and other
    
    
    3,390
    
    
    
    3,32918,202
    
    
    
    18,108Less accumulated depreciation and amortization
    
    
    9,840
    
    
    
    9,588Net property and equipment
    
    
    8,362
    
    
    
    8,520OTHER LONG-TERM ASSETSGoodwill
    
    
    903
    
    
    
    936Other assets
    
    
    947
    
    
    
    696Total other long-term assets
    
    
    1,850
    
    
    
    1,632$
    13,306
    
    
    $
    13,457
   40




---



##### Table of Contents



May 31,2009
    
    
    2008LIABILITIES AND OWNERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    153
    
    
    $
    1Accrued salaries and employee benefits
    
    
    646
    
    
    
    730Accounts payable
    
    
    835
    
    
    
    1,505Accrued expenses
    
    
    1,029
    
    
    
    954Due to parent company and other FedEx subsidiaries
    
    
    144
    
    
    
    369Total current liabilities
    
    
    2,807
    
    
    
    3,559LONG-TERM DEBT, LESS CURRENT PORTION
    
    
    667
    
    
    
    744OTHER LONG-TERM LIABILITIESDeferred income taxes
    
    
    1,185
    
    
    
    941Pension, postretirement healthcare and
other benefit obligations
    
    
    596
    
    
    
    669Self-insurance accruals
    
    
    607
    
    
    
    575Deferred lease obligations
    
    
    725
    
    
    
    606Deferred gains, principally related to
aircraft transactions
    
    
    286
    
    
    
    313Other liabilities
    
    
    114
    
    
    
    136Total other long-term liabilities
    
    
    3,513
    
    
    
    3,240COMMITMENTS AND CONTINGENCIESOWNERS EQUITYCommon stock, $0.10 par value; 1,000 shares
authorized, issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    492
    
    
    
    476Retained earnings
    
    
    5,689
    
    
    
    5,273Accumulated other comprehensive income
    
    
    138
    
    
    
    165Total owners equity
    
    
    6,319
    
    
    
    5,914$
    13,306
    
    
    $
    13,457
   41




---



##### Table of Contents



Years ended May 31,2009
    
    
    2008
    
    
    2007REVENUES
    
    $
    22,167
    
    
    $
    24,246
    
    
    $
    22,527OPERATING EXPENSES:Salaries and employee benefits
    
    
    8,031
    
    
    
    8,262
    
    
    
    8,051Purchased transportation
    
    
    1,063
    
    
    
    1,194
    
    
    
    1,097Rentals and landing fees
    
    
    1,598
    
    
    
    1,658
    
    
    
    1,598Depreciation and amortization
    
    
    952
    
    
    
    933
    
    
    
    845Fuel
    
    
    3,281
    
    
    
    3,785
    
    
    
    2,946Maintenance and repairs
    
    
    1,348
    
    
    
    1,508
    
    
    
    1,440Impairment and other charges
    
    
    258
    
    
    
    
    
    
    
    Intercompany charges
    
    
    2,093
    
    
    
    2,129
    
    
    
    2,076Other
    
    
    2,778
    
    
    
    2,920
    
    
    
    2,56121,402
    
    
    
    22,389
    
    
    
    20,614OPERATING INCOME
    
    
    765
    
    
    
    1,857
    
    
    
    1,913OTHER INCOME (EXPENSE):Interest expense
    
    
    (4
    )
    
    
    (19
    )
    
    
    (40
    )Interest income
    
    
    8
    
    
    
    171
    
    
    
    213Other, net
    
    
    (37
    )
    
    
    (163
    )
    
    
    (102
    )(33
    )
    
    
    (11
    )
    
    
    71INCOME BEFORE INCOME TAXES
    
    
    732
    
    
    
    1,846
    
    
    
    1,984PROVISION FOR INCOME TAXES
    
    
    301
    
    
    
    721
    
    
    
    733NET INCOME
    
    $
    431
    
    
    $
    1,125
    
    
    $
    1,251
   42




---



##### Table of Contents



Years ended May 31,2009
    
    
    2008
    
    
    2007OPERATING ACTIVITIESNet income
    
    $
    431
    
    
    $
    1,125
    
    
    $
    1,251Adjustments to reconcile net income
to cash provided by operating activities:Depreciation and amortization
    
    
    952
    
    
    
    933
    
    
    
    845Provision for uncollectible accounts
    
    
    116
    
    
    
    87
    
    
    
    80Deferred income taxes and other noncash items
    
    
    259
    
    
    
    237
    
    
    
    (59
    )Noncash impairment charges
    
    
    199
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Receivables
    
    
    316
    
    
    
    (175
    )
    
    
    1,446Other current assets
    
    
    (248
    )
    
    
    (188
    )
    
    
    (476
    )Accounts payable and other liabilities
    
    
    (603
    )
    
    
    226
    
    
    
    (132
    )Other, net
    
    
    (34
    )
    
    
    (60
    )
    
    
    (1
    )Cash provided by operating activities
    
    
    1,388
    
    
    
    2,185
    
    
    
    2,954INVESTING ACTIVITIESCapital expenditures
    
    
    (1,345
    )
    
    
    (1,709
    )
    
    
    (1,667
    )Proceeds from asset dispositions and other
    
    
    53
    
    
    
    28
    
    
    
    25Business acquisitions, net of cash acquired
    
    
    (3
    )
    
    
    (4
    )
    
    
    (347
    )Collection on loan to parent company
    
    
    
    
    
    
    4,225
    
    
    
    Cash (used in) provided by investing activities
    
    
    (1,295
    )
    
    
    2,540
    
    
    
    (1,989
    )FINANCING ACTIVITIESPrincipal payments on debt
    
    
    (1
    )
    
    
    (88
    )
    
    
    (147
    )Payment on loan from parent company
    
    
    (17
    )
    
    
    
    
    
    
    Net payments to parent company
    
    
    
    
    
    
    (392
    )
    
    
    (783
    )Dividend paid to parent company
    
    
    
    
    
    
    (4,225
    )
    
    
    Cash used in financing activities
    
    
    (18
    )
    
    
    (4,705
    )
    
    
    (930
    )CASH AND CASH EQUIVALENTSEffect of exchange rate changes on cash
    
    
    (13
    )
    
    
    21
    
    
    
    5Net increase in cash and cash equivalents
    
    
    62
    
    
    
    41
    
    
    
    40Cash and cash equivalents at beginning of period
    
    
    298
    
    
    
    257
    
    
    
    217Cash and cash equivalents at end of period
    
    $
    360
    
    
    $
    298
    
    
    $
    257
   43




---



##### Table of Contents



AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    TotalStock
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    

Owners EquityBalance at May 31, 2006
    
    $
    
    
    
    $
    298
    
    
    $
    7,122
    
    
    $
    12
    
    
    $
    7,432Net income
    
    
    
    
    
    
    
    
    
    
    1,251
    
    
    
    
    
    
    
    1,251Foreign currency translation adjustment,
net of tax of $6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    27Minimum pension liability adjustment,
net of tax of $3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11
    )
    
    
    (11
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,267Retirement plans liability adjustment in
connection with the adoption of SFAS
158, net of tax of $14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    20Contribution by parent company of
acquisition of ANC Holdings Ltd.
    
    
    
    
    
    
    198
    
    
    
    
    
    
    
    
    
    
    
    198Dividend to parent company associated
with the formation of FCIS
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    
    
    
    
    (12
    )Balance at May 31, 2007
    
    
    
    
    
    
    484
    
    
    
    8,373
    
    
    
    48
    
    
    
    8,905Net income
    
    
    
    
    
    
    
    
    
    
    1,125
    
    
    
    
    
    
    
    1,125Foreign currency translation adjustment,
net of tax of $13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    97Retirement plans liability adjustments,
net of tax of $6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    20Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,242Dividends to parent company
    
    
    
    
    
    
    (8
    )
    
    
    (4,225
    )
    
    
    
    
    
    
    (4,233
    )Balance at May 31, 2008
    
    
    
    
    
    
    476
    
    
    
    5,273
    
    
    
    165
    
    
    
    5,914Adjustment to opening balances for SFAS
158
measurement date transition, net of
deferred tax benefit of $8 and
deferred
tax 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 liability adjustments,
net of tax of $39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68
    
    
    
    68Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393Contribution by parent company
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    16Balance at May 31, 2009
    
    $
    
    
    
    $
    492
    
    
    $
    5,689
    
    
    $
    138
    
    
    $
    6,319
   44




---



##### Table of Contents



DESCRIPTION OF BUSINESS.
 FISCAL YEARS
 PRINCIPLES OF CONSOLIDATION
 REVENUE RECOGNITION
  ACCOUNTS RECEIVABLE ARRANGEMENT.
 CREDIT RISK
 ADVERTISING
 CASH EQUIVALENTS
  45




---



##### Table of Contents



SPARE PARTS, SUPPLIES AND FUEL
 PROPERTY AND EQUIPMENT
  Net Book Value at May 31,Range
    
    
    2009
    
    
    2008Wide-body aircraft and related equipment
    
    
    15 to 25 years
    
    
    $
    5,139
    
    
    $
    5,550Narrow-body and feeder aircraft and related equipment
    
    
    5 to 15 years
    
    
    
    709
    
    
    
    452Package handling and ground support equipment
    
    
    5 to 30 years
    
    
    
    515
    
    
    
    461Vehicles
    
    
    5 to 10 years
    
    
    
    365
    
    
    
    422Computer and electronic equipment
    
    
    3 to 10 years
    
    
    
    156
    
    
    
    163Facilities and other
    
    
    2 to 30 years
    
    
    
    1,478
    
    
    
    1,472
  CAPITALIZED INTEREST
 IMPAIRMENT OF LONG-LIVED ASSETS.
   46




---



##### Table of Contents



PENSION AND POSTRETIREMENT HEALTHCARE PLANS.
  GOODWILL.
 INTANGIBLE ASSETS.
 INCOME TAXES
   47




---



##### Table of Contents



SELF-INSURANCE ACCRUALS
 LEASES
 DEFERRED GAINS
 FOREIGN CURRENCY TRANSLATION
 EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS.
  48




---



##### Table of Contents



STOCK-BASED COMPENSATION.
  USE OF ESTIMATES
        49




---



##### Table of Contents



Purchase PriceBusiness Acquired
    
    Rebranded
    

Date Acquired
    
    (in millions)ANC Holdings Ltd.
    
    FedEx U.K.
    
    December 16, 2006
    
    $
    241Tianjin Datian W. Group Co.,
Ltd. (DTW Group)
    
    N/A
    
    March 1, 2007
    
    
    427
   FedEx U.K.
    
    
    DTW GroupCurrent assets
    
    $
    68
    
    
    $
    54Property and equipment
    
    
    20
    
    
    
    16Intangible assets
    
    
    49
    
    
    
    17Goodwill
    
    
    168
    
    
    
    348Other assets
    
    
    2
    
    
    
    10Current liabilities
    
    
    (56
    )
    
    
    (18
    )Long-term liabilities
    
    
    (10
    )
    
    
    Total purchase price
    
    $
    241
    
    
    $
    427
   50




---



##### Table of Contents



Purchase
    
    
    
    
    
    
    PurchaseAdjustments
    
    
    
    
    
    
    AdjustmentsMay 31, 2007
    
    

and Other (1)
    
    
    May 31, 2008
    
    

and Other (1)
    
    

May 31, 2009Goodwill
    
    $
    901
    
    
    $
    35
    
    
    $
    936
    
    
    $
    (33
    )
    
    $
    903
 (1)
    
    Primarily currency translation adjustments.  May 31, 2009
    
    
    May 31, 2008Gross Carrying
    
    
    Accumulated
    
    
    Net Book
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net BookAmount
    
    
    Amortization
    
    
    Value
    
    
    Amount
    
    
    Amortization
    
    
    ValueCustomer relationships
    
    $
    52
    
    
    $
    (28
    )
    
    $
    24
    
    
    $
    51
    
    
    $
    (14
    )
    
    $
    37Contract related
    
    
    73
    
    
    
    (66
    )
    
    
    7
    
    
    
    73
    
    
    
    (62
    )
    
    
    11Technology related
and other
    
    
    19
    
    
    
    (17
    )
    
    
    2
    
    
    
    19
    
    
    
    (10
    )
    
    
    9$
    144
    
    
    $
    (111
    )
    
    $
    33
    
    
    $
    143
    
    
    $
    (86
    )
    
    $
    57
  2010
    
    $
    132011
    
    
    62012
    
    
    42013
    
    
    32014
    
    
    2
   May 31,2009
    
    
    2008Accrued Salaries and Employee BenefitsSalaries
    
    $
    137
    
    
    $
    123Employee benefits, including
variable compensation
    
    
    97
    
    
    
    199Compensated absences
    
    
    412
    
    
    
    408$
    646
    
    
    $
    730Accrued ExpensesSelf-insurance accruals
    
    $
    374
    
    
    $
    360Taxes other than income taxes
    
    
    265
    
    
    
    275Other
    
    
    390
    
    
    
    319$
    1,029
    
    
    $
    954
  51




---



##### Table of Contents



May 31,2009
    
    
    2008Senior unsecured debtInterest rate of 9.65%, due in 2013
    
    $
    300
    
    
    $
    300Interest rate of 7.60%, due in 2098
    
    
    239
    
    
    
    239539
    
    
    
    539Capital lease obligations
    
    
    281
    
    
    
    206820
    
    
    
    745Less current portion
    
    
    153
    
    
    
    1$
    667
    
    
    $
    744
  2010
    
    $
    2011
    
    
    2012
    
    
    2013
    
    
    3002014
    
    
    
       52




---



##### Table of Contents



May 31,2009
    
    
    2008Aircraft
    
    $
    50
    
    
    $
    Package handling and ground support equipment
    
    
    165
    
    
    
    165Vehicles
    
    
    17
    
    
    
    20Other, principally facilities
    
    
    130
    
    
    
    133362
    
    
    
    318Less accumulated amortization
    
    
    293
    
    
    
    283$
    69
    
    
    $
    35
  For years ended May 31,2009
    
    
    2008
    
    
    2007Minimum rentals
    
    $
    1,252
    
    
    $
    1,261
    
    
    $
    1,226Contingent rentals(1)
    
    
    143
    
    
    
    182
    
    
    
    171$
    1,395
    
    
    $
    1,443
    
    
    $
    1,397
 (1)
    
    Contingent rentals are based on equipment usage.  Operating LeasesCapital
    
    
    Aircraft and Related
    
    
    Facilities and
    
    
    TotalLeases
    
    
    Equipment
    
    
    Other
    
    
    Operating Leases2010
    
    $
    162
    
    
    $
    512
    
    
    $
    598
    
    
    $
    1,1102011
    
    
    18
    
    
    
    526
    
    
    
    519
    
    
    
    1,0452012
    
    
    6
    
    
    
    504
    
    
    
    456
    
    
    
    9602013
    
    
    118
    
    
    
    499
    
    
    
    403
    
    
    
    9022014
    
    
    
    
    
    
    472
    
    
    
    350
    
    
    
    822Thereafter
    
    
    
    
    
    
    2,458
    
    
    
    3,239
    
    
    
    5,697Total
    
    $
    304
    
    
    $
    4,971
    
    
    $
    5,565
    
    
    $
    10,536Less amount representing interest
    
    
    24Present value of net minimum
lease payments
    
    $
    280
    53




---



##### Table of Contents



2009
    
    
    2008
    
    
    2007Current
provision (benefit)Domestic:Federal
    
    $
    (150
    )
    
    $
    223
    
    
    $
    493State and
local
    
    
    (17
    )
    
    
    26
    
    
    
    33Foreign
    
    
    208
    
    
    
    235
    
    
    
    16441
    
    
    
    484
    
    
    
    690Deferred
provisionDomestic:Federal
    
    
    241
    
    
    
    186
    
    
    
    5State and
local
    
    
    14
    
    
    
    20
    
    
    
    4Foreign
    
    
    5
    
    
    
    31
    
    
    
    34260
    
    
    
    237
    
    
    
    43$
    301
    
    
    $
    721
    
    
    $
    733
   2009
    
    
    2008
    
    
    2007Statutory U.S. income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Increase (decrease) resulting from:Allocation of FedEx Office
operating costs
    
    
    5.3
    
    
    
    2.5
    
    
    
    State and local income taxes, net of
federal benefit (tax)
    
    
    (0.3
    )
    
    
    1.5
    
    
    
    1.2Other, net
    
    
    1.1
    
    
    
    0.1
    
    
    
    0.7Effective tax rate
    
    
    41.1
    %
    
    
    39.1
    %
    
    
    36.9
    %
   54




---



##### Table of Contents



2009
    
    
    2008Deferred
    
    
    Deferred
    
    
    Deferred
    
    
    DeferredTax Assets
    
    
    Tax Liabilities
    
    
    Tax Assets
    
    
    Tax LiabilitiesProperty, equipment,
leases and intangibles
    
    $
    344
    
    
    $
    1,342
    
    
    $
    281
    
    
    $
    1,220Employee benefits
    
    
    306
    
    
    
    37
    
    
    
    327
    
    
    
    38Self-insurance accruals
    
    
    293
    
    
    
    
    
    
    
    275
    
    
    
    Other
    
    
    357
    
    
    
    757
    
    
    
    351
    
    
    
    538Net operating
loss/credit
carryforwards
    
    
    74
    
    
    
    
    
    
    
    89
    
    
    
    Valuation allowances
    
    
    (68
    )
    
    
    
    
    
    
    (76
    )
    
    
    $
    1,306
    
    
    $
    2,136
    
    
    $
    1,247
    
    
    $
    1,796
  2009
    
    
    2008Current deferred tax asset
    
    $
    355
    
    
    $
    392Noncurrent deferred tax liability
    
    
    (1,185
    )
    
    
    (941
    )$
    (830
    )
    
    $
    (549
    )
      55




---



##### Table of Contents



Balance at June 1, 2007
    
    $
    59Increases for tax positions taken in the current year
    
    
    10Increases for tax positions taken in prior years
    
    
    13Decreases for tax positions taken in prior years
    
    
    (8
    )Settlements
    
    
    (1
    )Balance at May 31, 2008
    
    $
    73Increases for tax positions taken in the current year
    
    $
    1Increases for tax positions taken in prior years
    
    
    5Decreases for tax positions taken in prior years
    
    
    (24
    )Settlements
    
    
    (3
    )Balance at May 31, 2009
    
    $
    52
   RETIREMENT PLANS SPONSORED BY FEDEX
    56




---



##### Table of Contents



2009
    
    
    2008
    
    
    2007Pension plans sponsored by FedEx
    
    $
    48
    
    
    $
    159
    
    
    $
    308Other U.S. domestic and international
pension plans
    
    
    36
    
    
    
    34
    
    
    
    26U.S. domestic and international defined
contribution plans
    
    
    161
    
    
    
    135
    
    
    
    104Postretirement healthcare plans
    
    
    47
    
    
    
    66
    
    
    
    46$
    292
    
    
    $
    394
    
    
    $
    484
  PENSION PLANS.
  May 31,2009
    
    
    2008Projected benefit obligation (PBO)
    
    $
    10,126
    
    
    $
    10,684Fair value of plan assets
    
    
    10,437
    
    
    
    11,497Funded status
    
    $
    311
    
    
    $
    813
  57




---



##### Table of Contents



Pension Plans2009
    
    
    2008
    
    
    2007Discount rate used to determine benefit obligation (1)
    
    
    7.68
    %
    
    
    6.96
    %
    
    
    6.01
    %Discount rate used to determine net periodic benefit cost
    
    
    7.15
    
    
    
    6.01
    
    
    
    5.91Rate of increase in future compensation levels
used to determine benefit obligation
    
    
    4.42
    
    
    
    4.51
    
    
    
    4.47Rate of increase in future compensation levels
used to determine net periodic benefit cost (2)
    
    
    4.49
    
    
    
    4.47
    
    
    
    3.46Expected long-term rate of return on assets
    
    
    8.50
    
    
    
    8.50
    
    
    
    9.10
 (1)
    
    The assumed interest rate used to discount the estimated future benefit payments
that have been accrued to date (the PBO) to their net present value.(2)
    
    Average future salary increases based on age and years of service.    DEFINED CONTRIBUTION PLANS
 FEDEX EXPRESS SPONSORED RETIREMENT PLANS
 PENSION PLANS.
  58




---



##### Table of Contents



POSTRETIREMENT HEALTHCARE PLANS
 RECENT ACCOUNTING PRONOUNCEMENT.
   59




---



##### Table of Contents



Pension Plans(1)
    
    
    Postretirement Healthcare Plans(1)2009
    
    
    2008
    
    
    2009
    
    
    2008Accumulated Benefit Obligation (ABO)
    
    $
    328
    
    
    $
    366Changes in Projected Benefit Obligation (PBO) and
Accumulated Postretirement Benefit Obligation
(APBO)PBO / APBO at the beginning of year
    
    $
    463
    
    
    $
    416
    
    
    $
    418
    
    
    $
    452Adjustments due to change in measurement dateService cost plus interest cost during gap
period
    
    
    11
    
    
    
    
    
    
    
    13
    
    
    
    Additional experience during gap period
    
    
    4
    
    
    
    
    
    
    
    (15
    )
    
    
    Changes due to gap period cash flow
    
    
    (4
    )
    
    
    
    
    
    
    (5
    )
    
    
    Service cost
    
    
    22
    
    
    
    23
    
    
    
    25
    
    
    
    28Interest cost
    
    
    21
    
    
    
    21
    
    
    
    28
    
    
    
    27Actuarial loss (gain)
    
    
    (64
    )
    
    
    2
    
    
    
    (78
    )
    
    
    (46
    )Benefits paid
    
    
    (17
    )
    
    
    (16
    )
    
    
    (41
    )
    
    
    (39
    )Settlements
    
    
    (2
    )
    
    
    (1
    )
    
    
    
    
    
    
    (23
    )Amendments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Participant contributions
    
    
    1
    
    
    
    2
    
    
    
    20
    
    
    
    19Other
    
    
    (19
    )
    
    
    16
    
    
    
    
    
    
    
    PBO / APBO at the end of year
    
    $
    416
    
    
    $
    463
    
    
    $
    365
    
    
    $
    418Change in Plan AssetsFair value of plan assets at beginning of year
    
    $
    218
    
    
    $
    207
    
    
    $
    
    
    
    $
    Adjustments due to change in measurement dateAdditional experience during gap period
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    Changes due to gap period cash flow
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    Actual return on plan assets
    
    
    (31
    )
    
    
    (6
    )
    
    
    
    
    
    
    Company contributions
    
    
    37
    
    
    
    31
    
    
    
    21
    
    
    
    63Benefits paid
    
    
    (17
    )
    
    
    (16
    )
    
    
    (41
    )
    
    
    (39
    )Other
    
    
    (6
    )
    
    
    2
    
    
    
    20
    
    
    
    (24
    )Fair value of plan assets at end of year
    
    $
    204
    
    
    $
    218
    
    
    $
    
    
    
    $
    Funded Status of the Plans
    
    $
    (212
    )
    
    $
    (245
    )
    
    $
    (365
    )
    
    $
    (418
    )Employer contributions after measurement date
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    5Net amount recognized
    
    $
    (212
    )
    
    $
    (237
    )
    
    $
    (365
    )
    
    $
    (413
    )Amount Recognized in the Balance Sheet
at May 31:Current pension, postretirement healthcare
and other benefit obligations
    
    $
    (5
    )
    
    $
    (7
    )
    
    $
    (24
    )
    
    $
    (27
    )Noncurrent pension, postretirement healthcare
and other benefit obligations
    
    
    (207
    )
    
    
    (230
    )
    
    
    (341
    )
    
    
    (386
    )Net amount recognized
    
    $
    (212
    )
    
    $
    (237
    )
    
    $
    (365
    )
    
    $
    (413
    )Amounts Recognized in AOCI and not yet reflected in
Net Periodic Benefit Cost:Net actuarial loss (gain) and other
    
    $
    69
    
    
    $
    113
    
    
    $
    (209
    )
    
    $
    (123
    )Prior service cost
    
    
    3
    
    
    
    3
    
    
    
    2
    
    
    
    3Total
    
    $
    72
    
    
    $
    116
    
    
    $
    (207
    )
    
    $
    (120
    )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
    
    
    $
    (10
    )
    
    $
    (6
    )Prior service cost
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    Total
    
    $
    4
    
    
    $
    7
    
    
    $
    (10
    )
    
    $
    (6
    )
 (1)
    
    The measurement date for 2009 is May 31, 2009, and the measurement date for 2008 is
February 29, 2008.  60




---



##### Table of Contents



PBO Exceeds the Fair Value ofPlan Assets2009
    
    
    2008Pension BenefitsFair Value of Plan Assets
    
    $
    204
    
    
    $
    218PBO
    
    
    (416
    )
    
    
    (463
    )Net funded status
    
    $
    (212
    )
    
    $
    (245
    )
 ABO Exceeds the Fair Value ofPlan Assets2009
    
    
    2008Pension BenefitsABO (1)
    
    $
    (288
    )
    
    $
    (365
    )Fair Value of Plan Assets
    
    $
    154
    
    
    $
    217PBO
    
    
    (361
    )
    
    
    (462
    )Net funded status
    
    $
    (207
    )
    
    $
    (245
    )
 (1)
    
    ABO not used in determination of funded status.   Pension Plans
    
    
    Postretirement Healthcare Plans2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Service cost
    
    $
    22
    
    
    $
    23
    
    
    $
    17
    
    
    $
    25
    
    
    $
    28
    
    
    $
    25Interest cost
    
    
    21
    
    
    
    21
    
    
    
    16
    
    
    
    28
    
    
    
    27
    
    
    
    24Expected return on plan assets
    
    
    (14
    )
    
    
    (15
    )
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial losses
(gains) and other
    
    
    7
    
    
    
    5
    
    
    
    3
    
    
    
    (6
    )
    
    
    11
    
    
    
    (3
    )Net periodic benefit cost
    
    $
    36
    
    
    $
    34
    
    
    $
    26
    
    
    $
    47
    
    
    $
    66
    
    
    $
    46
  2009
    
    
    2008Postretirement
    
    
    
    
    
    
    
    
    
    
    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
    
    $
    (19
    )
    
    $
    (13
    )
    
    $
    (91
    )
    
    $
    (59
    )
    
    $
    22
    
    
    $
    10
    
    
    $
    (52
    )
    
    $
    (36
    )Gain from settlements and curtailments
    
    
    2
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    6Amortizations:Actuarial (losses) gains and other
    
    
    (5
    )
    
    
    (3
    )
    
    
    6
    
    
    
    6
    
    
    
    (5
    )
    
    
    (3
    )
    
    
    3
    
    
    
    3Total recognized in OCI
    
    $
    (22
    )
    
    $
    (15
    )
    
    $
    (85
    )
    
    $
    (53
    )
    
    $
    17
    
    
    $
    7
    
    
    $
    (43
    )
    
    $
    (27
    )
  61




---



##### Table of Contents



Pension Plans
    
    
    Postretirement Healthcare Plans2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Discount rate used to determine benefit obligation
(1)
    
    
    5.70
    %
    
    
    5.14
    %
    
    
    5.01
    %
    
    
    7.27
    %
    
    
    6.81
    %
    
    
    6.08
    %Discount rate used to determine net periodic benefit cost
    
    
    5.16
    
    
    
    5.01
    
    
    
    4.86
    
    
    
    7.13
    
    
    
    6.08
    
    
    
    6.08Rate of increase in future compensation levels
used to determine benefit obligation
    
    
    3.86
    
    
    
    4.55
    
    
    
    4.28
    
    
    
    
    
    
    
    
    
    
    
    Rate of increase in future compensation levels
used to determine net periodic benefit cost (2)
    
    
    4.59
    
    
    
    4.28
    
    
    
    3.47
    
    
    
    
    
    
    
    
    
    
    
    Expected long-term rate of return on assets (3)
    
    
    7.16
    
    
    
    6.73
    
    
    
    5.83
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    The assumed interest rate used to discount the estimated future benefit payments
that have been accrued to date (the PBO) to their net present value.(2)
    
    Average future salary increases based on age and years of service.(3)
    
    The expected future long-term rate of earnings on plan assets.  PostretirementPension Plans
    
    
    Healthcare Plans2010
    
    $
    14
    
    
    $
    242011
    
    
    16
    
    
    
    252012
    
    
    16
    
    
    
    262013
    
    
    18
    
    
    
    272014
    
    
    18
    
    
    
    272015-2019
    
    
    113
    
    
    
    158
      62




---



##### Table of Contents



2009
    
    
    2008
    
    
    2007REVENUE BY SERVICE TYPEPackage:U.S. overnight box
    
    $
    6,074
    
    
    $
    6,578
    
    
    $
    6,485U.S. overnight envelope
    
    
    1,855
    
    
    
    2,012
    
    
    
    1,990U.S. deferred
    
    
    2,789
    
    
    
    2,995
    
    
    
    2,883Total domestic package revenue
    
    
    10,718
    
    
    
    11,585
    
    
    
    11,358International Priority (IP)
    
    
    6,978
    
    
    
    7,666
    
    
    
    6,722International domestic (1)
    
    
    565
    
    
    
    663
    
    
    
    370Total package revenue
    
    
    18,261
    
    
    
    19,914
    
    
    
    18,450Freight:U.S.
    
    
    2,165
    
    
    
    2,398
    
    
    
    2,412International priority freight
    
    
    1,104
    
    
    
    1,243
    
    
    
    1,045International airfreight
    
    
    369
    
    
    
    406
    
    
    
    394Total freight revenue
    
    
    3,638
    
    
    
    4,047
    
    
    
    3,851Other
    
    
    268
    
    
    
    285
    
    
    
    226$
    22,167
    
    
    $
    24,246
    
    
    $
    22,527GEOGRAPHICAL
INFORMATION
(2)Revenues:U.S.
    
    $
    12,903
    
    
    $
    14,009
    
    
    $
    13,790International
    
    
    9,264
    
    
    
    10,237
    
    
    
    8,737$
    22,167
    
    
    $
    24,246
    
    
    $
    22,527Noncurrent assets:U.S.
    
    $
    6,702
    
    
    $
    6,764
    
    
    $
    10,003International
    
    
    3,510
    
    
    
    3,388
    
    
    
    3,113$
    10,212
    
    
    $
    10,152
    
    
    $
    13,116
 (1)
    
    International domestic revenues include our international domestic operations,
primarily in the United Kingdom, Canada, China and India. We reclassified the prior period
international domestic revenues previously included within other revenues to conform to the
current period presentation.(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. Flight equipment is allocated between geographic areas
based on usage.  63




---



##### Table of Contents



2009
    
    
    2008
    
    
    2007Interest (net of capitalized interest)
    
    $
    5
    
    
    $
    19
    
    
    $
    41Income taxes (primarily paid to parent)
    
    
    108
    
    
    
    450
    
    
    
    708
      64




---



##### Table of Contents



Aircraft-Aircraft (1)
    
    
    Related (2)
    
    
    Other (3)
    
    
    Total2010
    
    $
    710
    
    
    $
    254
    
    
    $
    19
    
    
    $
    9832011
    
    
    765
    
    
    
    26
    
    
    
    11
    
    
    
    8022012
    
    
    527
    
    
    
    
    
    
    
    10
    
    
    
    5372013
    
    
    425
    
    
    
    
    
    
    
    8
    
    
    
    4332014
    
    
    466
    
    
    
    
    
    
    
    8
    
    
    
    474Thereafter
    
    
    1,924
    
    
    
    
    
    
    
    90
    
    
    
    2,014
 (1)
    
    Our obligation to purchase 15 of these aircraft (B777Fs) is conditioned upon there
being no event that causes us or our employees not to be covered by the Railway Labor Act of 1926, as amended.(2)
    
    Primarily aircraft modifications.(3)
    
    Primarily advertising and promotion contracts.     65




---



##### Table of Contents



B757
    
    
    B777F
    
    
    MD11
    
    
    Total2010
    
    
    12
    
    
    
    4
    
    
    
    2
    
    
    
    182011
    
    
    16
    
    
    
    4
    
    
    
    
    
    
    
    202012
    
    
    8
    
    
    
    3
    
    
    
    
    
    
    
    112013
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    32014
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Thereafter
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    13Total
    
    
    36
    
    
    
    30
    
    
    
    2
    
    
    
    68
  Wage-and-Hour.
 Bibo v. FedEx Express Foster Foster
  Other.
      66




---



##### Table of Contents



First
    
    
    Second
    
    
    Third
    
    
    Fourth(in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter2009 (1)Revenues
    
    $
    6,360
    
    
    $
    6,040
    
    
    $
    5,010
    
    
    $
    4,757Operating income
    
    
    334
    
    
    
    527
    
    
    
    45
    
    
    
    (141
    )Net income
    
    
    197
    
    
    
    327
    
    
    
    (1
    )
    
    
    (92
    )2008Revenues
    
    $
    5,851
    
    
    $
    5,993
    
    
    $
    6,090
    
    
    $
    6,312Operating income
    
    
    509
    
    
    
    516
    
    
    
    417
    
    
    
    415Net income
    
    
    310
    
    
    
    306
    
    
    
    249
    
    
    
    260
 (1)
    
    Operating expenses for the fourth quarter of 2009 include a
charge of $258 million
primarily related to aircraft-related asset impairments.  67




---



##### Table of Contents



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 INTEREST RATES.
 FOREIGN CURRENCY.
  COMMODITY.
  OTHER.
  68




---



##### Table of Contents



69




---



##### Table of Contents



ADDITIONSBALANCE
    
    
    CHARGED

    
    
    CHARGED
    
    
    
    
    
    
    BALANCEAT
    
    
    TO
    
    
    TO
    
    
    
    
    
    
    ATBEGINNING
    
    
    COSTS AND
    
    
    OTHER
    
    
    
    
    
    
    END OFDESCRIPTION
    
    OF YEAR
    
    
    EXPENSES
    
    
    ACCOUNTS
    
    
    DEDUCTIONS
    
    
    YEARAccounts Receivable Reserves:Allowance for Doubtful Accounts2009
    
    $
    27
    
    
    $
    116
    
    
    $
    
    
    
    $
    100
    (a)
    
    $
    432008
    
    
    27
    
    
    
    87
    
    
    
    
    
    
    
    87
    (a)
    
    
    272007
    
    
    52
    
    
    
    80
    
    
    
    
    
    
    
    105
    (a)
    
    
    27Allowance for Revenue Adjustments2009
    
    $
    42
    
    
    $
    
    
    
    $
    311
    (b)
    
    $
    316
    (c)
    
    $
    372008
    
    
    34
    
    
    
    
    
    
    
    345
    (b)
    
    
    337
    (c)
    
    
    422007
    
    
    53
    
    
    
    
    
    
    
    320
    (b)
    
    
    339
    (c)
    
    
    34Inventory Valuation Allowance:2009
    
    $
    163
    
    
    $
    15
    
    
    $
    
    
    
    $
    3
    
    
    $
    1752008
    
    
    156
    
    
    
    10
    
    
    
    
    
    
    
    3
    
    
    
    1632007
    
    
    150
    
    
    
    9
    
    
    
    
    
    
    
    3
    
    
    
    156
 (a)
    
    Uncollectible accounts written off, net of recoveries.(b)
    
    Principally charged against revenue.(c)
    
    Service failures, rebills and other.  70




---



##### Table of Contents



Years Ended May 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Earnings:Income before income taxes
    
    $
    732
    
    
    $
    1,846
    
    
    $
    1,984
    
    
    $
    1,734
    
    
    $
    1,305Add back:Interest expense, net of capitalized interest
    
    
    4
    
    
    
    19
    
    
    
    40
    
    
    
    54
    
    
    
    73Amortization of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Portion of rent expense representative
of interest factor
    
    
    576
    
    
    
    587
    
    
    
    580
    
    
    
    630
    
    
    
    600Earnings as adjusted
    
    $
    1,312
    
    
    $
    2,452
    
    
    $
    2,604
    
    
    $
    2,418
    
    
    $
    1,978Fixed Charges:Interest expense, net of capitalized
interest
    
    $
    4
    
    
    $
    19
    
    
    $
    40
    
    
    $
    54
    
    
    $
    73Capitalized interest
    
    
    58
    
    
    
    46
    
    
    
    32
    
    
    
    27
    
    
    
    13Amortization of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Portion of rent expense representative
of interest factor
    
    
    576
    
    
    
    587
    
    
    
    580
    
    
    
    630
    
    
    
    600$
    638
    
    
    $
    652
    
    
    $
    652
    
    
    $
    711
    
    
    $
    686Ratio of Earnings to Fixed Charges
    
    
    2.1
    
    
    
    3.8
    
    
    
    4.0
    
    
    
    3.4
    
    
    
    2.9
  71




---



##### 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
    
    
    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.)10.3
    
    
    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.)10.4
    
    
    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.)10.5
    
    
    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.)10.6
    
    
    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.)10.7
    
    
    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.)10.8
    
    
    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.)10.9
    
    
    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.)
  E-1




---



##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.10
    
    
    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.)10.11
    
    
    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.)Aircraft-Related Agreement10.12
    
    
    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.)10.13
    
    
    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.)10.14
    
    
    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.)10.15
    
    
    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.)10.16
    
    
    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.)10.17
    
    
    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.)U.S. Postal Service Agreement10.18
    
    
    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.)
  E-2




---



##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.19
    
    
    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.)10.20
    
    
    Letter Agreement dated March 8, 2007 and Letter Agreement dated
May 14, 2007, each amending the Transportation Agreement dated
July 31, 2006, as amended, 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.)10.21
    
    
    Amendment dated June 20, 2007 and Amendment dated July 31, 2007,
each amending the Transportation Agreement dated July 31, 2006, as
amended, 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.)10.22
    
    
    Amendment dated December 4, 2007 to the Transportation Agreement
dated July 31, 2006, as amended, 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.)10.23
    
    
    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.)10.24
    
    
    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.)Financing Agreement10.25
    
    
    Five-Year Credit Agreement dated as of July 20, 2005 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 July 20, 2005, 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.
  E-3




---



##### Table of Contents



ExhibitNumber
    
    Description of ExhibitOther Exhibits*12
    
    
    Statement re Computation of Ratio of Earnings to Fixed Charges (presented
on page 71 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-4